Chase Manhattan Corp.'s new real estate asset management unit recently closed its first deal.

The Harvest Opportunity Fund of Chase Realty Asset Management on Friday bought 70 real estate assets, mostly loans but also some foreclosed properties, from its parent company for $285 million.

The assets date from the 1980s lending boom in the Northeast and were financed by Chase Manhattan and two predecessor institutions, Chemical Banking Corp. and Manufacturers Hanover Corp.

All three banking companies were active in real estate in the 1980s and were burned when the market crashed.

Most of the loans bought by the Harvest fund are now performing, said Hugh Balloch, a managing director in Chase's real estate investment banking group.

But they "weren't a strategic fit for (the bank's) current portfolio. We wanted to find a way to liquefy them in a creative manner."

The Harvest purchase was financed by a $209 million loan from Credit Suisse First Boston and $76 million of equity from several investors, including Chase Capital Partners, the banking company's venture capital subsidiary.

Chase "made a direct investment in the fund and retained some of the upside potential in the assets," Mr. Balloch said.

Harvest, a closed-end fund, may also buy lower-rated pieces of future Chase commercial mortgage securitizations, sources said. Mr. Balloch declined to comment.

Launched last week, Chase Realty Asset Management has seven full-time staff members and is run by John C. Collins, a veteran of Chase's and Chemical's real estate operations.

"There's still a lot of opportunity to add value on real estate assets," Mr. Balloch said.

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