Chemical Banking Corp. last week said it sold a $341 million portfolio of commercial mortgage loans and other real estate assets for more than 60% of face value to Morgan Stanley Real Estate Fund L.P. and Lennar Florida Partners.
The sale was somewhat unusual for Chemical, which has followed the strategy of disposing of problem real estate one asset at a time on the theory that the return to the bank is greater that way.
"This transaction allows Chemical to take advantage of recent increases in prices paid for distressed real estate assets while at the same time alleviating the administrative burden of working out these assets," said Jacqueline R. Slater, the managing director in the bank's real estate finance group who was responsible for the transaction.
The portfolio included about 80 small- to medium-sized real estate assets. About 86% of the assets were nonperforming loans.
Joseph A. DeLuca, head of the real sate finance group, said the deal "continues the balanced, costeffective approach Chemical has taken in cleaning up its real estate portfolio, with the result that our nonperforming real estate assets, which peaked at $3.08 billion in September 1992, will be down almost 65%."
Chemical acted as its own adviser in the transaction.