Vornado Realty Trust submitted a bid to buy CW Financial Services, the parent of the second-largest manager of delinquent commercial real estate loans, according to a person with knowledge of the offer.

A winner for New York-based CW Financial may be selected in the next week, said the person, who asked not to be named because the bidding has not been made public. Buyout firms Apollo Global Management LP and Centerbridge Capital Partners LLC, which had made competing offers, are no longer seeking to buy the company, according to two people familiar with the auction.

CWCapital Asset Management, a unit of CW Financial, is the special servicer of $144 billion of securitized real estate loans, including more than $18 billion that are delinquent, according to data compiled by Bloomberg.

Ben Thypin, an analyst at Real Capital Analytics Inc. in New York, said CWCapital has access to valuable pricing and payment information.

"Owning a firm like CW gives access to information on a lot of troubled loans as well as an established platform for originating new ones," Thypin said. "That puts the owner in the driver's seat and in control of distressed real estate that they may want for themselves."

Vornado, the third-largest U.S. real estate investment trust by market value, is one of the largest owners of office buildings in New York and Washington including New York's 1 and 2 Penn Plaza, Chicago's Merchandise Mart, and the Crystal City complex in Northern Virginia.

The company had $789 million of cash at the end of the first quarter, according to its most recent quarterly filing with the Securities and Exchange Commission.

"This would be a very strategic move by Vornado," said Mohsin Meghji, a principal at New York-based restructuring firm Loughlin Meghji & Co. and chief restructuring officer of Capmark Financial Group Inc. "The competitive landscape for special servicing is being reset, and CW is one of the last large platforms available."

Roanne Kulakoff, a spokeswoman for New York-based Vornado, declined to comment. Representatives for CW Financial and Beekman Advisors in McLean, Va., which is running the auction, didn't respond to requests for comment.

CW Financial is majority owned by a unit of Montreal-based Caisse de Depot et Placement du Quebec, Canada's largest pension fund manager.

Francois Gaboury, spokesman for the Caisse's Otera Capital subsidiary, declined to comment on Vornado or other potential bidders.

When commercial mortgages are packaged into securities, a special servicer is assigned to manage the assets and help direct a restructuring if the borrowers default.

LNR Partners Inc., of Miami Beach, Fla., the largest special servicer, has been assigned about $181 billion of securitized debt, including almost $24 billion of delinquent assets, according to Bloomberg data.

LNR Property Corp., the unit's parent owned by Cerberus Capital Management LP, hired Lazard Ltd. to help restructure as much as $1 billion of debt, people familiar with the matter said on Jan. 14.

A restructuring of LNR could result in Vornado owning a stake in the company because it holds some of the debt, The Wall Street Journal reported this month.

CWCapital would be the third special servicer to change hands since December.

Berkadia Commercial Mortgage LLC bought Capmark Financial's loan-servicing and mortgage-lending business for $468 million in December. Island Capital Group LLC, the New York-based firm run by the real estate investor Andrew Farkas, agreed in March to buy the special-servicing and debt-fund unit of Centerline Holding Co. for about $50 million in cash and $60 million in assumed debt.

CWCapital's largest troubled loan is $3 billion of debt on Stuyvesant Town-Peter Cooper Village, according to data compiled by Bloomberg. Manhattan's biggest apartment complex, which is facing foreclosure, was purchased for $5.4 billion by Tishman Speyer Properties LP and BlackRock Inc. near the top of the market in 2006.

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