In order to help the regional lender reduce its exposure to the struggling industry, Washington Federal Bank agreed on Friday to sell a portfolio of commercial multi-family real estate loans to Bank of America for roughly $2.9 billion.
Due to rising borrowing costs and declining occupancy, the commercial real estate market has become a major source of investor anxiety and has put regional lenders under intense regulatory scrutiny.
Laptops 1000The parent firm WaFd revealed in a regulatory filing that the portfolio of 2,000 commercial multi-family real estate loans had a $3.2 billion total outstanding principal balance.
Following the closing of the acquisition, BofA intends to engage in a structured transaction or loan sale with one or more Pacific Investment Management funds, according to WaFd.
WaFd stock was slightly higher in Friday morning trade. This year, the stock has lost about 9% of its value.
