Atlantic Union sold $2B of CRE loans to Blackstone after Sandy Spring merger
The Virginia bank closed the sale of about $2 billion of performing CRE loans at low-90s percent of par to cut concentration after its 2025 merger.
What was changed
On June 26, 2025, Atlantic Union Bank announced it had closed the sale of roughly $2 billion in performing commercial real estate loans to Blackstone Real Estate Debt Strategies, the arm of an alternative asset manager with nearly $76 billion of investor capital. The loans, primarily covering the Washington, D.C. metro area, came with Atlantic Union's April 2025 merger with Sandy Spring Bancorp. The bank retained customer-facing servicing responsibilities and sold the portfolio at a percentage of par value in the low-90s.
CEO John Asbury framed the sale as integration discipline: 'After closing our acquisition of Sandy Spring, we have been focused on integration and execution. The loan sale transaction reduces our CRE concentration and frees up capacity for potential future growth.' Raymond James and Piper Sandler analysts called the transaction 'positive,' writing that the freed-up liquidity should support loan growth, securities purchases and reduced wholesale funding, with net interest margin likely to expand.
The sale fits a wider retreat of banks from CRE concentration: souring CRE loans drove New York Community Bank's surprise $252 million loss that nearly felled it in January 2024, contributed to the terminated HomeStreet-FirstSun merger, and pushed HomeStreet to sell $990 million of multifamily loans to Bank of America. Blackstone, for its part, has snapped up $20 billion of CRE loan portfolios over the past two years.
Why it worked
The Sandy Spring merger added a concentrated Washington-area CRE book the bank chose not to hold through a soft CRE cycle.
The risks of CRE concentration were fresh: NYCB's $252 million loss and the collapsed HomeStreet-FirstSun merger were the cautionary tales.
Selling at low-90s percent of par traded a small discount for lower concentration, freed liquidity and lending capacity.
Retaining servicing kept the customer relationships while the credit risk moved to Blackstone.
What can be applied
De-risking after an acquisition is part of the deal: selling the target's concentrated book at a small discount buys balance-sheet room.
Aftermath
Analysts expected 'a significant improvement in financial performance over the next 12 months' as the loan pipeline built and core NIM expanded with asset quality remaining strong. Blackstone continued adding bank CRE portfolios, having bought $20 billion of them over the prior two years.