Vornado Realty Trust submitted a bid to buy CW Financial Services, the parent of the second-largest manager of delinquent U.S. commercial real estate loans, a person with direct knowledge of the offer said.
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 hasn’t been made public.
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. It has access to valuable pricing and payment information, said Ben Thypin, an analyst at researcher Real Capital Analytics Inc. in New York.
“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.”
Roanne Kulakoff, a spokeswoman for New York-based Vornado, declined to comment. Representatives for CW Financial and Beekman Advisors in McLean, Virginia, which is running the auction, didn’t respond to requests for comment.
Caisse de Depot
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. An “announcement” on CW is being planned for the end of the month, he said.
Vornado is the third-largest U.S. real estate investment trust by market value. It is among the biggest owners of office buildings in New York and Washington, and it also owns retail properties nationwide. Its properties include 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 and cash equivalents at the end of the first quarter, according to its most recent quarterly filing with the Securities and Exchange Commission.