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CHICAGO — The Federal Deposit Insurance Corp. (FDIC) has reached an agreement to sell an equity interest in the real estate assets formerly controlled by Chicago-based Corus Bank to a group of buyers that includes Starwood Capital Group, TPG Capital, Perry Capital and WLR LeFrak. The group will purchase a stake in Corus Construction Ventures LLC, which was created by the FDIC to hold a $4.5 billion portfolio formerly controlled by Corus.

The portfolio includes the loans for or ownership of 102 real estate properties located in a number of markets, including Atlanta, Chicago, Los Angeles, Miami, New York and Washington, D.C. The portfolio comprises 79 residential condominium buildings, 14 multifamily buildings, eight office buildings and one land development project. The portfolio also contains performing and non-performing loans.

Under the terms of the agreement, which is valued at $2.77 billion, the FDIC will own a 60 percent interest in the limited liability company and will provide financing with a 0 percent coupon for 50 percent of the purchase price to the limited liability company. The FDIC will also extend up to a $1 billion facility for working capital and to fund the completion of projects that are still under construction. Starwood and TPG will provide a majority of the new equity capital from the investor group, with Perry and WLR LeFrak contributing the remainder. Starwood will also oversee day-to-day management of the portfolio. The investors will form a new company to handle the portfolio, and it will contain a five-member board of directors, with Starwood nominating two members, TPG nominating two members and Perry nominating one member.

The FDIC seized the assets of Corus Bank on September 11. According to a story that first appeared in the Wall Street Journal, the bank invested heavily in the condominium construction market in South Florida and other now-struggling housing markets. The story goes on to say that more than half of the bank's loans were in nonaccrual or foreclosure in April 2009. Before selling the bank's portfolio, its 11 branches and more than $6 billion in deposits were assumed by MB Financial.

— Coleman Wood

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