Christmas came a month late this year for Colony Capital LLC, but nobody there is complaining.

Colony, a private international investment firm, bought $1 Billion in commercial real estate loans from the FDIC for 44 cents on the dollar.

According to a CoStar Group report:

The transaction included 1,200 loans with an aggregate unpaid principal balance of $1.02 billion, consisting of substantially all senior secured commercial real estate loans. Approximately, 70% of the loans were delinquent and about 75% of the collateral of the portfolio is in Georgia, California, Nevada and Florida. About one-third of the total was reportedly backed by land and not buildings. All of the loans were from 22 banks that have failed during the past 18 months.

The portfolio was effectively acquired at 44% of the unpaid principal balance of the loans, with a purchase price by the Colony Investors of $90.5 million (exclusive of working capital and transaction costs) for its 40% equity interest. The company’s pro rata share of the Colony Investors’ interest is between 24.9% and one-third, or $22.5 million to $30.2 million. The financing of the transaction includes $233 million of notes provided by the FDIC.

According to, $300 Billion in commercial loans come due in 2010. $500 Billion in 2011. $1.8 Trillion in 2012.

Where is the needed new financing?

Nowhere in sight, yet.

And you thought the Sub-Prime meltdown was bad?

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