Sunflower Bank has offloaded roughly $890 million in performing multifamily loans to Brookfield Asset Management, marking a major step in unwinding a large portfolio inherited through its parent company's merger with First Foundation Bank.
The deal underscores how banks that bulked up on multifamily lending are now actively reducing exposure, even as demand for stabilized apartment debt remains strong among institutional buyers. It also highlights the scale of restructuring tied to FirstSun Capital Bancorp's merger with Irvine, California-based lender First Foundation, which has been reshaping its balance sheet since announcing the deal in October.
The $890 million transaction represents one of the largest individual sales tied to that effort, part of a broader strategy FirstSun launched alongside the acquisition to reduce First Foundation's multifamily loan holdings.
Prior to the merger announcement, First Foundation disclosed the reclassification of $1.9 billion of its multifamily portfolio to loans held for sale.
The multifamily concentration was at the heart of First Foundation's challenges. At the end of March, just before the merger's closing, First Foundation carried roughly $3.46 billion in multifamily loans, making it the 35th-largest multifamily loan portfolio in the nation, according to Federal Deposit Insurance Corp. data. Properties in Southern California and the Southwest backed the bulk of the portfolio.
By contrast, Dallas-based Sunflower held just $228 million in multifamily loans and was ranked 323rd.
The sale to Brookfield was contemplated and announced as part of the First Foundation merger. But the repositioning work began well before that date. First Foundation had already reduced loan balances by about $1 billion, or 44%, prior to the deal's closing, according to FirstSun Chief Financial Officer Rob Cafera's remarks on the company's first-quarter earnings call.
FirstSun expects to complete the remaining roughly $1.3 billion in total loan downsizing before the end of this quarter. But the repositioning won't stop there. Even after the targeted downsizing is complete, the company plans to continue remixing the acquired multifamily portfolio as loans hit their scheduled maturity dates — about $310 million over the remainder of 2026 and another $400 million in 2027.
"Our focus here will be on keeping true relationships rather than where it is simply a credit-only situation," Cafera said on the call.
The bank intends to use the proceeds from the multifamily loan sale to pay down high-cost brokered and non-brokered deposits acquired from First Foundation.
The bank also expects to bring its investor commercial real estate concentration level below 250% of capital by the end of the second quarter, a sharp reduction from the levels inherited from First Foundation.
Brookfield framed the purchase as part of a broader push to deploy capital into high-quality real estate credit while helping partners manage their balance sheets. The sale "highlights the scale and capabilities of Brookfield's credit franchise, which has grown to more than $365 billion," Bill Powell, managing partner in Brookfield's credit group, said in a statement.