Blackstone Inc. is the frontrunner to win a roughly $17 billion portfolio of commercial-property loans from the Federal Deposit Insurance Corp.’s sale of Signature Bank debt, according to people familiar with the matter.

Regulators seized the failed bank in March and have been marketing loans backed by retail, industrial, office and apartment buildings. FDIC officials are now in final discussions to declare Blackstone’s bid as bringing the lowest costs to the agency, some of the people said.

Such deals can be complex. While bank regulators are still hammering out the final nuances of the arrangement, the exact terms are in flux. As with all transactions that aren’t finalized, it’s possible another bidder triumphs or that the loan pool is divvied up among suitors.

A Blackstone spokesperson didn’t immediately reply to a request for comment.

The FDIC has sought to offload roughly $33 billion of Signature’s real estate loans after the bank collapsed earlier this year. Signature had been a big lender to apartment landlords in New York City, with a portion of loans backing buildings that have rent-stabilized or rent-controlled units. Those rent-stabilized apartments aren’t part of the Blackstone deal.

Commercial real estate owners have come under pressure from a rise in borrowing costs that’s pushing down property values and stifling transactions. With the market largely frozen, investors have been watching the Signature sale closely in an attempt to get a better indication of pricing.

The bidding process had lured finance companies including Starwood Capital Group and Brookfield Asset Management Ltd. While it’s unclear exactly how many bidders sought out each portfolio, many companies had planned to team up with other firms for offers.

A team from Newmark Group Inc. led by Doug Harmon and Adam Spies are working with the FDIC on the sale. A representative for the brokerage declined to comment.

--With assistance from Patrick Clark and Katanga Johnson.

Author: Natalie Wong, Gillian Tan and Dawn Lim