NEW YORK CITY-JPMorgan Chase said Tuesday that it has purchased a $3.5-billion portfolio of performing multifamily and commercial real estate loans from Citibank. Terms of the deal, which focuses on properties in California, Illinois and New York, were not disclosed.

About 3,800 loans are included in the portfolio, the two companies said in a joint statement. For Chase, the acquisition is a “strategic addition” to its Commercial Term Lending business, which specializes in loans for moderately priced apartment buildings in stable markets.

For Citi, the deal means clearing $3.5 billion worth of non-core assets off its books. The non-core business, known as Citi Holdings, currently represents less than 25% of Citi’s balance sheet. The banking giant says it will continue to pursue “divestiture opportunities.”

Last month, Citi announced it would transfer the management and certain proprietary interests in its fund of funds, mezzanine funds, feeder funds and co-investment businesses to StepStone Group LLC and Lexington Partners. In June, it sold its Canadian MasterCard business to the Canadian Imperial Bank of Commerce, a move that was expected to reduce Citi Holdings’ assets by C$2 billion.

Al Brooks, head of the Commercial Term Lending unit, says in a statement that the loan portfolio “adds strong earning assets in markets we currently serve and valuable relationships that will provide new origination opportunities.” He adds that it mirrors CTL’s focus on “excellent borrowers in stable markets.” About 80% of CTL’s existing $36-billion portfolio is multifamily loans; the business was part of Chase’s late-2008 purchase of the bankrupt Washington Mutual.

The loan-portfolio deal is expected to close immediately and will be reflected in Chase’s third-quarter financial results.