If an owner of the bank creates a separate company (he is 1 of several partners in the new company) that buys OREO property from the bank (most will have been on the books for 5+ years), is there any Reg W concerns. (I know it would need to be at market value)
What I have read looks like the issues would/ could be if the bank was buying it from the affiliate, not the affiliate buying it from the bank.

Regardless of any regulations, I would be sitting down with my primary regulator ahead of time and discussing these proposed transactions well in advance of execution. Any such transaction has some pretty bad connotations.

They've discussed it with the regulators and only thing they said was to make sure that we comply with Reg W

Then I suggest that your legal counsel that is drafting the purchase contract to also make sure and opine that the transaction meets the 23B requirements.