Monthly Archives: October 2019

Berkadia Arranges $47 Million Sale of Apartment Community in Broward County, Florida

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Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has arranged the sale of 72 West, a 291-unit, Class B multifamily community located in Tamarac, Florida.

Managing Directors Roberto Pesant and Jaret Turkell of Berkadia’s Miami office, and Director Yoav Yuhjtman of Berkadia’s Boca Raton office, arranged the sale on behalf a New York-based investment group.

A Canadian investment group acquired the property for $47 million.

“The seller bought this property as a fractured condo (222 out of 291 units) in 2016 for $22 million, and has since fully executed its strategy to buy back the privately owned units, collapse the HOA, and stabilize and rebrand the property as 72 West,” said Yuhjtman. “With occupancy at 95.5 percent in this submarket and no new deliveries in the immediate area this year, the new owner has an opportunity to capture some upside from growing demand for high-quality apartment rentals in western Broward County.”

Located at 8650 NW 61st Street in Tamarac, 72 West was built in 1987 and consists of one- and two-bedroom apartments ranging from 756 to 899 square feet. The asset is comprised of nine buildings; six are three-story, garden-style elevator served buildings and three are single-story villas with semi-private entrances and patios. Amenities include two clubhouses with pools.

72 West is ideally located within five minutes of the Sawgrass Expressway and 10 minutes from Florida’s Turnpike, and feeds into the highly rated Coral Springs public school system. The property is close to Sawgrass Mills Mall and the BB&T Center, and just a 30-minute drive to the Boca Raton and Plantation employment markets.

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation (now known as Jefferies Financial Group), Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA.

The company is among the top Freddie Mac and Fannie Mae multifamily lenders.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD Pure Electric Buses Rule Chile

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New energy company BYD now has 183 zero-emission buses in service in Chile.

The fleet of BYD K9’s is over half of the 285 zero-emission BYD buses Chile has purchased since 2017.

The positive environmental effect is equivalent to taking some 7,695 cars off the road, eliminating 481,650 tons of CO₂ and 2,850 tons of NOₓ emissions.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Hathaway Specialty Insurance Expands in France

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Berkshire Hathaway Specialty Insurance has commenced underwriting casualty and construction insurance in France and filled two key in-country leadership posts, naming Olivier Antiphon as Head of Construction and Anne-Sophie Bonifay as Head of Casualty.

“We are pleased to continue to round out our capabilities in France as we welcome Olivier and Anne-Sophie to lead our entry into the local construction and casualty markets,” said François-Xavier d’Huart, Country Manager, France, BHSI. “Their expertise, coupled with BHSI’s financial strength and commitment to claims handling excellence, will serve our customers and brokers well for years to come.”

Olivier comes to his role with three decades of experience in construction underwriting and engineering. For the past 12 years he was Construction & Engineering Underwriting Manager at XL Insurance Company SE in Paris. Prior to that, he was Engineering Underwriting Manager at Gerling in Paris. He began his career as Head of the Firefighting Engineering Team at Alstom Power. He has a degree in Health & Security from the Institut Universitaire de Technologie in Saint-Denis.

Anne-Sophie joins BHSI with 25 years of experience spanning both middle market and large account casualty underwriting. She began her career in casualty underwriting at AGF (Allianz), and then Commercial Union, in Paris. She then held increasingly senior positions in casualty underwriting at Chubb Insurance Company of Europe, and was Casualty Underwriting Manager, Large Corporate Accounts, at Zurich Global Corporate France. She served as Casualty Underwriting Manager, Middle Market, at XL Insurance Company Limited, and most recently was Casualty Underwriting Manager, Middle Market, at AXA XL in Paris. She holds a master’s degree in Insurance Law from the University of Paris Panthéon Assas.

Olivier and Anne-Sophie are based in BHSI’s office in Paris.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Dairy Queen Targets Columbia, South Carolina for Expansion

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As part of a nationwide franchising initiative, American Dairy Queen is focused on expanding its regional footprint in Columbia, South Carolina.

The franchisor is looking for qualified, multi-unit capable franchisees who “have the ambition and skillset to succeed with a timeless company.”

Taking a proactive development approach, the brand has outlined immediate franchise opportunities with potential DQ Grill & Chill trade areas already identified.

“The Dairy Queen brand has been bringing joy to people worldwide for many years. Its reputation and staying power are what attracts dedicated franchise ownership groups and encourages them to add the DQ brand to their portfolios,” said Julie Davis, Director of Franchise Sales and Development U.S. “With immediate opportunities available, strong multi-unit operators have the chance to grow with a classic brand while being among the first to introduce DQ Grill & Chill® to the Columbia community.”

Maintaining its recipe for success throughout more than 75 years, the DQ system currently has more than 7,000 locations worldwide and is expanding nationwide with a focus on 10 additional growth markets in: Sacramento, Calif.; Baltimore, Md.; Orlando, Fla.; Milwaukee, Wis.; Tulsa, Okla.; Memphis, Tenn.; Albany, N.Y.; Fresno, Calif.; Charlotte, N.C.; and New Orleans, La.

After perfecting the DQ Grill & Chill design prototype and adding new executives to its franchise development leadership team, ADQ is launching incentive programs to attract motivated multi-unit operators who are eager to grow with a timeless brand and execute through the development process at an advanced pace. These programs include a timeline, multi-unit opening, year on year and a re-purpose incentive.

“We launched these incentives for elite franchisees with a fast-track mindset and our team is eager and ready to support them,” added Davis. “The Dairy Queen brand’s existing customer base in Columbia has been lucky enough to experience the sweet treats we have to offer. Now, we’re ready for them to be able to enjoy a full dining experience with made-to-order lunch and dinner options.”

The industry leading DQ Grill & Chill business model, includes site selection intelligence, seasoned business consultants and ongoing marketing support. It is designed to attract individuals and operating teams with a strong business acumen, proven ownership experience, an interest in multi-unit franchising and a net worth of at least $1,000,000.

DQ Grill & Chill® restaurants offer a full line of fresh, high-quality food and frozen treats to delight fans of all ages. Moving forward, ADQ is focused on building freestanding drive-thru restaurants. The investment for this model ranges from $1,091,025 to $1,849,625, which includes the initial $35,000 franchise fee but does not include the cost of land.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Hathaway Specialty Insurance Fills Key Leadership Positions in Madrid

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Berkshire Hathaway Specialty Insurance has filled three key leadership positions in Madrid, naming Diego Espinosa as Head of Property, Juan Madrid as Head of Casualty, and Tomás Blas as Head of Technical Lines.

“We are pleased to build out our leadership team and capabilities in Spain with the addition of these highly experienced professionals to lead our entry into property, casualty and technical lines,” said Ignacio Almazan, Country Manager, Spain, BHSI. “We look forward to continuing to expand our capabilities and to bring BHSI’s underwriting acumen, service excellence and financial strength to this thriving market.”

Diego comes to BHSI with more than a decade of industry experience at RSA Spain, where he was most recently Property Development Leader/Property Lead Underwriter. He began his career at the Global Graduate Programme at RSA in Mexico. He holds a master’s in Business Administration from ESERP Business School and a degree in Chemical Engineering from the Instituto Technológico y de Estudios Superiores de Monterrey (ITESM).

Juan has more than 35 years of industry experience, most recently as Liabilities Manager at Chubb Iberia. Before that, he spent 14 years in casualty underwriting at AIG Europe Limited, most recently as Casualty, Healthcare and Motor Fleets Manager in Spain and Portugal. He began his carrier at Nacional Hispanica in 1984. Juan has a law degree from Universidad Autónoma de Madrid and a master’s in Insurance Management from ICEA.

Tomás has nearly 15 years of industry experience, most recently as Regional Head of Engineering Lines, Mediterranean Region at Allianz Global Corporate & Specialty (AGCS). Before that, he was Head of Engineering Lines for Spain & Portugal and Global Practice Group Leader of Utilities, Services, IT & Communications at AGCS. He received a degree in Industrial Engineering from the Universidad de Castilla-La Mancha and an executive master’s degree in Business Administration from the European School of Management and Technology in Berlin.

In Spain, BHSI will serve corporate business property and casualty accounts across all industries. In technical lines, BHSI is targeting construction, power, energy and engineering risks of all sizes.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Dairy Queen Shopping for New PR Firm

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Berkshire Hathaway’s International Dairy Queen, Inc. has cool new headquarter in Bloomington, Minnesota, and it may soon have a new PR firm as well.

Dairy Queen is reportedly shopping for a firm to replace its current PR firm, Pierson Grant, which has represented Dairy Queen’s 4,500 U.S. franchises for over a decade.

Pierson Grant is a full-service public relations, digital strategy and creative marketing firm based in Fort Lauderdale, Florida.

No information has been released as to a reason for making a change, or when it is anticipated to happen.

© 2019 David Mazor


Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Hathaway Specialty Insurance Enters the Surety Market in Australia

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Berkshire Hathaway Specialty Insurance is entering the surety market in Australia and has named Jonathan Griffiths as Head of Surety, Australia.

“We are pleased to expand our surety footprint and our team into Australia. With his extensive experience, Jonathan is exceptionally qualified to bring to market surety solutions with BHSI’s agility, underwriting expertise and financial strength,” said Mark Lingafelter, President, Australasia, BHSI.

BHSI will focus on providing contract surety solutions for large and mid-sized contractors throughout Australia. The company currently provides surety solutions in the U.S, Canada, UK & Europe and Asia.

Jonathan comes to BHSI with more than a decade of surety underwriting experience at Liberty Specialty Markets, where he was most recently Head of Surety, Asia-Pacific, based in Sydney. Before that he held increasingly senior roles underwriting surety for Liberty in Australia as well as North America, the UK and Europe.

He holds a bachelor’s degree in Business Economics from London Metropolitan University in the UK and an Associate in Fidelity and Surety Bonding certification. He has served as Vice President of the Australian Surety Association since 2015.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Berkshire Hathaway Plans $200 Million Wind Farm in Alberta

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Berkshire Hathaway’s BHE Canada will break ground on a new wind farm in southeast Alberta in 2020, and a large Canadian corporate partner has signed a long-term power purchase agreement with BHE Canada for the majority of the energy output from the Rattlesnake Ridge Wind project.

The new 117.6 MW Rattlesnake Ridge Wind project will be located southwest of Medicine Hat and will produce enough energy to supply the equivalent of 79,000 homes.

“The Rattlesnake Ridge Wind project is a leader in the development of new grid-scale wind generation in Alberta, being constructed and operated without government subsidies,” said William Christensen, Vice President Corporate Development of BHE Canada. “BHE Canada is excited to take this first step into the Alberta market, providing low-cost, renewable energy. We’re looking forward to more opportunities to invest in Alberta’s energy industry.”

“Alberta is proud to be home to so many great innovators and entrepreneurs who see the opportunity that exists when people choose to invest and create jobs here. This exciting new energy project will add to Alberta’s impressive renewable energy network, and is a vote of confidence in our economy. Even more encouraging is that this $200 million project does not rely on government subsidies, but instead relies on the potential and opportunity that exists right here in Alberta,” said Alberta Premier Jason Kenney.

Privately financed by BHE Canada through a combination of equity and debt, the more than $200 million project is under development by RES, which will also provide construction and asset management services. RES has extensive experience in building large-scale renewable energy projects around the world, including the 150 MW Halkirk Wind project in east-central Alberta. The project is expected to provide approximately 150 jobs at peak construction during the approximately 18-month schedule.

“RES is delighted to partner with BHE Canada to leverage our expertise and experience to bear in delivering clean renewable power to Alberta,” said Graham Reid, CEO of RES in the Americas.

Once the project is complete, the wind farm will generate electricity from up to 28 wind turbines and is expected to provide approximately 475 GWh per year. Rattlesnake Ridge Wind is expected to begin generating energy for Alberta’s grid in December, 2021.

BHE Canada and RES have also permitted the Forty Mile Wind Farm in the County of 40 Mile in southeastern Alberta and are looking for partners in long-term power purchase agreements. This project will have a generation capacity of 398.5 MW, potentially making it the largest wind power project in Canada, and is located on approximately 40,000 acres of privately-owned land, roughly five kilometres east of the town of Bow Island.

BHE Canada was established in 2015 after Berkshire Hathaway Energy (BHE) made its foray into the Canadian market with the purchase of AltaLink, Alberta’s largest independent transmission provider.

BHE Canada is focused on business opportunities within all aspects of the energy infrastructure market across Canada, including electricity transmission and distribution, and oil and natural gas infrastructure. With a particular focus on renewable energy, BHE Canada will invest in power generation sources including wind, solar and natural gas.

BHE Canada also owns a 20 MW natural gas fired, reciprocating engine driven generating facility northwest of Medicine Hat in southern Alberta. The facility went into commercial operation in December 2016.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD to Sell Electric Yard Trucks to PepsiCo

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Chinese battery and vehicle maker BYD will deliver three 8Y electric yard tricks to PepsiCo.

The company’s Frito-Lay facility in Modesto, California, will test out the trucks as part of a state project designed to showcase economically and environmentally sustainable warehousing and distribution technology.

The BYD 8Y electric yard trucks are part of what the California Air Resources Board (CARB) has termed a bold and transformative effort to replace the use of all diesel-powered freight equipment within one of Frito-Lay’s largest facilities.

“We’re honored to be part of this major milestone demonstrating the operational, economic, and environmental sustainability benefits of our zero-emission trucks,” said John Gerra, BYD Director of Business Development, Electric Trucks. “BYD trucks are out there right now working hard every day throughout California.”

The San Joaquin Air Pollution Control District is the lead agency with funding from CARB’s Zero and Near-Zero Emission Freight Facilities program.

The Frito-Lay Zero and Near-Zero Emission Project: Modesto, CA is part of California Climate Investments, a statewide program that puts billions of Cap-and-Trade dollars to work reducing greenhouse gas emissions, strengthening the economy, and improving public health and the environment — particularly in disadvantaged communities.

The project includes equipment testing, a one-year demonstration period, data collection, and associated reporting. The San Joaquin APCD anticipates the various equipment to be rolled out at different times to complete the demonstration, with full project completion in early 2021.

CARB anticipates the project will be emulated statewide.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Lubrizol Sets Up Fund for Environmental Damage from Rouen Fire

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According to the newspaper Les Echoes, Lubrizol will set up a fund of roughly 50 million euros pay for the losses of farmers and other industries affected by the fire that destroyed its chemical plant in Rouen, Normandy, France.

An estimated 5,250 tons of chemicals, oil and fuel additives went up in flames in a massive fire that caused roughly 40 to 50 million euros ($44-55 million) in agricultural losses in the surrounding area, according to France’s Agricultural Minister.

The government has ordered a ban on the harvesting of crops and sale of animal products from the area due to the oily soot that blanketed the countryside.

According to Les Echoes, Lubrizol will directly compensate some 450 farmers in the region due to the ban on milk production because of the blaze.

The Rouen plant was founded in 1954, and manufactured and packaged additives for lubricants and paint.

No casualties have been reported and the cause of the blaze has yet to be determined.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.