Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, continues to grow. Berkadia has acquired Central Park Capital Partners, a boutique real estate capital advisory firm focused on arranging joint venture investments and structured capital from international and domestic institutional and qualified capital sources.
CPCP’s Founder and Managing Principal Noam Franklin and Principals Chinmay Bhatt and Cody Kirkpatrick will launch Berkadia’s Structured Capital Group to offer greater support and resources to Berkadia clients.
Mr. Franklin and Mr. Bhatt will be based out of Berkadia’s New York City headquarters, while Mr. Kirkpatrick will operate out of Berkadia’s Denver office.
“With our acquisition of Central Park Capital Partners, we’re redoubling our efforts to make the accessibility of joint venture and structured capital a true differentiator with new levels of personalization and customization for the mutual benefit of our clients,” said Berkadia CEO Justin Wheeler. “As the cycle matures and deal structures become more sophisticated, tapping into a wide range of joint venture capital is critical to our clients. Having worked with Noam, Chinmay and Cody on a number of successful deals, CPCP was the obvious choice for a competitive acquisition.”
“The CPCP team has deep relationships with diverse domestic and international joint venture capital sources and they share our long-term view and dedication to client service,” continued Wheeler. “With the launch of Berkadia’s Structured Capital Group, we’re truly a one-stop shop—enabling clients to take advantage of competitive opportunities in the market in a more streamlined manner and driving greater value.”
In 2018, Berkadia completed over $34 billion in combined mortgage banking and investments sales production across more than 1800 transactions.
“We’ve been working closely with the Berkadia team recently and have been impressed that they share our targeted approach to client engagement and deal execution,” said Mr. Franklin. “We have strong domestic and international capital relationships, particularly in the Middle East, Canada, Europe and Asia.”
“In joining Berkadia, we’re bringing a diverse roster of new capital sources to the table, creating enhanced joint venture matchmaking opportunities backed by best-in-class insight, technology and experience,” continued Mr. Franklin. “Considering current market conditions, owners and developers are looking beyond their traditional partners and seeking to grow their stable of joint venture funding sources in order to capitalize deals. As Berkadia’s Structured Capital Group, we’re well positioned to meet this challenge and create synergies that will drive results for all stakeholders.”
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.