Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has announced the sale and financing of a 399-unit garden-style multifamily property in Fort Worth, Texas.
Managing Directors Jay Gunn and Tom Burns, along with Senior Directors Taylor Hill, Michael Ware and William Jarnagin, all of Berkadia’s Dallas office completed, the sale on behalf of the seller Atlanta-based Cortland. The buyer was Houston-based Hilltop Residential.
The deal closed on February 5.
“This was a unique community with value-add potential, and as such, we experienced higher-than-normal levels of interest and tour activity,” said Gunn. “We continue to see strong investor demand flow to the Fort Worth side of the metroplex.”
Director Nicholas Murphy of Berkadia’s Houston office secured acquisition financing through Wells Fargo for Hilltop Residential. The three-year interest-only loan features a floating rate and a 65 percent loan-to-value ratio.
“Berkadia identified a capital partner who shared the same vision as the borrower and had a lending program that aligned with the borrower’s business plan,” said Murphy. “The lender agreed to finance 100 percent of the capital improvement plan and close in a short time frame, creating a perfect financing vehicle to facilitate the transaction.”
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.