Berkadia Arranges for $648.2 Million in Financing for Senior Housing Portfolio

(BRK.A), (BRK.B)

Berkadia has provided loan financing through its Fannie Mae Program for $648.2 million in financing for the acquisition of 32 senior housing properties spanning 12 states, including California, Missouri, Texas and Washington.

The borrower will use the financing for the acquisition of the portfolio, which sold for $875 million. The 10-year, fixed-rate loan features a 4.17 percent interest rate, 73.5 percent loan-to-value ratio and a 30-year amortization schedule. The individual loans were crossed collateralized and crossed defaulted.

The financing came through Berkadia’s Seniors Housing and Healthcare group, and Managing Director Christopher Fenton and Senior Director Jay Healy of Berkadia’s Seniors Housing and Healthcare group worked with NorthStar Realty Finance Corp. to secure the financing.

“Our team’s extensive underwriting experience in the seniors housing sector enabled us to secure attractive loan terms for this sizable portfolio in only 45 days from when the application was signed,” said Fenton. “This experience, coupled with our deep market insight and excellent client service, allowed us to effectively and efficiently manage this portfolio’s impressive scale and geographic scope.”

About Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation, Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA. The company was among the top Freddie Mac and Fannie Mae multifamily lenders for 2013.

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.

© 2015 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.