Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has arranged $47.675 million in acquisition financing for Veve at Castle Hill, a 328-unit multifamily community located in the Clermont submarket of Orlando.
Senior Managing Director Charles Foschini, Managing Director Christopher Apone and Senior Analyst Lourdes Carranza-Alvarez secured the loan on behalf of Advenir, a real estate investment and management firm based in Miami.
“The Orlando MSA has proven to be a well-established multifamily market for numerous reasons. With an economically diverse center for business, excellent location in central Florida and moderate cost of living, the area will continue to attract investment as strong market performance is expected despite rising interest rates,” said Foschini. “Orlando’s below state average unemployment rate and exponential growth trend create exceptional fundamentals for a flourishing multifamily market.”
Freddie Mac originated the 10.5-year loan with 10 years interest only. The LTV ratio was 70 percent.
Built in 2017, Veve at Castle Hill is located at 13600 Hartle Groves Place. One-, two-, and three-bedroom units feature faux wood plank flooring, raised panel interior doors with brushed nickel hardware, washer and dryer, chef-inspired kitchens, and high-end European-style vanity doors with brushed nickel hardware. Community amenities include a 4,200-square-foot swimming pool, sun deck with cabanas, fire pit, massage room, clubhouse and 24-hour fitness center.
Situated in the Clermont submarket of the Orlando MSA, Veve at Castle Hill is found near important transit routes and employment hubs. Florida’s Turnpike and West Colonial Drive are less than 10 minutes away, providing easy access to downtown Orlando and Orlando International Airport. Universal Orlando is less than 30 minutes away and Walt Disney World is under 40 minutes away from the community, offering close proximity to major economic drivers.
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 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.
© 2018 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.