Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has Berkadia has announced the $100 million financing secured for Ernst & Young Office Tower, a 23-story office property in downtown Cleveland.
Senior Managing Director Mark Vogel and Associate Director Eric Bevilacqua of the Cleveland office secured the refinancing through JP Morgan with mezzanine debt from Axonic, on behalf of Ohio-based The Wolstein Group.
The deal closed on December 6.
The two-year permanent refinancing features an adjustable interest rate, three one-year extension options, an 80 percent loan-to-value ratio and interest only payments.
“We were honored to work through this complicated transaction on behalf of The Wolstein Group and are thrilled with the resulting financing terms,” said Vogel.
Located at 950 Main Ave., Ernst & Young Office Tower offers convenient access to the area’s restaurants, commuter rail and the waterfront district of Cleveland. The property features 465,000 square feet of leasable office space, and on-site amenities include garage parking, a dry cleaner, a fitness center and a concierge. The building was 95 percent occupied at the time of the financing.
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.