Tag Archives: Berkadia

Berkadia Arranges Nearly $1 billion in Financing

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has arranged financing totaling nearly $1 billion for the acquisition of the Beacon multifamily property portfolio.

Managing Directors Laura Cathlina and Sharon Plattner of Berkadia’s Chicago office secured the Freddie Mac loan on behalf of affiliates of Harbor Group International. The deal closed on November 30.

“Our team was pleased to have been given the opportunity to assist Harbor Group International with the financing of this exclusive portfolio that supports their diversified investment strategy,” said Cathlina. “The end result was a creative multi-faceted loan structure which will provide Harbor a significant amount of flexibility for future decision making. Our partners at Freddie Mac did an outstanding job in working with us to structure this transaction.”

The Freddie Mac financing encompasses 16 properties located in Boston, Baltimore, Chicago, Washington D.C. and Philadelphia, which are part of an overall 25 property portfolio. Eleven of the properties were financed with a fixed rate vehicle for over $789 million. The remaining five properties were financed with a floating rate vehicle for over $138 million.

“The acquisition of the Beacon portfolio represents a milestone transaction for Harbor Group International (HGI) as we continue to grow our investment portfolio,” commented T. Richard Litton, Jr., HGI president. “We are very appreciative of Berkadia’s work on our behalf to structure almost $1 billion of Freddie Mac fixed and floating rate debt.”

Since the beginning of 2017, Berkadia’s mortgage banking team has closed over $19 billion in production volume – an increase of 22 percent compared to the previous year. In 2016, Berkadia’s loan origination volume was $20 billion, ranking first with U.S. Department of Housing and Urban Development, second with Freddie Mac and fourth with Fannie Mae in delivered loan volume.

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 is among the top Freddie Mac and Fannie Mae multifamily lenders. In 2016, Berkadia’s loan origination volume was $20 billion, ranking first with U.S. Department of Housing and Urban Development, second with Freddie Mac and fourth with Fannie Mae in delivered loan volume—the only lender in the top four for all three organizations.

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.

© 2017 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.

Berkadia Names New Head of Mortgage Banking

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the addition of prominent industry veteran Hilary Provinse as Executive Vice President and Head of Mortgage Banking. She will oversee a team of 130 experienced mortgage bankers located in 31 offices across the country. Ms. Provinse will be a member of Berkadia’s Management Committee and report to Ernie Katai, Executive Vice President and Head of Production. She joins Berkadia from Fannie Mae after a 15-year career, where she most recently served as Senior Vice President and Head of Multifamily Customer Engagement.

“We are extremely fortunate to have Hilary join the Berkadia team,” said Berkadia CEO Justin Wheeler. “With more than 20 years of experience and leadership in CRE capital markets, she is a dynamic leader and forward thinker. Her positive energy and relentless drive to perfect the customer experience will continue to push our platform to new levels. A talent of her caliber is an incredible addition.”

Most recently at Fannie Mae, Provinse led a team of 85 professionals in offices across the country, overseeing all of Fannie Mae’s multifamily debt lending activities and customer engagement. She oversaw Fannie Mae’s transformation to a relationship-based, customer-centric sales organization and led the multifamily production team to double their production volume over a four-year period.

“I could not be more excited to join Berkadia, a client-first organization that provides holistic commercial real estate solutions through its integrated mortgage banking, investment sales and servicing platform,” said Ms. Provinse. “While at Fannie Mae, I saw Berkadia investing in its people and culture and focusing on innovation, process and technology to grow its mortgage banking footprint exponentially to better serve customers, and I’m thrilled to have the opportunity to build upon that success.”

Prior to her tenure at Fannie Mae, Ms. Provinse spent nearly a decade on Wall Street in investment banking and fixed income trading at Goldman Sachs and Bear Stearns. She earned a Bachelor’s degree from Dartmouth College and a Master of Business Administration degree from Northwestern University’s J.L. Kellogg Graduate School of Management.

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 is among the top Freddie Mac and Fannie Mae multifamily lenders. In 2016, Berkadia’s loan origination volume was $20 billion, ranking first with U.S. Department of Housing and Urban Development, second with Freddie Mac and fourth with Fannie Mae in delivered loan volume—the only lender in the top four for all three organizations.

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.

© 2017 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.

Berkadia Announces $41 Million in Financing for Multifamily Property in New Jersey

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the financing of a $41 million first mortgage for The Woods at Blue Heron Pines, a multifamily community in Galloway Township, New Jersey. Managing Director Jim Badolato and Senior Analyst Patti Henne of Berkadia’s Philadelphia office structured the financing through the firm’s partnership with Freddie Mac. The borrower is an entity controlled by DiLucia Management, a Pennsylvania-based management company.

Utilized to refinance a maturing loan, the new 10-year financing carries a sub-4 percent fixed interest rate and five years of interest only.

“DiLucia’s long-term commitment to the asset and its residents is evident, making this an ideal lending opportunity for Berkadia,” said Badolato. “Freddie Mac understood the fundamental strengths of the property and location. Despite proximity to Atlantic City, there is a diverse base of employment drivers and a limited supply of quality rental housing in the area. Major employers within five miles of the property include AtlantiCare’s headquarters, AtlantiCare Regional Medical Center, Stockton University, Atlantic City Airport and the Federal Aviation Administration William J. Hughes Technical Center, which employs over 2,500 people.”

The Woods at Blue Heron Pines is located at Bally Bunion Drive, affording convenient access to the Atlantic City Expressway and the Garden State Parkway. The Class A community has 330 units on over 58 acres with views of Ron Jaworski’s Blue Heron Pines Golf Club. The property features large floorplans averaging 1,458 square feet, each with a private garage. Developed by DiLucia in 2001, the asset is in excellent condition and has consistently performed at over 95 percent occupancy.

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 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.

© 2017 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.

Berkadia Division to Secure Financing for Mixed-Use Project in Downtown San Diego

(BRK.A), (BRK.B)

A joint venture led by Manchester Financial Group has engaged Berkadia Hotels and Hospitality to source a $650 million construction loan on the Manchester Pacific Gateway development.

The project is situated on San Diego’s waterfront and is the largest undeveloped urban waterfront site on California’s coast. The $1.3 billion project will include 2,823,188 million square feet of hotel, office and retail space in San Diego’s thriving downtown business district.

Berkadia’s Hotels and Hospitality group has been tasked with sourcing a 50 percent LTC non-recourse construction loan that will close by year end 2017. Berkadia Senior Managing Director Andrew Coleman and Managing Director Jackson Cloak will lead the team’s efforts.

Manchester Financial Group has extensive experience in developing convention center hotels and other commercial real estate, having developed more than $2 billion in assets in 11 states, including the Manchester Grand Hyatt San Diego, the 1,360-room San Diego Marriott Marquis & Marina, and the 249-room The Grand Del Mar—California’s only Forbes Triple Five Star resort. The company is currently in construction on the 1,066-room Fairmont convention hotel in Austin, Texas.

The property will include 1,205,490 square feet of office space, 391,231 square feet of retail space, 2,437 parking spaces, a 260-room boutique hotel, and will be anchored by an 1,100-room Four Seasons hotel.

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 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.

© 2017 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.

Berkadia Closed $221 Million in Financing for Brookdale Senior Living

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced it had closed $221 million in financing for Brookdale Senior Living Inc. on July 11.

The Fannie Mae Credit Facility is for 10 years and will be used to refinance two existing Brookdale loan portfolios. It has a a 75% loan-to-value ratio and a 30-year amortization schedule.

“The Fannie Mae Credit Facility product provided Brookdale flexibility to meet their financing needs. The Brookdale team, the Fannie Mae team and the Berkadia underwriting team worked together to make this transaction a seamless process,” said Berkadia’s Managing Director Heidi Brunet. She originated the transaction with Christopher Fenton.

Brookdale Senior Living is the leading seniors housing operator in the country and operates 1,036 communities with the ability to serve approximately 102,000 residents as of June 30, 2017.

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 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.

© 2017 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.

Berkadia Facilitates $60 Million Sale in Seattle

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the recent $60.7 million sale of Carroll’s Creek Landing, a multifamily property in the Seattle suburb of Marysville, Washington. Senior Managing Director Kenny Dudunakis and Directors David Sorensen and Ben Johnson of Berkadia’s Seattle office represented the seller, Maryland-based Gateway Trident LLC.

The buyer was JRK Property Holdings, and the deal closed on August 1.

“With large floor plans at half the price of similar units in King County, Carroll’s Creek Landing offers a great living option for families in the area,” said Dudnakis. “JRK Property Holdings specializes in providing attractive affordable housing, and we were excited to work with them on this acquisition.”

Built in 2002, Carroll’s Creek Landing is located at 18111 25th Ave., affording convenient access to several nearby shopping centers. The property features two-, three- and four-bedroom apartments with dishwashers, patios and walk-in closets. Residents can also enjoy several community amenities, including a welcome center, a basketball half-court, a clubhouse with a fireside lounge and a barbeque and picnic area.

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 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.

© 2017 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.

Berkadia Secures Loans for Buyers of Florida Keys Hotels

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has secured two loans approaching $14 million on behalf of Songy Highroads LLC, and the Wardman Group. Songy Highroads is an Atlanta-based real estate investor who recently acquired two hotel properties in Islamorada, one of the Florida Keys’ top destinations.

The Wardman Group is led by Thad Paul, a former Carlyle Group executive and Washington D.C. -based hotel expert.

Berkadia South Florida Senior Managing Director Charles Foschini and Managing Director Chris Apone arranged the financing.

First National Bank of South Miami provided $7.05 million to finance the acquisition of the Days Inn Islamorada Resort, a 37-unit property located about halfway between Miami and Key West.

The same lender also provided $6.8 million for the acquisition of Harbor Lights Islamorada, a similar-sized motel on five acres boasting 600 feet of Atlantic Ocean frontage. Both are five-year, fixed rate-loans, with partial interest only, at an aggressive rate.

“The typical motel in the Florida Keys is a ‘mom and pop’ operator and does not operate with a high degree of efficiency,” explained Foschini. “These motels, however, are in phenomenal locations on the ocean. Working together, Songy Highroads and Wardman recognized that operating the hotels as one will not only provide a more institutional approach to the management of the hotel, but bring a highly amenitized touch to a market starved for a quality experience in an intimate boutique setting. The lender also recognized the underlying value of the assets, and offered loan terms that were not only aggressive, but provided the capital needed to elevate the assets with upgrades, amenities and branding.”

The Days Inn Islamorada Resort is located at 82749 Overseas Highway; Harbor Lights is located slightly further south at 84951 Overseas Highway. Both are located in close proximity to popular attractions including Theatre of the Sea, Long Key State Recreation Park, Treasure Village and several diving and snorkeling sites.

Harbor Lights has been prominently featured in the Netflix hit series “Bloodline,” and maintains a cult following with fans of the show.

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 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.

© 2017 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.

Berkadia Completes Third Purchase with Kort & Scott Financial Group

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the sale of a newly constructed, 126-unit, mid-rise community located in Lake Balboa, California.

Managing Director Vince Norris, along with Managing Director Jim Fisher and Senior Director Mike Smith from Berkadia’s Los Angeles office completed the sale on an “off-market” basis.

The transaction was completed on behalf of a private developer for Anaheim-based, Kort & Scott Financial Group. Escrow closed on July 12.

Kort & Scott Financial Group has completed three recent purchases through Norris at Berkadia. In addition to this acquisition, the group also purchased 6940 Sepulveda Blvd. and the Plaza at Lafayette. For Kort & Scott, this marks nearly $250,000,000 of transactions this year and increases their multifamily portfolio to over 9,000 units.

“With this acquisition, Kort & Scott has over 220 units in the Van Nuys sub-market and will be able to achieve tremendous operating efficiencies and take advantage of the Valley’s steady rent growth,” said Norris.

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 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.

© 2017 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.

Berkadia’s Student Housing Group Closes Over $146 Million in Sales for Two West Coast Student Housing Properties

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced that its Student Housing Group has completed the sale of two properties totaling more than $146 million.

Berkadia’s student housing team, led by Managing Director Kevin Larimer and Director Greg Gonzalez, teamed with Senior Managing Director Kenny Dudunakis, Director David Sorensen and Director Ben Johnson of Berkadia’s Seattle office on the sale of AVA University District at University of Washington – Seattle on behalf of the seller, Arlington, Virginia based Avalon Bay Communities Inc. The student housing team, working with Managing Director Shane Shafer of Berkadia’s Irvine office, also closed Fullerton University Village at California State University in Fullerton, California on behalf of the seller, a local TIC group.

“Student housing seems to be the product type of choice right now for investors,” said Larimer. “Investors have identified the strong fundamentals of student housing with fewer deliveries, average occupancy above 97 percent, annual rent growth more than three percent and a fixed resident base from which to draw. Whether they are looking for yield or a defensive position, investors are finding a comfortable home for their capital in student housing.”

Located at 4535 12th Ave., AVA University District features studio, one- and two-bedroom apartments within walking distance of University of Washington and less than five miles from downtown Seattle. Units feature high-speed internet, a washer/dryer and air conditioning. The property also has a barbeque and picnic area, two rooftops with green spaces and on-site social events.

Fullerton University Village is located at 2000-2030 Oxford Ave., within walking distance of California State University, Fullerton. The property offers studio, two- and three-bedroom fully-furnished apartments with refrigerators, flat screen televisions and all utilities included in the cost of rent. Residents can also enjoy a fitness center, swimming pool, student lounge and monthly organized events.

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 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.

© 2017 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.

Berkadia Completes One of the Largest Multifamily Sales in San Diego History

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the completion of one of San Diego County’s largest apartment transactions to date—the $232 million sale of Pacific Ridge.

Managing Directors Ed Rosen and John Chu, as well as Directors Kyle Pinkalla and Erin Dammen, completed the property’s sale on behalf of a San Francisco-based entity, which was purchased by American Assets Trust, Inc, a San Diego-based REIT.

“Pacific Ridge was a high-profile deal in an extremely desirable location,” noted Rosen. “Our data shows that asking rents in San Diego are up 4.9 percent from Q1 2016. We anticipate that this increase coupled with the property’s prime location across the street from the University of San Diego’s campus will help create long-term stabilization and rent growth for the property.”

Berkadia also reports metro San Diego has the third-lowest unemployment rate among major metro areas in California, behind only San Francisco-Oakland and San Jose-Santa Clara.

“Renters and investors alike find themselves attracted to this area given the numerous opportunities,” added Chu. “The metro unemployment rate was 4.3 percent at the end of January, which was 60 basis points below the rate recorded during the same time period in 2016, and it was also 80 basis points below the California rate. Strong employment and apartment fundamentals help fuel a steady market.”

The Class A luxury community, located at 5945 Linda Vista Road, was built in 2013 and offers 533 units with floor plans ranging from studio to three-bedroom. Situated on more than 15 acres with unobstructed ocean views, the resort-style Pacific Ridge boasts Moroccan-styled indoor and outdoor retreats, sun-drenched lounges, two saltwater pools and spas, and an outdoor grill and dining pavilion.

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 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.

© 2017 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.