(BRK.A), (BRK.B)
Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has acquired the apartment brokerage practice of Moran & Company, expanding Berkadia’s core capabilities to include an enhanced focus on institutional investment sales.
The partnership will launch Berkadia Institutional Solutions, powered by Moran, a platform dedicated to serving institutional investors nationally through Berkadia’s robust suite of services and resources combined with Moran’s strong institutional investor relationships, built on trust, client service and collaboration.
“This is a tremendous day not just for the Berkadia and Moran teams, but most importantly for our clients—the primary focus in everything we do,” said Berkadia CEO Justin Wheeler. “We remain optimistic about the future of multifamily and are committed to building the most robust CRE platform in the country, powered by the best talent in our industry. There’s no team more experienced or respected in the institutional sales space than Moran.
Together, we will transform apartment institutional investment sales nationally, offering our clients industry leading advice, resources and support to create new opportunities and better outcomes for long-term success.”
Moran Co-Chairman Mary Ann King will be joining Berkadia as Co-Head of Investment Sales and Head of Berkadia Institutional Solutions, powered by Moran, working together with Keith Misner, SVP and now Co-Head of Investments Sales, to lead the integration of the entire 31-member Moran team, including 15 dedicated institutional sales advisors, into Berkadia.
The commercial real estate industry has witnessed record-breaking private real estate equity fundraising in the past few years, with $83 billion raised in 2019 and $23 billion through June 2020 according to Preqin. The sector continues to gain favor with investors as it provides an opportunity to hedge risk and enhance portfolio diversification. Multifamily real estate in particular has demonstrated impressive resilience, coupled with long-term income growth and liquidity characteristics, generating attractive risk-adjusted returns over the past 25 years according to the NCREIF Property Index (NPI).
Moran’s 25-year legacy in multifamily investment sales, with a specialized focus on institutional investors, will complement Berkadia’s existing investment sales, mortgage banking and servicing platforms, delivering greater access to fully integrated commercial real estate solutions.
“At Moran, we’re incredibly proud of our legacy, but always thinking ahead to how we can better anticipate—and answer—our clients’ long-term needs. In joining Berkadia, we’re doing just that,” said Thomas F. Moran, Founder and Co-Chairman of Moran & Company. “Like us, Berkadia is privately-owned and shares our client-centric and collaborative mindset, our focus on people, and our commitment to integrity and excellence.”
“Moran’s team culture and client-focused approach has enabled us to build one of the best apartment institutional sales platforms in the business,” said King. “Now, as Berkadia Institutional Solutions, powered by Moran, we’ll truly be a fully integrated platform with a national presence for our clients, providing them with actionable insights, industry expertise and technology, supported by a full suite of capital markets resources, to maximize their long-term success. We’re energized and excited to move forward together at Berkadia and execute our shared vision for the future.”
In the past two years, Berkadia has executed several other strategic acquisitions aimed at broadening the firm’s depth of expertise and enhancing the firm’s comprehensive offerings, including the:
• Acquisition of Central Park Capital Partners, which launched Berkadia’s Joint Venture Equity & Structured Capital Group;
• Addition of a tax credit syndication and advisory platform with the integration of Riverside Capital into Berkadia Affordable; and
• Acquisition of LIHTC Advisors, a brokerage firm dedicated to providing full-service solutions for apartment investors and focusing on Low Income Housing Tax Credit (LIHTC) and other affordable housing properties.
Additionally, the organization has attracted elite talent across the country, including New York City, Boston, Chicago, Houston, Philadelphia, Dallas, Seattle, Indianapolis, Denver, St. Louis, Southern California, Orlando, Richmond and Birmingham, and within specialty categories, such as Affordable Housing, Hotels & Hospitality, HUD and Student Housing.
Berkshire and Berkadia
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.
© 2021 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.