(BRK.A), (BRK.B)
Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has announced the closing of $327 million in fixed and variable rate financing for Brookdale Senior Living, Inc.
Berkadia’s Senior Managing Directors Heidi Brunet and Lisa Lautner of the Seniors Housing & Healthcare team originated the transaction through Freddie Mac’s new Structured Pool Transaction program.
The deal closed on November 16 and will be used to refinance 28 senior housing facilities representing approximately 2,200 units.
The ten-year, non-recourse Structured Pool Transaction features fixed and variable rate loan components and a 30-year amortization schedule. The fixed rate component was $213 million and the variable rate component was $114 million.
The property was financed through Freddie Mac’s Green Advantage program, which provides competitive pricing to finance upgrades that reduce energy or water consumption.
In 2017, Berkadia’s Seniors Housing team completed more than $1.7 billion in loan volume, including closing over $1 billion in financings in a single day.
Berkadia’s Seniors Housing & Healthcare group leads the industry in innovative and comprehensive solutions for even the most complex independent living, assisted living, memory care and skilled nursing projects across the country.
In addition to deep market knowledge, the group offers a full set of advisory, underwriting, loan origination services and products including FHA, Fannie Mae, Freddie Mac, Life Company, Proprietary Bridge Lending and Capital Markets Advisory Services.
Last year, the team expanded its capabilities by adding an investment sales presence, rounding out its full-suite of services.
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.
© 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.