Category: Berkadia

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has arranged $262.5 million in acquisition financing for Key Center, Cleveland’s tallest skyscraper—a 1.3 million-square-foot, Class-A office tower and the adjacent Marriott Hotel and parking structure.

The property is located in Cleveland’s Public Square. Senior Director Mark Vogel secured the acquisition loan, representing Berkadia’s largest conduit loan to date. The deal was completed on January 31, 2017.

Berkadia represented The Millennia Companies, which is headquartered in Cleveland. The seller was Columbia Property Trust, Inc. The 10-year senior mortgage fixed loan lead by Citibank, included Bank of America and Deutsche Bank. Apollo Global Management provided the mezzanine debt financing.

“Key Center is an iconic part of Cleveland’s skyline and represents the state of Ohio’s tallest building,” said Vogel. “The institutions involved in this transaction acted extremely aggressively. They provided a substantial portion of the required capital to facilitate the acquisition and fund future improvements related to the hotel’s redevelopment and the building’s increased occupancy. Berkadia worked diligently with the entire Millennia team, and it was truly a collaborative effort.”

Built in 1991, the integrated, mixed-use complex Key Center comprises a 57-story office tower, a 400-room Marriott Hotel and a parking structure. It also houses the headquarters of both the property’s namesake, Key Bank, and law firm BakerHostetler.

At the end of 2016, the office tower was 82 percent leased. A portion of the asset will become Millennia’s new headquarters, moving hundreds of employees from Rockside Road to Key Tower over the next year. Millennia’s lease, along with the anticipated move of Forest City Realty Trust, Inc. to Key Center, will increase the building’s occupancy up to 95 percent.

“We are already in the design phase of a $24 million renovation to the tower lobby, plaza and hotel,” said Frank Sinito, president of The Millennia Companies.

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.

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has arranged a $49.5 million loan for Centric Apartments, a new multifamily property in Cleveland.

Director Dan Geuther secured the construction loan from Related Fund Management. The deal was completed on December 20.

The borrower was Midwest Development Partners, LLC, based in Shaker Heights, Ohio. The non-recourse construction loan features a three-year, interest only initial term, with two one-year extension options.

“The project–which was several years in the making–will fill a major need in the University Circle market and complete the transformation of a site which is considered by many as the best multifamily location in the city,” said Geuther. “To have a sophisticated lending partner like Related committed to the project says a lot about the strength of the development team and the University Circle market.”

Centric Apartments will be located at 11601 Mayfield Road in University Circle, the city’s arts, educational and medical hub. The property, which is directly adjacent to the Little Italy-University Circle RTA light-rail station, will feature 272-units, 27,000 square feet of commercial space, a 360-space parking garage and two-thirds of an acre of public green space.

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.

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the recent sale of Coronado Villas, a 432-unit multifamily property in Tucson, Arizona. Senior Managing Director Art Wadlund and Associate Director Clint Wadlund of the Tucson office completed the $43 million sale at a price-per-unit of $99,537.

The seller was Prime Residential, based in San Francisco, and the buyer was Oregon-based Tokola Properties.

“Tokola Properties was looking to purchase a quality property in Arizona,” Art Wadlund said. “With apartment occupancy increasing and job growth accelerating in the Tucson area, the buyer recognized the opportunity Coronado Villas presented to be located within a growing multifamily market.”

Built in 1994, Coronado Villas is located at 9225 E. Tanque Verde Road and affords convenient access to Catalina Highway. The one-, two- and three-bedroom units feature a washer/dryer, double-sided wood burning fireplaces and vaulted ceilings in select units. Community amenities include a fitness center, three swimming pools and spas and a clubhouse. Saguaro National Park East is situated four miles from the property, and top employers in the area include Tucson Unified School District and the Arizona National Golf Club.

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.

© 2016 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.

(BRK.A), (BRK.B)

With its Houston-based team on target to reach $3.5 billion in debt production volume, Berkadia, Berkshire Hathaway’s joint venture with Leucadia, has expanded its Houston operations in order to accommodate the growing team of investment sales and commercial lending experts.

The Houston Berkadia team tripled its office space when it relocated from a 6,200 square foot space at 2200 Post Oak Boulevard to an 18,000-square-foot office at 2229 San Felipe Street.

At the same time, it noted that it its mortgage banking team had reached a milestone in its production volume, on target to hit $3.5 billion in debt production volume alone over the last 18 months.

To accommodate this massive growth in production, Berkadia’s Houston team has added approximately 30 new professionals over the past 18 months, warranting the more expansive office space for the larger team.

“We’re very bullish on the Houston market in the long-term and we are seeing tremendous demand for Berkadia’s expertise in commercial real estate and mortgage banking both locally and regionally,” said Tucker Knight, Berkadia Senior Managing Director. “Our business has expanded despite many in the market contracting.”

Added Berkadia Senior Managing Director Ryan Epstein, “Berkadia provides a combination of investment sales and mortgage banking expertise all under one roof, which has resonated wit’h clients across the spectrum. We anticipate a very strong pipeline of business in the months and years ahead.”

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 was among the top Freddie Mac and Fannie Mae multifamily lenders for 2013.

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.

© 2016 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.

(BRK.A), (BRK.B)

Berkadia has announced the recent sale of Oak Springs Ranch, a 312-unit multifamily property in Wildomar, California. Managing Directors Ed Rosen and John Chu and Directors Kyle Pinkalla and Erin Dammen of the San Diego team completed the $78.5 million sale, which closed on September 30.

The seller was Oak Springs Ranch, LLC, comprised of developer GLJ Partners and affiliates of Dallas-based Sarofim Realty Advisors. Oak Springs Ranch drew attention from both institutional and private capital, and was ultimately purchased by San Diego-based R&V Management Corporation.

“Oak Springs Ranch presented a great investment opportunity in a thriving market that has attracted a lot of attention over the past year due to strong job growth,” Rosen said. “In fact, the Inland Empire has hit its lowest unemployment rate since before the recession.”

The property, built in 2014, offers one-, two- and three-bedroom floor plans. Unit amenities include kitchens with quartz countertops and white European cabinetry, wood-style flooring, soaking tubs and walk-in showers, full-size washer and dryer units and central air and heat. Select units offer balconies and patios, gas fireplaces and garages. The community’s residents enjoy access to a fitness center, lounge, pools and spas, outdoor grilling and picnic areas and a 14-acre open space with a walking trail. Oak Springs Ranch also hosts a variety of community events throughout the year.

Located at 24055 Clinton Keith Road, Oak Springs Ranch provides quick access to major employment areas across the Inland Empire as well as Los Angeles, Orange and San Diego counties. The expanding job market and sustained apartment demand fueled a 6 percent annual increase in rents in the third quarter of 2015, making the Riverside metro area one of the top ten in the United States for rent growth.

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 was among the top Freddie Mac and Fannie Mae multifamily lenders for 2013.

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.

© 2016 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.

(BRK.A), (BRK.B)

Berkadia has announced that it successfully negotiated the sale of the 2,826-unit Star Portfolio consisting of 11 separate apartment communities located in four states – Maryland, Pennsylvania, North Carolina and South Carolina. The purchase price for these assets was in excess of $300 million.

Berkadia’s Senior Managing Directors Scott Melnick and David Oakley negotiated the transaction on behalf of the buyer, Morgan Properties JV, an affiliate of Morgan Properties, one of the nation’s largest multi-family owners. Deutsche Bank represented the seller.

All of the Star Portfolio properties are located in very desirable, high-barrier submarkets in close proximity to major development hubs and public transit. Morgan Properties will execute an extensive, multimillion dollar value-add repositioning plan in aggregate to enhance the value of each property, and the renovation strategy will include premium kitchen and bath renovations and top-of-the-line amenity upgrades.

The six suburban Maryland apartment communities include Silver Spring Station, Westerlee, The Willows, St. Mary’s, Taylor Park and Willowood; in Pennsylvania, The Greens at Westgate; in South Carolina, The Waterway and Forest Oaks; and in Raleigh, North Carolina, Falls Creek and Heather Park.

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 was among the top Freddie Mac and Fannie Mae multifamily lenders for 2013.

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.

© 2016 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.

(BRK.A), (BRK.B)

Berkadia has announced that Frank Lutz, Senior Vice President, Conventional Origination, has been elected by the Mortgage Bankers Association (MBA) to serve as chairman of its Fannie Mae DUS (Delegated Underwriting and Servicing) Lender Peer Group.

The DUS program is a unique risk-sharing model whereby lenders retain some of the underlying risk of the loans they sell to Fannie Mae, financing multifamily properties throughout the country. Last year, the DUS program provided over $42 billion of financing to the multifamily market, representing approximately 569,000 units.

The DUS program is comprised of 25 multifamily seller servicers approved as delegated partners by Fannie Mae.

“We are pleased that Frank was selected for this honor,” said Justin Wheeler, CEO of Berkadia. “His many contributions to the MBA support Berkadia’s longstanding history with the organization and reinforce our position as a leading DUS lender. We congratulate Frank on this recognition and support him in his efforts.”

Lutz joined Berkadia in 2011, and he is responsible for managing Berkadia’s relationships with Freddie Mac and Fannie Mae, as well as aspects of production including loan structuring, volume, profitability and credit quality. Under his leadership, Berkadia has become a top lender with both Freddie Mac and Fannie Mae, ranking second with Freddie Mac in 2015 for the fourth consecutive year and third with Fannie Mae in terms of delivered loan volume for the same time period. Berkadia was the sole lender to rank in the top three with both organizations in 2015.

Prior to joining Berkadia, Lutz was with Fannie Mae where he was an officer of the company, having acquired extensive experience in managing lender relationships and customers, developing business and resolving troubled loans.

Lutz has a master’s degree in business administration from Villanova University and a Bachelor of Science degree from Penn State University.

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 was among the top Freddie Mac and Fannie Mae multifamily lenders for 2013.

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.

© 2016 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.

(BRK.A), (BRK.B)

Berkadia, a joint venture of Berkshire Hathaway and Leucadia National Corporation, has again been recognized by CMO Asia for its outstanding Real Estate Servicing operations in Hyderabad, India.

Berkadia was named BPO Organization of the Year and one of Asia’s Best Employer Brands at the Outsourcing Excellence Awards ceremony held on August 5 in Singapore.

Ned Mody, Country Manager for Berkadia’s operations in India, was on hand to accept the awards. The ceremony was attended by representatives from nearly 500 companies.

“We are honored to be named BPO Organization of the Year for the second year in a row and one of Asia’s Best Employer Brands by such an esteemed organization as CMO Asia,” said Ned Mody. “To be recognized as one of the Best Employer Brands affirms Berkadia’s core belief that people matter as we foster a culture of collaboration, engagement and support in our day-to-day operations. We are proud to be acknowledged among our peers for our commitment to the development of our employees and our platform.”

Berkadia’s servicing platform supports all commercial real estate products and market sectors including commercial mortgage-backed securities, balance sheet lending, life company portfolios, agency programs, institutional investments and other servicers.

“We thank CMO Asia for their recognition and we commend our teams both in India and the U.S. for their unyielding support and hard work,” said Mark McCool, President of Berkadia Commercial Real Estate Services. “Without their knowledge and expertise, we wouldn’t be able to provide the consistent high-level of service our clients have come to expect from Berkadia. Our Hyderabad and U.S. Servicing operations work together seamlessly and I couldn’t be prouder of them.”

CMO Asia is a leadership and networking organization dedicated to knowledge exchange for senior executives across industries. The Asia Outsourcing Excellence Awards recognize companies who demonstrate best practices, create and sustain competitive advantage, provide business transformation and achieve value that, over time, benefits both the buyer and service provider.

© 2016 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.

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Leucadia National Corporation, has announced the recent sale of the Parkway Apartments and Townhomes, located in West Lafayette, Indiana. Senior Director David Gaines, Senior Director Alex Blagojevich and Associate Director Chris Bruzas of the Chicago office completed the $10.85 million sale, reflecting a $24,327 per-unit price. It closed on May 9.

The seller was an affiliate of FM Capital from New York. The buyer, Abbott Properties from Kansas City, Missouri, was drawn to the property’s strong value-add potential and plans to renovate both the interior and exterior and streamline operations.

“We continue to see high demand from investors across the country for similar value-add properties, where their construction and management teams can go in and efficiently operate the properties,” said Gaines.

“Abbott Properties recognized a great opportunity to upgrade its portfolio,” added Bruzas. “In this instance, the Parkway Apartments and Townhomes is their second large property in central Indiana, and they now own and manage over 1,000 units in the area.”

Built in 1965, the 446-unit property includes studio, one-, two- and three-bedroom floor plans. Community residents also have access to amenities such as a pool and fitness center.

The Parkway Apartments and Townhomes is located at 2601 Soldiers Home Road, with convenient access to Interstate 65 and U.S. Route 52. It is three miles from Purdue University and seven miles from the Tippecanoe Mall. Top employers in the area include Purdue University, Wabash National Corporation, Evonik Industries and TRW Automotive.

In the first quarter of 2016, vacancy in the Lafayette metro market was 5.1 percent. During this period, asking rents advanced 6.4 percent year-over-year to $1,263.

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 was among the top Freddie Mac and Fannie Mae multifamily lenders for 2013.

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.

© 2016 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.

(BRK.A), (BRK.B)

When people talk about hot real estate markets they usually don’t talk about Cleveland, Ohio, but that may be about to change. At least Berkshire Hathaway seems to think so.

Berkadia Commercial Mortgage, Berkshire Hathaway’s joint venture with Leukadia, has acquired Cleveland-based mortgage-banking firm RiverCore Capital.

RiverCore Capital is headed by managing partner Mark J. Vogel.

Among the company’s major transactions were $84,000,000 in non-recourse bridge financing for the One Cleveland Center Penton Media building, and $92,000,000 in senior debt financing for the Flats East Bank.

“Obviously Cleveland’s an interesting market, and it’s one that doesn’t have a lot of national players,” said Justin Wheeler, chief executive officer at Berkadia.

It does now.

© 2016 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.