Thursday, December 17, 2009

Warren Buffet Completes Buy of Capmark's Servicing, Loan Business

I blogged on this earlier last month but I thought I'd share it again for anyone who missed it.

"Berkadia Commercial Mortgage LLC, a newly formed entity owned by Berkshire Hathaway Inc. and Leucadia National Corp., completed the acquisition of Capmark Financial Group Inc.'s (Capmark) North American loan origination and servicing business.

Capmark, which in October voluntarily filed for reorganization under Chapter 11, received approval from the U.S. Bankruptcy Court for the District of Delaware to complete the sale.

The sale includes a servicing portfolio of more than $240 billion - the third largest in the United States - as well as leading Fannie Mae, Freddie Mac, FHA, life insurance company correspondent lending and asset management operations. As of June 30, Capmark was named special servicer on 8,618 loans in 113 CMBS transactions with an outstanding balance of $47.5 billion. Capmark was actively specially servicing 280 CMBS loans totaling $2.4 billion and managing 57 CMBS real estate owned properties valued at $342.9 million.

Berkadia has more than 20 origination and servicing locations in markets across the country and will be based in Horsham, PA.

Berkadia has indicated that it will retain all of Capmark's servicing management and staff and intends to keep current business plans in place. Additionally, the company will retain Capmark's systems, vendor relationships and policies and procedures. Berkadia is in the process of hiring more than a thousand of Capmark's approximately 1,500 current employees.

Fitch Ratings said it views the completion of this transaction favorably as it removes the risk associated with Capmark Financial Group's financial instability."

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