Ranieri Real Estate Partners and private equity funds affiliated with WL Ross & Co. have agreed to acquire Deutsche Bank Berkshire Mortgage (DBBM) today.
The two firms based in New York did not disclose the price it took to purchase the commercial real estate lending unit that is a subsidiary of the German-based bank.
DBBM originates multi-family loans for Fannie Mae, Freddie Mac and the Federal Housing Administration. The lender is the second largest originator of Fannie Mae loans and services a $28 billion loan portfolio.
“We believe that multi-family is a fundamentally important and growing sector of the housing market,” said James Lockhart III, vice chairman of WL Ross. “We have long been interested in this sector and we are confident that we have identified the right vehicle and point in the real estate cycle to pursue an investment.”
Jeff Day will remain the CEO of DBBM despite the acquisition and the current management team is also expected to stay with the company.
“The DBBM team has built a top-tier company with a solid business model and proven track record of providing needed liquidity to the multi-family housing industry,” said Jon Vaccaro, co-founder and CEO of Ranieri Real Estate Partners. “We expect the fundamentals of the multi-family market to continue to improve and the shifting preference toward renting over home ownership to fuel significant new demand, making DBBM a strong platform for future growth.”
The GSEs and FHA still have to approve the acquisition, but the firms expect this transaction to be completed by the end of this year.