2021 was defined by unprecedented investor appetite for multifamily, single-family-rental, and student housing assets
Berkadia JV Equity & Structured Capital, a dedicated team of professionals at Berkadia that focuses exclusively on the equity side of the capital stack, marked a record-breaking year in 2021, having capitalized more than $2 billion* in property transactions. The team, led by Chinmay Bhatt, Noam Franklin and Cody Kirkpatrick, sourced institutional equity partners for 49 commercial real estate transactions across the country, including market rate multifamily acquisitions, ground-up multifamily projects, single-family-rental/build-to-rent communities (SFR/BTR), hotel-to-multifamily conversions, student housing assets and property recapitalizations. Since being acquired by Berkadia in 2019, the team has capitalized more than $3 billion in property transactions, consisting of 12,927 apartment units, 1,280 student housing beds, and 1,754 SFR/BTR units across 18 different states.
Berkadia JV Equity & Structured Capital is unique in the industry for its exclusive focus on equity. Drawing on their relationships with a wide variety of domestic and foreign capital sources, including HNW investors, private equity, pension funds, insurance companies and family offices, the team works with clients to structure JV equity, senior equity, preferred equity/mezzanine debt, ground leases, stretch senior A/B notes and co-GP/entity-level partnerships.
“This has been one of the most active years ever for our team on account of the red-hot multifamily market,” said Bhatt. “There’s more capital than ever chasing multifamily deals, including a lot of foreign capital sources which previously focused on office and retail assets. Given these dynamics, we anticipate 2022 will be another strong year across the residential spectrum.”
“Because the multifamily space has become so competitive,” added Franklin, “a big focus for us this past year has been establishing programmatic relationships between experienced sponsors and capital sources. Deals move quickly and go non-refundable early in the process, so having a capital partner already lined up allows teams to be more aggressive, which is crucial in today’s market.”
“Unique, story-driven, value-add acquisitions and recapitalizations continue to be appealing to JV equity in addition to well-located suburban development opportunities from local or regional sponsors with a continued preference for the high growth sunbelt markets,” said Kirkpatrick.
Some of the team’s deal highlights of 2021 include:
- Securing a platform-level joint venture partner for SB Real Estate Partners to acquire more than $250 million of multifamily assets located in Arizona, California, and Nevada in Q3/Q4-2021
- Arranging a programmatic capital partner to help Capstone Communities execute its plan to continue developing approximately a $1 billion pipeline of build-to-rent (BTR) communities across the Southeast
- Sourcing a joint venture partner, EJF Capital, to contribute $31.7 million towards Toll Brothers Apartment Living®’s development of “Rafferty,” a new 218-unit multifamily rental community located in a Qualified Opportunity Zone (QOZ) in Santa Ana, CA
- Arranging a capital partner for Dallas-based Encore Multifamily to develop “Encore Lower Broadway,” a five-story, 386-unit apartment community in San Antonio, TX
- Securing a publicly traded REIT as a preferred equity partner to contribute $38.45 million toward Strategic Diversified Realty Holdings’ recapitalization of a nine-property multifamily portfolio located in Florida and Georgia valued at $290 million
- Arranging a $25 million preferred equity facility for a REIT focused on the build-to-rent (BTR) space to recapitalize its current scattered-site projects in Texas and develop more purpose-built BTR opportunities in the Dallas-Fort Worth area
- Arranging a $62 million stretch senior loan for the acquisition of Nine East 33rd, a 157-unit/568-bed, off-campus student housing property fronting Johns Hopkins University in Baltimore, MD
Berkadia, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is a leader in the commercial real estate industry, offering a robust suite of services to our multifamily and commercial property clients. Through our integrated mortgage banking, investment sales and servicing platform, Berkadia delivers comprehensive real estate solutions for the entire life cycle of our clients’ assets. To learn more about Berkadia, please visit www.berkadia.com.