Ranieri Real Estate Partners LP (RREP), a real estate financial services company, and private equity funds affiliated with WL Ross & Company LLC (WL Ross) have entered into a definitive agreement to acquire Deutsche Bank Berkshire Mortgage (the company or DBBM), a subsidiary of Deutsche Bank. DBBM originates multifamily loans for Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). DBBM is the second largest originator of Fannie Mae loans and services a $28 billion multifamily loan portfolio.
DBBM was founded in 1988 and became a unit of Deutsche Bank in 2004. It has 160 employees and operates out of three primary offices in Bethesda, Md.; Boston and Irvine, Calif. and has additional offices in Dallas, Los Angeles, Nashville and Seattle. Jeff Day will remain as chief executive officer and the current management team and staff are expected to remain 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 LP. "We are very pleased to partner with WL Ross, Jeff Day and the DBBM team at this important time. 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 acquisition is expected to be completed by the close of 2011, and the company will be renamed following the closing. Completion of the transaction is not contingent on financing, but is subject to approval by the GSEs and the FHA, as well as other customary closing conditions.
“We believe that multifamily is a fundamentally important and growing sector of the housing market," said James B. 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. We look forward to working with Ranieri Real Estate Partners to build on DBBM's strong performance.”