CWCapital will soon acquire Rockwood Real Estate Advisors, Apartment Finance Today has learned.
New York-based Rockwood, widely known as a best-in-class real estate investment banking firm, is led by co-CEOs Daniel McNulty and John Magee. The 20-year-old company offers a variety of advisory and transactional services, including debt and equity restructuring, investment sales, and arranging debt and equity finance.
Last summer, Boston-based CWCapital was acquired by affiliates of Fortress Investment Group from Canadian pension fund Caisse de Depot et Placement du Quebec. Ever since, the company has pursued a more entrepreneurial, aggressive growth strategy. “This is a whole new vision we’re working on,” said Michael Berman, CWCapital’s president and CEO, in an interview last September.
CWCapital is a prolific agency lender, one of the Top 10 Fannie Mae, Freddie Mac, and Federal Housing Administration originators in the market today. But the company has been looking to expand its business into more of a one-stop shop, offering a variety of executions beyond the agencies. And bolstered by its recent recapitalization, Berman said that acquisitions would figure prominently into those growth plans.
“We’re working on bringing in a multifamily equity brokerage operation,” Berman hinted during the September interview. “We’re looking at all pieces of the capital stack and all different kinds of executions, everything from equity, preferred equity, mezzanine, whole loans, B-notes, you name it.”
Rockwood’s core competency of arranging equity certainly plays into that expansive vision. And the acquisition would further another of the company’s strategic goals, expanding its presence in New York City.
“CWCapital is a completely recapitalized company, and it makes sense they would be interested in some strategic acquisitions,” says Dan Fasulo, managing director of New York-based market-research firm Real Capital Analytics. “And Rockwood is at the highest level of the industry, a great team, but they didn’t have the scale to compete with some of the other big boys.”
The acquisition would not only expand CWCapital’s breadth of services—especially in pairing equity with its lending operations—but would also bring in a high level of intellectual capital.
“The level of sophistication necessary to execute real estate transactions has gone up significantly in the past 10 years,” Fasulo says. “Everyone’s looking for the one-stop shop these days, and asking for more sophisticated capital markets expertise whether that includes joint venture structuring, or linking investors through other capital sources, or dealing with all the different debt options out there.”
The Boston-based CWCapital announced the potential acquisition to its clients at a recent client conference, according to sources that requested anonymity. Rockwood would retain its name and all current employees are expected to transfer over.
Both CWCapital and Rockwood declined to comment for this story. The acquisition is still in process—but like all pending acquisitions, could be derailed. It is currently expected to close in the next 30 days.
CWCapital is also working on some other new platforms to further diversify its business. The company hopes to roll out a conduit platform, a bridge loan program, a life insurance company correspondent desk, and an affordable housing-focused division, later this year.