CWCapital has acquired multifamily lender Sierra Capital Partners in a push to expand on the West Coast. The Irvine, Calif.-based Sierra Capital Partners originated about $300 million annually in Freddie Mac debt, with a servicing portfolio of about $825 million. Terms of the deal were not disclosed.
The acquisition allows CWCapital to offer Freddie Mac loans in the West to go along with its other agency programs. Previously, CWCapital was only licensed to sell Freddie Mac loans in the Southeast.
The acquisition also brought two seasoned originators in Trent Brooks and Bryan Frazier, who founded Sierra Capital in 2003 after long stints at Bankers Mutual. Brooks and Frazier will stay on as managing directors and run CWCapital’s West Coast agency lending platform. Sierra’s remaining 10 employees will also come over to CWCapital.
“Over the next year or so, we’ll double the size of the operation, to go from 12 to about 25 people,” says Michael Berman, CWCapital’s president and CEO. “And we plan on having more loan officers in San Francisco and some more in Southern California.”
The Boston-based CWCapital has a strong East Coast presence, but its coverage of Western markets was limited. While the firm has a one-man shop in Seattle, and small offices in San Francisco and Portland, Ore., the acquisition gives the company an instant, established presence in Southern California.
Sierra was one of the few remaining independently owned agency lenders left but has now aligned itself with a full-service shop. “We go back quite a ways with the agencies,” Brooks says.
While Brooks and Frazier were at Banker’s Mutual, the company received the first Freddie Mac multifamily license west of the Mississippi in 1985, and was also among the original group of lenders approved for Fannie Mae’s DUS program in 1988. Both have served on the advisory councils of Fannie Mae and Freddie Mac.
“We didn’t sell because we had to; it’s not about a price today as much as it is the opportunity over the next five years,” Brooks says. “As the recovery takes hold and values stabilize, there’s going to be a few full-service lending platforms positioned to be the preferred execution and we intend to be one of them.”
The move was the latest in CWCapital’s expansion efforts. Earlier this year, the company struck a joint venture with Apartment Realty Advisors on a national debt platform called ARA Finance, and also inked a new alliance with Kendall Realty Advisors to expand its FHA lending program.
What’s more, the company is working on re-establishing its conduit line to take advantage of the government’s TALF program. “We’re looking at putting together our own TALF financing program with a couple of joint venture partners, possibly in the form of a fund,” Berman says.