ORIX Corporation USA has made another key purchase to expand its presence in the multifamily housing industry.
The firm announced it has signed a definitive agreement to acquire Hunt Real Estate Capital, a subsidiary of Hunt Cos. Details about the deal, which is expected to close this year, were not released.
It’s the latest acquisition by ORIX USA officials, who also have added RED Capital Group and Lancaster Pollard to its holdings in recent years.
“Hunt Real Estate Capital’s portfolio of products and its geographic footprint perfectly complement those of ORIX Real Estate Capital brands, Lancaster Pollard, and Red Capital Group. Hunt Real Estate Capital’s leadership team combined with our existing teams provides the expertise required to forge these three groups into a single and cohesive full-service entity, says Terry Suzuki, ORIX USA president and CEO.
Upon closing, 15-year industry veteran James P. Flynn, Hunt Real Estate Capital’s president and chief investment officer, will be CEO of the combined entity. “I am very excited about joining forces with the talented teams at Lancaster Pollard and Red Capital,” Flynn says. “While we each bring unique strengths and competencies to the table, we share a commitment to service and dedication to the long-term interests of our clients.”
The result will be “a full-scale, major commercial real estate lender with a national presence in virtually all lending products and the balance sheet and support of our parent in ORIX that’s really unmatched in the nonbank, nonregulated environment,” says Flynn, adding that the companies involved have little overlap in terms of product and geography.
“That’s a key to why this is such a good transaction and marriage,” he says.
New York-based Hunt Real Estate Capital is a commercial real estate lender offering the full range of Fannie Mae, Freddie Mac, and Federal Housing Administration (FHA) financing, as well as proprietary bridge, term, and subordinated products. It has a nationwide network of 25 offices. Hunt Capital Partners, the tax credit syndication arm of Hunt Cos., is not involved in the deal.
The acquisition adds new and complementary services to ORIX, agrees Jerry Abrahams, CEO of ORIX Commercial Mortgage Serving Group. For example, Hunt will bring new tools to the company with its Freddie Mac conventional and affordable licenses. At the same time, ORIX brings its extensive FHA experience to Hunt customers.
Combining the businesses allows ORIX to have a diversified product mix to assist multifamily owners and developers, he says.
While Lancaster Pollard and Red Capital were combined to form ORIX Real Estate Capital, they have continued to originate business under their existing brands and maintain their sector focus. Lancaster Pollard is a leading lender to the senior living and health-care industries, and Red Capital is a leading FHA lender and an experienced loan servicer. Both are headquartered in Columbus, Ohio.
Hunt Real Estate Capital, which has approximately 270 employees, also will continue to operate under its existing brand for the time being, but leadership plans to work to create a new single brand for the entire platform after closing.
“This is very exciting for all of us at ORIX Real Estate Capital, as the combined companies give us one of the most well-rounded multifamily platforms in our segment of the market,” says Nick Gesue, CEO of ORIX Real Estate Capital. “This transaction will take us an important step closer to achieving the goals our talented team has been working so hard to attain.”
The combination of Hunt Real Estate Capital and ORIX Real Estate Capital will create a commercial real estate finance platform with annual loan production in excess of $9 billion and a servicing portfolio of more than $40 billion.
A subsidiary of ORIX Corp., the Japanese-based financial services giant, ORIX USA provides a wide range of innovative capital solutions for clients in the corporate, real estate, and municipal finance sectors. ORIX Corp. assets exceed $100 billion, and it has approximately $400 billion of assets under management. The firm also acquired Boston Financial Investment Management in 2016.
Advisors for ORIX USA on the transaction included Beekman Advisors as financial advisor and Davis Polk & Wardwell as legal advisor. For Hunt Real Estate Capital, Paul, Weiss, Rifkind, Wharton & Garrison, LLP, served as legal advisor.
