Regions Bank has entered into a definitive agreement to acquire Sabal Capital Partners, a financial services firm that leverages a technology-driven origination and servicing platform to facilitate lending in the small-balance commercial real estate market.
Headquartered in Irvine, California, Sabal is a top originator of Fannie Mae and Freddie Mac small-balance commercial real estate loans and has a growing presence in non-agency commercial mortgage-backed securities loan origination. Sabal has originated nearly $6 billion in financing across the nation since inception and maintains a servicing portfolio of nearly $5 billion. It serves clients through its innovative SNAP platform, a proprietary tool that optimizes the lending and communication processes with clients as well as Sabal’s investor base.
According to Birmingham, Alabama-based Regions Bank, it plans to incorporate Sabal into its growing Real Estate Capital Markets division.
“With the addition of Sabal Capital Partners, Regions will become even better positioned to further build on our client base and deliver an expanded range of agency and non-agency options for real estate lending,” said Joel Stephens, head of capital markets for Regions Bank. “Sabal’s industry-leading technology platform and its leadership in the small-balance commercial real estate arena make the company a great match for Regions.”
Stephens said its current affordable and large-balance government-sponsored enterprise (GSE) products paired with Sabal’s small-balance GSE capabilities will allow Regions Bank to offer a full spectrum of agency offerings.
With Sabal Capital Partners’ SNAP platform, it has created a competitive edge in delivering agency multifamily and commercial real estate lending services. Its GSE finance solutions include Fannie Mae Small Loans, Freddie Mac Optigo Small Balance Loans, and Freddie Mac Optigo Conventional Loans.
“For years, our work has been defined by a constant focus on innovation, and Sabal Capital Partners joining the forward-thinking team at Regions Bank is a natural fit as Sabal offers tailored lending solutions and reaches more clients together with Regions,” said Pat Jackson, CEO at Sabal Capital Partners. “By joining Regions, Sabal can make an even greater impact through combining technology-powered services with years of experience and strategic decision-making to deliver unparalleled services for new and existing clients.”
Regions will maintain Sabal’s flagship offices in Irvine and Pasadena, California, and in New York City. The combined platform will have 20 production offices across the nation.
The acquisition is expected to close in the fourth quarter, subject to obtaining necessary consents from certain governmental agencies and GSEs. The acquisition agreement is specific to the lending and servicing segments of Sabal Capital Partners’ business and does not include its investment management business, which will remain with the sellers, including Jackson, and investment funds managed by Stone Point Capital. Jackson and Mike Wilhelms, chief financial officer at Sabal, will remain with the investment management business while other members of the leadership team will join Regions.
Beekman Advisors represented Regions in the transaction, and Davis Polk & Wardwell served as Regions’ legal counsel. For Sabal Capital Partners, Wells Fargo Securities served as financial adviser and Kramer Levin Naftalis & Frankel served as legal counsel.
Regions has acquired financial service providers in recent years, including the 2020 acquisition of equipment finance lender Ascentium Capital and the 2019 acquisition of institutional investment firm Highland Associates. On Oct. 1, it completed the acquisition of home improvement point-of-sale lender EnerBank USA.