C-III Capital Partners LLC (C-III) announced today that it has acquired the commercial real estate special servicing and CDO management businesses of JER Partners (JER), a private real estate investment management company. JER is the named special servicer for $35.5 billion of commercial real estate loans, of which approximately $4 billion is currently in special servicing and under active management.
C-III will merge JER’s special servicing operations into its wholly-owned subsidiary, C-III Asset Management LLC, which is a highly rated primary and special servicer of commercial real estate loans. With the acquisition, C-III is now the named special servicer for approximately 14,000 loans with an aggregate balance in excess of $152 billion, of which approximately $17 billion is currently in special servicing.
“This acquisition strengthens C-III’s position as one of the top three special servicers in the country and advances our growth strategy,” said Andrew Farkas, Chairman and CEO of C-III Capital Partners. “Special servicing is a key foundation of our strategy to create a fully diversified commercial real estate company.”
“JER’s servicing portfolio, depth of experience and industry expertise will be a great fit with C-III,” stated Paul Smyth, President of C-III Asset Management. “We look forward to integrating their exceptional team of professionals into our expanding, highly experienced C-III team.”
The acquisition of JER’s special servicing and CDO management businesses follows 16 months of tremendous growth for C-III. C-III commenced operations with the purchase of Centerline Capital Group’s commercial loan servicing and institutional real estate debt fund management businesses in March 2010. Since that time, C-III has successfully launched mortgage origination, investment sales and title insurance businesses and expanded its principal investment, loan origination, fund management and primary and special loan servicing businesses. On June 22, 2011, C-III announced its agreement to acquire NAI Global, the largest network of independent commercial real estate services firms worldwide.
Financial terms of the transaction with JER were not disclosed.
About C-III Capital Partners
C-III Capital Partners LLC is a leading commercial real estate services company engaged in a broad range of activities, including primary and special loan servicing, loan origination, fund management and principal investment. The company’s principal place of business is located in Irving, TX, and it has additional offices in New York, NY, Greenville, SC and Nashville, TN.
C-III Asset Management LLC, a wholly-owned subsidiary of C-III Capital Partners, is a highly rated servicer (primary and special) of commercial real estate loans. Its clients include issuers of commercial mortgage-backed securities (CMBS) and collateralized debt obligations (CDOs), institutional lenders and other investors. C-III Asset Management is rated “CPS 2-” by Fitch and “Above Average” by Standard & Poor’s as a primary servicer, and is one of the highest rated special servicers in the industry with ratings of “CSS 1-” by Fitch and “Strong” by Standard & Poor’s. For more information, visit www.c3cp.com.
About JER Partners
JER Partners is a fully integrated private real estate investment management company with 30 years of experience in sourcing, underwriting and managing a broad spectrum of real estate equity investments and debt products in the U.S. and Europe. Together with its financial and operating partners, JER Partners has purchased and managed approximately 15,000 assets totaling $28 billion. The firm also invests in CMBS, mezzanine financing and other structured debt products. For more information, visit www.jer.com.
Fitch Ratings has reviewed C-III Investment Management LLC as a potential replacement collateralized debt obligation (CDO) collateral asset manager and determined its capabilities to be consistent with Fitch’s criteria for credit asset managers for the following transactions:
–Nomura CRE CDO 2007-2
–AMAC CDO Funding I
On April 18, 2011, Fitch was notified of a proposal to transfer the CDO collateral asset management responsibilities for the above mentioned CDOs from C-III Asset Management LLC to C-III Investment Management LLC, both of which are subsidiaries of C-III Capital Partners LLC. The key employees and technology infrastructure are expected to remain in place. Fitch’s review procedure for potential replacement CDO collateral asset managers is outlined in the criteria ‘Global Structured Finance Rating Criteria’, dated Aug. 13, 2010, and in the special report, ‘CDO Asset Managers: U.S. Replacement Activity Update’, dated Dec. 9, 2010, both available on the Fitch Ratings web site at ‘www.fitchratings.com‘.
C-III Investment Management LLC is a subsidiary of C-III Capital Partners LLC, whose controlling parent company is Island Capital Group LLC. C-III Capital Partners LLC, a real estate services company with offices in New York, NY and Irving, TX, is engaged in a broad range of activities, including principal investment, loan origination, fund management, and loan servicing. C-III Capital Partners LLC currently employs 270 professionals and manages approximately $2 billion of invested capital for four real estate debt and equity funds and CDOs.
Read the full release on Business Wire.
Investor Andrew Farkas, who helped grow the dominant New York-based Edward S. Gordon Company into a global firm that was later acquired by CB Richard Ellis, plans to purchase the commercial services firm NAI Global, according to a statement from the company.
Andrew Farkas’ C-III Capital Partners, based in Irving, Tex., entered into an agreement today to buy the company. Terms of the sale were not released. The deal is expected to close in the third quarter.
See the full article on The Real Deal.
C-III Capital Partners LLC (C-III) announced today that it has entered into a definitive agreement to acquire NAI Global, the largest and premier network of independent commercial real estate firms worldwide. C-III is led by Andrew Farkas, who founded and was Chairman and CEO of Insignia Financial Group, Inc. (NYSE:IFS). NAI Global will continue to operate as a separate company under its current management following the acquisition.
NAI manages a network of commercial real estate firms comprising 5,000 professionals and 350 offices in the US and 55 countries throughout the world. NAI’s network members provide a full spectrum of corporate, financial, technology and project management services.
“C-III plans to use its asset base, along with strategic acquisitions such as NAI, to create a fully diversified commercial real estate services company,” said Andrew Farkas. “This is the strategy that was successful for Insignia. C-III is led by the same team that built Insignia, and with C-III’s significantly larger asset base, I believe C-III can substantially exceed Insignia’s success,” concluded Mr. Farkas. At its height, Insignia managed $12.5 billion in assets, while today C-III’s portfolio approximates $150 billion in assets. Insignia was one of the largest commercial real estate services companies in the world when it merged with CB Richard Ellis in 2003.
Read the full press release on Business Wire.
The level of commercial real estate loan distress appears to be at or nearing its peak – a welcome sign that the worst of the Great Recession may have passed. And with this new phase, the market for distressed commercial real estate borrowers and investors is also undergoing major changes.
NAI Global noted that LNR Partners and CIII Capital Partners are selling a tremendous amount of product through a large auction now and the FDIC has another $700 million portfolio to be sold in the third quarter of 2011.
“We believe we are at the tipping point towards a more normalized market where new originations will commence in early in 2012 reflecting normal CMBS output and lending patterns similar to 2005 and 2006,” the company said. “Though 2012 will see more distressed debt opportunities we see an overall slow down as the economy and its recovery finally impacts real estate positively.”
Read the full article on CoStar Group.