JER sells special servicing, CDO businesses

The McLean, Virginia-based real estate firm has sold its special servicing and collateralized debt obligations management businesses to C-III Capital Partners.

JER Partners has sold its special servicing and collateralized debt obligations (CDO) management operations to C-III Capital Partners, an Irving, Texas-based commercial real estate services company. Terms of the transaction were not disclosed.

JER had been the servicer for $35.5 billion of commercial real estate loans, of which some $4 billion currently are in special servicing and under active management. The company will retain its private equity real estate investment business, through which it has acquired and managed about 15,000 assets totaling $28 billion.

“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 chief executive of C-III Capital Partners. “Special servicing is a key foundation of our strategy to create a fully diversified commercial real estate company.”

The JER businesses are the latest in a string of acquisitions by C-III, which began operations with the purchase of Centerline Capital Group’s commercial loan servicing and institutional real estate debt fund management businesses in March 2010. In June, C-III agreed to acquire NAI Global, the world’s largest network of independent commercial real estate services firms.

Meanwhile, JER is said to be in talks to sell its European private equity funds business to Chicago-based LaSalle Investment Management, as the firm seeks to refocus its efforts on the US. The European arm manages JER's three European funds, which have a total of €1.1 billion in equity commitments and €4.4 billion in gross investments.

C-III will incorporate JER’s special servicing business into its subsidiary, C-III Asset Management, a primary and special servicer of commercial real estate loans that now will oversee approximately 14,000 loans totaling more than $152 billion, of which some $17 billion currently are in special servicing.

In addition to commercial mortgage servicing, C-III’s other business lines include commercial real estate lending, investment management, real estate brokerage and title insurance.