Ranieri, WL Ross to acquire Deutsche mortgage unit

Firms headed by Lewis Ranieri and Wilbur Ross have teamed up to buy Deutsche Bank's $28 billion multifamily loan origination business.

Real estate investment management firm Ranieri Real Estate Partners and private equity funds affiliated with WL Ross & Co. have teamed up to buy Deutsche Bank's multifamily origination subsidiary, Deutsche Bank Berkshire Mortgage (DBBM), according to a joint announcement. Terms of the agreement were not disclosed as the deal has not yet been finalised.

Founded in 1988 under the name Berkshire Mortgage and acquired by Deutsche Bank in 2004, DBBM originates multifamily loans guaranteed by Fannie Mae, Freddie Mac and the Federal Housing Administration. The subsidiary is the second largest originator of Fannie Mae loans and services a $28 billion multifamily loan portfolio. Although Deutsche Bank declined to comment, sources familiar with the situation said the German bank is selling the platform because it is not a core business.

Jon Vaccaro

This transaction marks the first big deal for Ranieri Real Estate Partners, a subsidiary of Ranieri Partners, which was founded in 2010 by mortgage bond maven Lewis Ranieri. Jon Vaccaro, co-founder and chief executive of Ranieri, said in a statement: “We expect the fundamentals of the multifamily market to continue to improve and the shifting preference toward renting over home ownership to fuel significant new demand, making DBBM a strong platform for future growth.”

WL Ross vice chairman James Lockhart added: “Multifamily is a growing sector of the housing market. We have long been interested in this sector, and we are confident that we have identified the right vehicle and point in the real estate cycle to pursue an investment.”

The acquisition is expected to be completed by the end of the year. Although the acquiring firms announced that DBBM will be renamed following closing, Jeff Day will remain as chief executive. The current management team and staff also are expected to remain with the company.