BB&T to acquire commercial mortgage company
BB&T Corporation (NYSE: BBT) principal subsidiary Branch Banking and Trust Company today said it plans to buy commercial real estate finance company Collateral Real Estate Capital LLC of Birmingham, Ala.
BB&T would combine Collateral with Laureate Capital LLC, its existing commercial mortgage banking firm, and give BB&T one of the largest full-service commercial and multifamily mortgage banking companies in the nation. The combined company would have a commercial real estate servicing portfolio of more than $20 billion.
The transaction is subject to regulatory approval and investor consents and is expected to be completed in the fourth quarter. The combined company’s new name and brand will be announced at closing. Terms were not disclosed.
“This acquisition is consistent with our announced strategy to add high quality, well managed, nonbank financial services companies,” said Clarke Starnes, BB&T’s manager of Specialized Lending. “Partnering with the very experienced professionals at Collateral will significantly strengthen our commercial mortgage franchise with a compatible business and management team.”
The combined company will offer a full range of commercial real estate financing programs, including life insurance companies, pension funds, commercial mortgage-backed securities and proprietary products. The company also will be a Fannie Mae DUS ® (Delegated Underwriting and Servicing) lender, a Freddie Mac Program Plus ® Seller/Servicer, and will offer multifamily products insured by the Federal Housing Administration (FHA). The combined company’s projected originations for 2007 are more than $9 billion.
With a $10 billion loan servicing portfolio in 43 states, Laureate Capital primarily arranges permanent commercial and multifamily real estate loans. It also services loan portfolios, and provides asset and portfolio management, and real estate brokerage services. Operating predominately in the Southeast and mid-Atlantic, Laureate Capital has about 150 employees in its 17 offices and Charlotte, N.C.-based corporate headquarters and loan servicing center.
“This will be a transforming event for Laureate Capital and BB&T, one that will substantially increase our specialty product lines – including the addition of a Fannie Mae platform along with enhanced Freddie Mac geographic coverage,” said Laureate Capital President and Chief Executive Officer Thomas Dennard, who will be named chief executive officer of the combined company.
“This merger provides additional needed depth in highly qualified management and producer personnel. It will also add a complete array of capital solutions along with our life insurance and commercial mortgage-backed securities placement capabilities. With the increased capabilities, we plan to provide both third-party and on-book bridge financing to facilitate and position long-term financing opportunities.”
With a $10 billion loan servicing portfolio, Collateral provides debt and equity capital as well as consulting and advisory services for all types of commercial and multifamily real estate across the nation. One of the largest privately owned commercial mortgage companies in the nation, Collateral’s production volume was more than $5 billion in 2006.
Collateral has about 180 employees in its 14 offices and Birmingham, Ala.-based corporate headquarters and loan servicing center. Laureate Capital and Collateral will combine overlapping offices in Atlanta, Birmingham, Indianapolis and Jacksonville, Fla.
Corporate headquarters for the new company will be in Charlotte, with underwriting for Freddie Mac, Fannie Mae, FHA and proprietary loan operations remaining in Birmingham. The loan servicing centers will continue to operate in both cities.
“A merger with Laureate is a growth opportunity too promising to pass up,” said Collateral President and CEO David Roberts, who will be named president and chief operating officer of the new company.
“Especially when you consider we also will benefit tremendously from our association with BB&T and its strong balance sheet and investment ratings. In all, we’ll gain an expanded delivery network for Collateral’s investment partners and enhanced access to capital markets and proprietary lending sources.”
Laureate Capital operates production offices that serve Alabama, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia and Washington, D.C. BB&T acquired Laureate in 2000. More information about the company is available at www.laureatecap.com. More information about Collateral is available at www.collateral.com.
The acquisition would expand BB&T’s commercial mortgage operation into Kansas City; Milwaukee; Dallas; Ft. Lauderdale, Fla.; Orlando, Fla.; Minneapolis; Chicago; Columbus, Ohio; and Madison, Wis.
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