Orix Corp. USA, the North and South American arm of Tokyo-based financial services giant Orix Corp., is acquiring commercial real estate lender Hunt Real Estate Capital, a subsidiary of Hunt Companies, for an unspecified price.
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The deal is the latest in the effort by Orix to establish a larger presence in U.S. commercial real estate finance, particularly the multifamily sector. In 2010, Orix bought Red Capital Group, which specializes in affordable housing lending. In 2017, the company acquired Lancaster Pollard Holdings, which specializes in senior housing finance.
“Hunt Real Estate Capital’s portfolio of products and its geographic footprint perfectly complement those of Orix Real Estate Capital brands Lancaster Pollard and Red Capital Group," Dallas-based Orix USA President and CEO Terry Suzuki said in a statement.
Hunt Real Estate Capital offers its own proprietary loan products, as well as products through Fannie Mae, Freddie Mac and the Federal Housing Administration. Currently the New York-based Hunt Real Estate Capital services a commercial loan portfolio of $16.3B. Hunt Cos. is a private holding company that invests in operating businesses, real estate assets and infrastructure.
Orix USA provides capital for multifamily, affordable, seniors and healthcare real estate deals through its wholly owned subsidiaries, Boston Financial Investment Management and Orix Real Estate Capital.
Lancaster Pollard and Red Capital were combined to form Orix Real Estate Capital at the beginning of 2019, but the two companies continue to originate business under their existing brands and have maintained their specialties. The companies originate about $4B billion of loans annually, with a servicing portfolio of $25B.
Upon closing of the Hunt Real Estate Capital deal, Hunt President and Chief Investment Officer James Flynn will be the CEO of the combined entity.
Orix USA's expansion in the multifamily mortgage sector comes at a time of increasing multifamily lending. According to the Mortgage Bankers Association's annual report on U.S. multifamily lending volume, which was released in September, favorable market conditions spurred a 19% increase in multifamily lending in 2018 compared with the year before.
Last year, 2,669 different multifamily lenders provided a record $339.2B in new mortgages for apartment buildings with five or more units, MBA reported.
