Capital One & Beech Street Capital Form New Top-5 Multifamily Originator

Capital One announced Friday the signing of a definitive agreement to acquire Beech Street Capital, a privately-held, national originator and servicer of Fannie Mae, Freddie Mac and FHA multifamily commercial real estate loans. Capital One will expand multifamily banking business with the acquisition, creating a one-stop banking solution for the multifamily sector. The terms of the transaction were not disclosed. The acquisition is expected to close in the fourth quarter of 2013. The combined entity becomes a top-5 national multifamily originator.

Founded in 2009, Beech Street is an originator, underwriter and servicer of multifamily commercial real estate loans and is one of the largest national providers of government-insured mortgage loans through the multifamily lending programs of Fannie Mae, Freddie Mac and FHA. Through its scalable origination and servicing platform, Beech Street originated approximately $4 billion in loans in 2012, making the company the sixth largest agency originator in the country. Beech Street services a loan portfolio of approximately $10 billion.

“As we continue to expand our product capabilities and services for clients across our growing Commercial Banking business, this acquisition is a logical expansion of our already substantial commitment to the multifamily sector,” said Michael Slocum, President of Capital One’s Commercial Banking Group. “The combination of Capital One’s multifamily business and Beech Street will make us a top 5 national multifamily originator and one of the few institutions in the US capable of offering clients a one-stop banking solution encompassing a full range of banking services.”

“The addition of Beech Street strengthens our multifamily business, provides a national presence, and enables us to meet the needs of clients in the multifamily sector with a complete set of banking services that includes agency program loans, bank balance sheet loans, treasury services, and capital markets solutions,” said Rick Lyon, Head of Commercial Real Estate Banking, Capital One. “We have great respect for the experience, leadership, and unique expertise Beech Street founder and CEO Grace Huebscher and her exceptional management team bring to Capital One. Like us, Grace and team are passionate about the client. They are solution-oriented, and focused on seamless execution and ongoing customer service, all balanced with prudent risk management. We believe the market will see significant benefits from this powerful combination of industry-leading expertise, greater resources, and expanded capabilities,” added Lyon.

Capital One Financial Corporation (NYSE: COF) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N. A., had $209.9 billion in deposits and $296.5 billion in total assets as of June 30, 2013. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has more than 900 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland,Virginia and the District of Columbia. A Fortune 500 company, and is included in the S&P 100 index.

“We share Capital One’s vision of bringing together two complementary and high performing teams to boost our position in the multifamily space,” said Huebscher. “We look forward to driving our business to the next level as an important part of Capital One’s growing multifamily business.”

Headquartered in Bethesda, Maryland, Beech Street has offices in Alabama, California, Florida, Georgia, Illinois, Massachusetts, New York and Texas. Together, Capital One and Beech Street will have portfolio loan servicing and origination capabilities nationally.