**Completing Complex Deals is in Berkadia’s DNA**
Berkadia, now one of the largest and most prolific commercial mortgage, investment sales, and loan servicing firms in the U.S., has a compelling origin story that underscores its enduring commitment to long-term value and complex dealmaking.
The company emerged from the ashes of Capmark Financial Group, which filed for bankruptcy in 2009 following the global financial crisis. The journey to becoming what is now a 50/50 joint venture between Berkshire Hathaway and Jefferies (formerly Leucadia) was anything but straightforward. In fact, it was “my favorite deal of all time,” said Ernie Katai, Executive Vice President and Head of Production at Berkadia, during a recent episode of the firm’s podcast series, *Inside the Deal: a CRE Podcast by Berkadia®*. Katai noted that the intricate structure of the bankruptcy transaction took nearly a year to complete.
CEO Justin Wheeler recalled a pivotal early moment—a conference call with Warren Buffett. “The very first thing out of [Buffett’s] mouth was, ‘Hey, are you guys as excited about Berkadia for the next 10 years as I am?’” That long-term view, Wheeler said, helped shape the company’s strategic direction. Out of that vision came the understanding that Berkadia’s business—transactional and intermediary in nature—was better served as a private entity with patient capital, making decisions that focus on long-term industry relevance rather than quarterly returns.
From an initial group of 50 producers, Berkadia has since grown to over 380 producers and expanded its capabilities beyond middle-market lending. Today, the firm is active in both middle-market and institutional property sales, provides extensive loan servicing, and partners with UK-based Knight Frank to serve ultra-high-net-worth investors.
Wheeler attributes much of the company’s continued success to the high caliber of professionals it attracts and retains. “Whenever I’m on a pitch… I’m amazed by not just the number of years of experience we have, but by our producers who’ve really solved problems and provided solutions to clients in a creative way that added real value.”
One standout example of that creative problem-solving came in a recent podcast episode featuring the financing of a highly complex $20.3-million HUD 221(d)(4) acquisition loan. The deal enabled Sunrise Affordable Housing Group to re-convert a Clearwater, Florida apartment tower—originally constructed for low-income senior residents—from market-rate housing back into affordable units for low-income families.
Sam Caspert, a partner at Sunrise Affordable, called the structure “incredibly complicated.” Tim Leonard, Senior Managing Director with Berkadia Affordable Housing, outlined the challenges, starting with the 10-year rule required for properties to be eligible for Low Income Housing Tax Credits (LIHTC) based on acquisition costs. Because the property had recently gone through ownership changes and was converted to market-rate housing, it did not meet the requirement. Finding an applicable workaround became crucial.
The second major challenge was negotiating sufficient time with the seller to execute a new tax credit transaction. “Sam successfully did that,” Leonard said. “It just took 16 months.” Caspert explained that with the seller’s price expectations, the usual route would have entailed raising rents and doing another value-add renovation. Instead, Sunrise presented a plan that counterintuitively proposed decreasing rents—but offered to meet the seller’s price if they allowed enough time to structure the deal properly.
Among the deal’s numerous moving parts—Leonard estimated between 15 and 20—was the need to educate HUD on their unique strategy. “Once we educated HUD, they were all in,” he said, especially once they saw the local and state support for the rehabilitation project.
The transaction involved substantial rehab work on a 1970s-era high-rise, along with a delicate process of tenant displacement. Leonard praised the sophistication and alignment of all stakeholders involved. “Outside of places like New York, I’ve yet to run across this level of public support, intelligent stakeholders on all sides, and financing complexity,” he said. “This is rare.”
Berkadia’s ability to navigate such complex, multi-faceted deals speaks to the culture it has cultivated since its inception—one rooted in patience, long-term value, and unwavering client service.
