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RREP and WL Ross Team Up to Buy DBBM

A new acquisition is in the works for ""Ranieri Real Estate Partners LP"":http://www.ranieripartners.com/(RREP) and ""WL Ross & Co. LLC"":http://www.institutional.invesco.com/portal/site/invescoinst/template.PAGE/menuitem.41f20d94768ecd0bf8800610e14bfba0/?javax.portlet.tpst=2e6278338af9dcd5b888d60ae14bfba0&javax.portlet.prp_2e6278338af9dcd5b888d60ae14bfba0_viewID=MY_PORTAL_VIEW&javax.portlet.prp_2e6278338af9dcd5b888d60ae14bfba0_contentpath=%2FHome%2FAbout%20Us%2FAbout%20Us%2FInvestment%20Centers%2FWL%20Ross%20%26%20Co.%2FTeam%2FWL%20Ross%20%26%20Co.%20Team&javax.portlet.begCacheTok=com.vignette.cachetoken&javax.portlet.endCacheTok=com.vignette.cachetoken (WL Ross). The companies have combined forces, recently entering into a purchase agreement to buy ""Deutsche Bank Berkshire Mortgage"":http://www.cre.db.com/about-cre/real-estate-lending-agency-multifamily (DBBM).


The full terms of the deal have not been disclosed, but the transaction is set to be completed by the end of this year. DBBM, a subsidiary of Deutsche Bank, would be renamed following closing, and as per the current definitive agreement, the collaborative acquisition would not be subject to approval procedures from Fannie Mae, Freddie Mac, or the Federal Housing Administration.

RREP's co-founder and CEO, Jon Vaccaro, commented on the deal, saying, ""The DBBM team has built a top-tier company with a solid business model and proven track record of providing needed liquidity to the multi-family housing industry. We are very pleased to partner with WL Ross, Jeff Day and the DBBM team at this important time. We expect the fundamentals of the multi-family 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.""


The transaction to purchase DBBM is the first major initiative for RREP, which functions as the commercial real estate division of Lewis Ranieri's Ranieri Partners, and though the total dollar amount of the acquisition hasn't been released, it's worth noting that a fund controlled by RREP reported $158 million in raised capital to the ""Securities and Exchange Commission"":http://www.sec.gov/ last week.

Wilbur L. Ross, Jr., the billionaire investor behind WL Ross, has yet to make a statement regarding the purchase, but the company's vice chairman, James B. Lockhart III, went on record via a press release, saying, ""We believe that multi-family is a fundamentally important and 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. We look forward to working with Ranieri Real Estate Partners to build on DBBM's strong performance.""

DBBM originated an estimated $4 billion per year in mortgage loans when the real estate market was peaking, and the entity remains the second-leading lender of multi-family mortgages backed by Fannie Mae. DBBM's business model focused on originating loans for apartment builders and subsequently selling the mortgages to the GSEs, and the interest of RREP and WL Ross is a strong nod to the growing strength of the multi-family sector.

Through the collaborative acquisition, RREP's Vaccaro will reengage with his former employer, as Vaccaro was the former head of the Berkshire group for Deutsche Bank. The Berkshire group became an official part of the bank in 2004 when the financial institution moved to purchase the group, forming DBBM.

RREP was founded in 2010 and the group targets global advisory, investment management, and capital market solutions in the commercial real estate market. New York-based WL Ross, specializes in private equity investments throughout the financial landscape.

About Author: Abby Gregory


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