Breaking News: Capital One Buys Beech Street Capital

Capital One Financial has opted to expand its multi-family banking business by acquiring one of the country’s largest issuer of Fannie Mae, Freddie Mac and FHA multi-family loans–Beech Street Capital. The acquisition, announced on Friday, is expected to close in the fourth quarter of 2013, pending approval by Fannie or Freddie. Terms of the transaction were not disclosed.

Capital One Financial has opted to expand its multi-family banking business by acquiring one of the country’s largest issuer of Fannie Mae, Freddie Mac and FHA multi-family loans–Beech Street Capital.

The acquisition, announced on Friday, is expected to close in the fourth quarter of 2013, pending approval by Fannie or Freddie. Terms of the transaction were not disclosed.

“The combination of Capital One’s multi-family business and Beech Street will make us a top national multi-family business and Beech Street will make us a top 5 national multi-family originator and one of the few institutions in the U.S. capable of offering clients a one-stop banking solution encompassing a full range of banking services,” said Michael Slocum, president of Capital One’s Commercial Banking Group, in the news release.

Grace Huebscher, a 14-year veteran of Fannie Mae, founded Beech Street in 2009. The company originated about $4 billion in loans in 2012, making it the sixth largest agency originator in the country. Beech Street services a loan portfolio of about $10 billion.

“We share Capital One’s vision of bringing together two complementary and high-performing teams to boost our position in the multi-family space,” said Huebscher in a prepared statement.

Earlier this year, in an interview with CPE, Huebscher said she wants to expand Beech Street’s product offerings to include alternative executions such as CMBS, B-notes and bridge financing.

“I think it’s going to continue to be a robust market, but there’s going to be a lot more competition, so that’s going to potentially impact many of us players,” she told CPE.

Headquartered in Bethesda, Maryland, Beech Street has 10 offices nationwide. Combined, the two companies will have portfolio loan servicing and origination capabilities nationally, according to the release.

“We have great respect for the experience, leadership, and unique expertise Beech Street founder & CEO Grace Huebscher and her exceptional management team bring to Capital One,” said Rick Lyon, head of Commercial Real Estate Banking, Capital One. “We believe the market will see significant benefits from this powerful combination of industry-leading expertise, greater resources and expanded capabilities.”