JLL Acquires Oak Grove

JLL now expects to originate more than $4 billion in loans annually.

Greg O'Brien JLLChicago — JLL‘s becoming an even larger player in the multifamily finance industry with its acquisition of Oak Grove Commercial Mortgage, which does business as Oak Grove Capital. The St. Paul-based Oak Grove provides debt financing for multifamily and seniors housing, with a servicing and managing portfolio of about 1,300 loans in 46 states totaling $9.5 billion.

The deal will include $175 million payable by JLL at closing, which will be by the end of this year. According to JLL, Oak Grove Capital will use the payment to retire debt and redeem preferred investors.

Oak Grove arranges loans across the spectrum of the business for purposes as diverse as construction, acquisition, and refi through Fannie Mae DUS, Freddie Mac, Federal Housing Administration, Ginnie Mae and other funding sources.

The company produced about $1.4 billion in agency volume in 2014. By comparison, JLL produced about $775 million through its existing Freddie Mac agreement.

Oak Grove’s Fannie Mae, Freddie Mac and HUD/GNMA capabilities will thus expand JLL’s market-rate, affordable and seniors housing and healthcare financing expertise, and complement its multifamily sales and equity services. All 120 Oak Grove employees nationwide will join JLL once the transaction closes. Combined, JLL and Oak Grove will originate more than $4 billion in loans annually, and have a $14 billion loan servicing portfolio.

“The multifamily sales and financing market represents a substantive portion of all capital markets activity in the United States,” said JLL CEO, Americas Greg O’Brien. “Oak Grove is widely recognized as a leader in credit analysis, underwriting and risk management, as well as asset management and loan servicing.”