Enterprise, Bellwether Merge Operations

By Gail Kalinoski, Contributing Editor

Giving both parties the ability to expand their geographic reach and product offerings, Enterprise Community Investment Inc. and Bellwether Real Estate Capital L.L.C. have merged Enterprise’s multi-family mortgage finance group and Bellwether. The new company, Bellwether Enterprise Real Estate Capital L.L.C., could produce $1.5 billion in mortgages this year and eventually more than $3 billion a year.

Bellwether Enterprise will be located in Cleveland, where Bellwether has had its headquarters. The company will have originators in 13 cities and consist of approximately 90 employees with about 60 of them coming from Bellwether. Lamar Seats, previously senior vice president of Enterprise’s multi-family mortgage finance business, is now CEO of Bellwether Enterprise. He will continue to work from Columbia, Md., where Enterprise is based. Ned Huffman, a Bellwether principal & executive managing director, will serve as president of Bellwether Enterprise and Debbie Rogan, also a Bellwether principal & executive managing director, will become executive vice president of the combined company.

Both companies are privately held, so no financial details about the merger were disclosed. It should close within 45 days, according to Huffman. He told Commercial Property Executive that Enterprise, which was being advised by Beekman Advisors Inc., reached out to Bellwether about eight months ago. Even though Bellwether wasn’t looking for a merger partner, Huffman said, “There were lots of reasons why this was very interesting to us.”

“They focus on affordable and workforce housing,” Huffman noted. “Our focus is more on market-driven properties and commercial real estate.”

Huffman said the merger benefits both companies because Enterprise was “interested in trying to diversify and expand into other markets and we will maintain and have a stronger balance sheet and capital to go out and build more of a national platform.”

Bellwether, formed in 2008 as a full-service commercial mortgage banking operation, had a portfolio worth more than $4.5 billion and offices primarily in the Midwest. It provided loan products placed through various institutional investors, including life insurance companies, pension funds, banks and government agencies. Huffman said its portfolio consisted of mostly multifamily, about 30 percent retail, followed by industrial and office.

Enterprise’s multi-family mortgage finance group was a for-profit subsidiary of Enterprise Community Partners that was founded 30 years ago as a non-profit to increase access to affordable housing across the United States. It has provided construction and permanent financing for affordable and market-rate multifamily housing and healthcare facilities through a range of financial products. Enterprise is an approved Fannie Mae, Freddie Mac and Federal Housing Administration lender. Bellwether had only been approved as a Freddie Mac Multifamily Program Plus seller and servicer.

“It’s a very unique situation. We will have almost all the product types available to our customers now,” Huffman said.

Huffman said the merger comes at a good time as the capital markets have improved and multi-family housing has become even more popular for both renters and investors.

“There’s a tremendous opportunity for growth,” he said. “We wanted to make sure we were in a position to expand and grow nationally.”