Pillar Financial to Acquire Cohen Financial by Year-End

By Scott Baltic, Contributing Editor

Jack Cohen

In a deal that’s expected to close by year’s end, longstanding real estate capital services firm Cohen Financial will become part of Pillar Financial, an affiliate of Guggenheim Partners, Guggenheim announced Friday. Financial terms of the acquisition were not disclosed.

Chicago-based Cohen has long provided national capital services for commercial real estate transactions, as well as originating debt and equity and serving as a primary and special loan servicer. Its servicing and brokerage units will continue to operate under the Cohen Financial name, led by CEO Jack Cohen. The company also provides construction loan administration, asset management, and capital advisory and valuation services.

Founded in 1978, Cohen Financial has offices in nine cities in addition to Chicago: San Francisco, Los Angeles; Irvine, Calif.; Portland, Ore.; Phoenix; Dallas; Miami; Kansas City, Kan.; and Grand Rapids, Mich. Personnel include about two dozen professional originators and 50 other individuals.

“We are excited about adding Cohen Financial to the Pillar Financial franchise, because it quadruples our origination footprint and significantly increases our servicing portfolio, which, post closing, will exceed $20 billion of UPB,” Robert Brennan, senior managing director of Guggenheim Commercial Real Estate Finance, said in a release.

Of that $20 billion in unpaid principal balance, $6.6 billion is Cohen Financial’s, a Pillar spokesperson told Commercial Property Executive.

After the transaction closes, Cohen Financial’s owners, including Mariner Real Estate Management, of Leawood, Kan., and Cohen senior management, will hold “a significant ownership interest in the combined business,” according to the Pillar release. No effect is expected on either Cohen’s or Pillar’s day-to-day operations.

The transaction will enable Pillar Financial, an originator of multi-family and commercial loan products, to expand its product offerings, geographic footprint, borrower access, and servicing and asset management capabilities.

“The combination will diversify our sources of revenue and will increase production of Fannie Mae and FHA loans at Pillar,” Anand Gajjar, CEO of Pillar Financial, said in the release.

(A new report from Real Capital Analytics states that multi-family property sales continue to rise on a year-over-year basis, driven overwhelmingly by portfolio transactions. End-of-year sales volume is expected to top 2012 by 15 percent or more.)

Pillar Financial, founded in June 2010, specializes in financing solutions for multi-family and healthcare properties and is a national Fannie Mae Delegated Underwriter and Servicing (DUS) lender, a MAP-approved FHA lender and an approved Ginnie Mae Multifamily issuer specializing in construction and permanent multi-family and healthcare debt financings. The company also offers financing solutions for market-rate and affordable multi-family mortgages, student housing, seniors housing, manufactured housing and credit facilities.

It currently has offices in New York; Vienna, Va.; Atlanta; Boca Raton, Fla.; Chicago; Detroit; San Francisco; Dallas; Bethesda, Md.; and Seattle.