Berkadia has acquired a 50% ownership interest in Riverside Capital, a full-service low-income housing tax credit (LIHTC) investment company.

Part of The Michaels Organization, Riverside Capital has guided the financing and syndication for more than 7,500 affordable units across the country, representing $900 million of equity capital.

“This acquisition gives Berkadia the opportunity to expand our presence in the affordable housing space by enabling access to a deep network of developers and investor relationships,” said Berkadia CEO Justin Wheeler. “Riverside’s reputation as an established tax credit syndication platform, with its proven track record of providing capital solutions to the affordable housing industry’s leading development companies, appealed to our desire to grow within this increasingly important asset class.”

The acquisition creates a joint venture between Berkadia and New Jersey–based The Michaels Organization, the nation’s largest privately held owner and developer of affordable housing. Riverside, which is national in scope, has provided tax credit syndication services for affordable housing developments across the country, including for Michaels.

Steve Ervin
Jeffrey H Mantler & Larmon Studios Steve Ervin

Several other LIHTC syndicators have recently changed ownership. In 2017, the Hunt Cos. agreed to acquire Alden Capital Partners, now Hunt Capital Partners, a syndication business that it had operated previously. In 2016, Omni Holding Co. acquired City Real Estate Advisors, now known as CREA; Regions Bank acquired First Sterling Financial; and ORIX Corp. bought Boston Financial Investment Management.

“We are proud to partner with Berkadia, one of the multifamily housing industry’s most respected and successful full-service mortgage banking, loan servicing, and investment sales firms,” said John J. O’Donnell, president of The Michaels Organization. “This partnership propels Riverside into a position ripe for growth as an industry-leading capital provider and tax credit syndicator for much-needed affordable housing.”

“The partnership allows us to expand Riverside Capital’s capacity while continuing to offer our clients best-in-class opportunities and services,” added Sebastian Corradino, president of Riverside Capital. During Corradino’s tenure with Riverside, the firm more than doubled its volume and expanded its originating, underwriting, and asset management teams.

Berkadia has named Steve Ervin as the head of its affordable housing group. He will lead the coordination of Berkadia’s affordable debt products including Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development (HUD).

During his time at Berkadia, Ervin launched the seniors housing and health-care group and is the head of Berkadia’s HUD production team, which was ranked No. 1 for volume in fiscal 2017. He will draw upon that experience to manage Berkadia’s expansion in the affordable housing industry.

In 2017, Berkadia’s loan origination volume surpassed $24 billion while its investment sales platform totaled nearly $8 billion. The company is a joint venture of Berkshire Hathaway and Leucadia National Corp.