ORIX USA has acquired Lancaster Pollard Holdings, its third firm working in the affordable housing sector.

After signing a definitive agreement to acquire Lancaster Pollard on June 9, ORIX completed the transaction Tuesday, announced company leaders today. Details of the deal were not released.

Andrew Garvey
Andrew Garvey

Based in Columbus, Ohio, Lancaster Pollard is a provider of integrated investment banking, mortgage banking, balance-sheet lending, and private equity services focused on the full continuum of senior living and health-care clients. It is also a leading Federal Housing Administration (FHA)/Department of Housing and Urban Development lender.

“The acquisition of Lancaster Pollard is a natural extension of ORIX’s successful strategy of acquiring leaders in affordable, seniors, and health-care housing finance, as evidenced by our previous acquisitions of RED Capital Group and Boston Financial Investment Management,” said Hideto Nishitani, ORIX USA’s chairman, president, and CEO, in a statement. “Having these three companies under the ORIX umbrella extends our ability to improve the quality of life in our communities through investments in seniors housing and health care.”

All three ORIX subsidiaries will continue to operate as separate companies with their current management. Andrew Garvey, senior managing director and head of ORIX Commercial Mortgage Servicing, will have overall responsibility across the three businesses.

Moving forward under the ORIX Commercial Mortgage Servicing umbrella, Lancaster Pollard will focus on the financial, capital, and advisory needs of senior-living and health-care clients, and RED will do the same in the affordable and market-rate multifamily housing sectors. Boston Financial will continue to provide tax credit equity and related development capital to all three housing sectors.

Nick Gesue
Nick Gesue

Lancaster Pollard has about 150 employees

With ORIX having both RED Capital and Lancaster Pollard, the expectation is that the affordable housing businesses of the companies will be brought together under the larger RED Capital platform.

“Our hope is that, looking at it from the ORIX perspective, you will see a greater ability to penetrate and serve the affordable housing space by combining those efforts and coordinating them in a singular way opposed to having two teams that could be overlapping in covering the same markets or competing against one another,” said Gesue.

The acquisitions of the three firms creates an opportunity to further serve the affordable housing and other sectors, he said.

ORIX USA, a division of leading international financial services group ORIX Corp., bought an 88% stake in RED Capital in May 2010, making it the foundation of ORIX Commercial Mortgage Servicing. Last year, ORIX purchased the remaining 12% interest in the company. RED Capital has provided over $75 billion of integrated debt and equity capital since 1990. It is a Fannie Mae DUS®, a Freddie Mac small-balance, and an FHA Multifamily Accelerated Processing lender, with a combined mortgage servicing portfolio exceeding $16 billion.

In July 2016, ORIX acquired Boston Financial, a leading low-income housing tax credit syndicator. Since its inception, Boston Financial has raised over $11 billion of low-income housing and historic tax credit equity, and acquired over 2,400 properties.

Advisers for ORIX USA on the transaction included Beekman Advisors and Houlihan Lokey for financial and Weil, Gotshal & Manges for legal. For Lancaster Pollard, Credit Suisse Securities (USA) served as financial adviser and Kramer Levin Naftalis & Frankel as legal adviser.