CHARLOTTE, N.C. — Charlotte-based Grandbridge Real Estate Capital will buy Live Oak Capital, a commercial mortgage banking firm, later this month for an undisclosed price. Live Oak Capital is a mortgage loan correspondent for more than 20 institutional lenders and has closed more than $7 billion in commercial real estate capital transactions. Grandbridge has a servicing portfolio of $22.5 billion.
“These [deals] usually take anywhere from 6 months to 8 months,” says Thomas S. Dennard, CEO of Grandbridge. Because of Dennard’s business relationship with two principals from Live Oak Capital, the deal, Dennard says, “was real simple.”
With the addition of Live Oak Capital, which is based in Houston, Grandbridge will expand its reach in Texas. The company already has an office in Dallas. Suddenly able to compete for a share of the market in Houston, Dennard sees CB Richard Ellis, Holliday Fenoglio Fowler and Capmark Finance as Grandbridge’s newest competition. “We know we’re going up against some formidable competitors,” he says. But location wasn’t the deciding factor. When planning the acquisition, Dennard only looked at companies that could bring in fee income. “We’re very biased toward companies that can generate servicing revenues for us,” he says.
While talks of the purchase started when the economy was still relatively stable, the deal was not affected by the economic downturn. Dennard hedged his bets and predicted a downslide in the market. “We anticipated a further deterioration of the marketplace and priced it accordingly,” he says. “We’re in as good a shape as you can be in this environment.”