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Lend Lease completes purchase of AMRESCO mortgage holdings.

Lend Lease Real Estate Investments, Inc., the U.S. subsidiary of Lend Lease Corporation Limited, today completed the acquisition of AMRESCO, Inc.'s five commercial mortgage businesses: AMRESCO Capital Limited Partnership, Holliday Fenoglio Fowler, Real Estate Structured Finance, AMRESCO Services Limited Partnership, and Asset Management. The US$258.7 million cost to Lend Lease comprises a US$202.7 million cash payment to the sellers, US$21 million in contingent cash payments, a US$25 million holdback note to the sellers extending up to three years, and US$10 million in management incentives. The acquisition has been funded out of cash and available facilities, and is expected to be earnings accretive in year one.

With the close of the transaction, Lend Lease announced the following plans for integrating the acquired businesses:

The former AMRESCo Capital, a mortgage origination and lender representation division, becomes part of Lend Lease's debt advisory group under Ed Hurley, who headed AMRESCO Capital, and Kurt Wright, a Lend Lease principal. Lend Lease's Debt Advisory business now has a total of US$16 billion in assets under management.

AMRESCO Services has been renamed CapMark Services and becomes one of the nation's largest commercial loan servicers, with close to US$56 billion in its servicing portfolios, including Lend Lease's US$7 billion servicing portfolio. Don Skidmore, who headed AMRESCO Services, has been named head of CapMark.

Holliday Fenoglio Fowler, one of the country's largest commercial mortgage brokers, is now a wholly-owned Lend Lease subsidiary that operates independently under its existing management team. In 1999, Holliday Fenoglio completed about $12 billion in brokerage-related transactions, including arranging first lien mortgages, mezzanine capital and equity sales.

The Asset Management and Real Estate Structured Finance businesses have been absorbed into Lend Lease as separate new divisions. Asset Management, which continues to be headed by Douglas Urquhart, resolves non-performing and sub-performing loan and real estate portfolios for government agencies, institutional investors, banks, insurers and private investors. The unit also provides special servicing for CMBS issuers, and is expanding operations to Japan, Thailand, Mexico, Canada and South Korea. Rhonda Lindsey, formerly of AMRESCO, remains head of Structured Finance, which arranges high-yield debt financing for real estate ventures unable to access traditional sources.

The acquisition of the AMRESCO mortgage businesses strengthens Lend Lease's global investment management platform, which now totals US$48 billion in real estate and mortgages under management including US$35 billion in the United States. It moves the Group into leadership positions within key segments of the U.S. institutional real estate debt market, which at US$1.4 trillion is four times larger than the institutional real estate equity market. The transaction broadens Lend Lease's client base and significantly expands the company's real estate debt-related products and services in the areas of loan origination, lender representation, loan servicing and asset management/resolution.

Matthew Banks, CEO of Lend Lease Real Estate Investments/International, said, 'By combining the former AMRESCO businesses with our existing debt and equity real estate businesses, Lend Lease has created one of the most powerful and integrated real estate investment platforms in the United States. We are now positioned to deliver more diversified services to our clients, and a larger, more stable earnings stream for shareholders," he said.

As a result of the transaction, Lend Lease Real Estate Investments' U.S. employee count increases by about 840 to more than 2,000, with the former AMRESCO personnel remaining in their Dallas and Atlanta offices.

Other recent Lend Lease acquisitions include the purchase of Boston Financial Limited Partnership and the Bovis Group. These acquisitions are consistent with the Group's global real estate strategy, and are aimed at extending the Group's real estate funds under management and project management, design, and construction capabilities globally, particularly in Europe and North America.
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Title Annotation:Lend Lease Real Estate Investments Inc.
Publication:Real Estate Weekly
Article Type:Brief Article
Geographic Code:1USA
Date:Apr 5, 2000
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