Friday, October 10, 2014

Ranieri Group Puts Situs Holdings Up for Sale


Following persistent rumors that it was in play, Situs Holdings has hired investment bank Raymond James to find a buyer.

Situs will entertain bids for either the whole company or a partial interest, according to people familiar with the matter. Market pros estimate the real estate-services shop is worth $150 million to $200 million.

Situs is owned by Ranieri Partners of Uniondale, N.Y., Brookfield Investment Management of New York, South Carolina Retirement and members of its own management team. After fielding multiple unsolicited offers, the company’s board of directors recently voted to formally seek bids, the sources said.

Houston-based Situs, which was founded in 1988, has an array of business lines, including due diligence, loan underwriting, primary servicing, special servicing and real estate advisory services. It also operates a big outsourcing business, which is the dominant supplier of contract workers to commercial MBS lending shops.

The list of prospective buyers could be long and diverse. Logical candidates include competitors in the due-diligence and special-servicing arenas, as well as broader-based real estate companies looking to add compatible operations. Several companies are seeking to build out full-service national commercial real estate brokerages, including a TPG partnership that has agreed to buy brokerages DTZ and Cassidy & Turley.

Situs could also appeal to firms looking to increase their presence in Europe. The company lays claim to being one of Europe’s largest third-party loan servicers and one of only a few firms that manage loan portfolios in both the U.S. and Europe.

Situs has also been expanding beyond the commercial mortgage sector. In August, the Federal Reserve tapped the firm to conduct a portion of its annual comprehensive capital analysis and review, an exercise to determine whether the largest U.S. bank holding companies have sufficient capital. Situs was awarded a contract to review nearly 7,000 of residential loans totaling $5 billion.

Rumors that Situs would be sold have circulated for more than a year. The speculation, denied by the company, was fueled in part by the fact that Ranieri Partners sold two other pieces of its platform this year: agency lender Berkeley Point Capital and distressed-asset investor RREP Recovery Partners. Cantor Commercial Real Estate acquired Berkeley Point, and affiliate Cantor Fitzgerald purchased RREP.

Ranieri Partners, headed by securitization pioneer Lewis Ranieri, began amassing a commercial real estate advisory, servicing and origination platform several years ago, teaming up with private equity partners. Ranieri gained control of Situs in 2011 and merged it with Helios AMC, a special-servicing firm in which Ranieri owned a stake. The merged company retained the Situs name. In 2012, Ranieri teamed up with billionaire

Wilbur Ross to buy Berkeley Point from Deutsche Bank, which operated the multi-family lender under the name Berkshire Mortgage. Ranieri also operates a registered broker-dealer, Ranieri Real Estate Advisors, which places debt and equity, and advises commercial real estate firms.

Many market pros think that Ranieri and its partners are simply ready to take profits after a big run-up in valuations for real estate companies that provide fee-based services. A spokesperson for Ranieri Partners didn’t return a call seeking comment. 

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