TOKYO -- Japanese financial services group Orix will acquire New York-based real estate lender Hunt Real Estate Capital under an agreement announced Monday, betting on a construction boom in multifamily housing as American homeownership declines.
The acquisition, estimated at hundreds of millions of dollars and expected to close as early as December, will make the target a wholly owned subsidiary.
Founded in 1972, Hunt Real Estate Capital lends money to developers, largely for multifamily housing projects. It sells loan claims to such entities as the Federal Home Loan Mortgage Corp., or Freddie Mac. It also manages and collects on loans.
Orix real estate financing arm Orix Real Estate Capital Holdings was created through this year's merger of American units Red Capital Group and Lancaster Pollard, acquired in 2010 and 2017. Orix Real Estate Capital offers loans insured by the U.S. Federal Housing Administration and can sell loans to the Federal National Mortgage Association, or Fannie Mae.
Taking over Hunt Real Estate Capital will give the Orix group a broader range of options for buyers.
Multifamily housing is booming in the U.S., with loans for such projects more than sextupling in 10 years. The Orix group's loan claims involving the FHA and government-sponsored enterprises are expected to come to about $8 billion a year after the acquisition, lifting the Japanese group into the top 10 in the market.