Capital One Eyes CRE Expansion with Beech Street

McLEAN, VA-The multifamily finance market shifted on Friday with the announcement by Capital One that it was acquiring multifamily originator Beech Street Capital. The combined entity, when the deal is finalized in the fourth quarter of 2013, will result in the fifth largest national multifamily loan originators. From there, the company has nowhere to go up but up in this particular asset class, Rick Lyon, Head of Commercial Real Estate Banking, Capital One, tells GlobeSt.com. In short this is not an economies of scale play or a deal forged to gain operational efficiencies, he says. “For us, this is all about growth.”

Indeed, Capital One and Beech Street’s respective strengths are highly complementary, Beech Street founder and CEO Grace Huebscher notes. The most obvious gap Beech Street fills for Capital One, of course, is its extensive GSE and FHA lending operations. Their other product lines and geographical footprints match up well too in the commercial real estate space. “Capital One has quite a few balance sheet products — long term and construction finance for example. Those products will be available for Beech Street customers, while our GSE and FHA platform will be made available to Beech Street customers.”