News
January 26, 2005
BALTIMORE--Jan. 27, 2005--Municipal Mortgage & Equity, LLC (NYSE:MMA), known as MuniMae, announced today that it has entered into a definitive agreement to acquire MONY Realty Capital, Inc. ("MRC") from AXA Financial, Inc. AXA Financial acquired MRC's parent, The MONY Group Inc., in July of 2004.
MRC, which has over $2 billion in assets under management, consists of a regional network of approximately 35 professionals who source, underwrite, structure, close and manage commercial real estate investments. Since 1997, MRC (and its predecessor organization) has originated approximately $3.2 billion in commercial debt investments, including $1.2 billion in high yield or structured transactions (including construction loans, bridge loans, mezzanine investments and B-notes).
"The strategic importance of this acquisition is quite significant. It immediately increases our assets under management by more than 20%, jump-starts the growth of our investment advisory business, and expands our platform beyond multifamily housing. It allows us to provide existing products to new customers and new products to existing customers," said MuniMae CEO and President, Michael Falcone. "While small in terms of dollars, this acquisition provides us with an opportunity to build upon some very strong investor relationships, particularly in the financial institution and institutional investor segments."
Mr. Falcone added: "The management team of MRC has over 100 years of combined experience working together at MRC and its predecessor organization. That continuity is one of the contributors to the team's focused, disciplined approach to real estate investment management. The senior managers at MRC have been through every phase of a real estate cycle, including the expansion and overbuilding phases in the late 1980s, the recession in the early 1990s, the recovery in the mid-90s, the expansion in the late-90s, and the recent downturn. The knowledge and perspective gained from this experience benefits every investment decision."
Additional Transaction Information
Following the closing of the transaction MRC will operate under the name MMA Realty Capital, Inc. Essentially the entire team of MRC (including the regional office network) will remain intact and will continue under the leadership of Thomas McCahill, who will be joining MuniMae's senior management committee. Richard Katzenstein and James Mazzarelli, working with Tom and other members of senior management, will continue to lead the Commingled Fund segment of the business.
MRC will continue to manage $1.9 billion in real estate investments on behalf of MONY Life Insurance Company and MONY Life Insurance Company of America , as well as MRC's two proprietary mezzanine funds, its B-Note Value Added Fund, and other selected third party accounts. MRC is expected to grow as it expands upon its successful third party investment management business, which is one of the key drivers in the transaction with MuniMae.
Thomas McCahill, MRC's President and CEO, stated: "MRC and MuniMae are a terrific marriage given our collective desire to accelerate the growth of our investment advisory business. Working together as MMA Realty Capital, we can offer our capital clients more investment options with strategies that are complementary to our existing offerings."
The completion of MuniMae's acquisition of MRC is subject to certain conditions, including the consent of various third parties.
About Municipal Mortgage & Equity
MuniMae and its subsidiaries originate, service and asset manage investments in multifamily debt and equity for its own account and on behalf of others. MuniMae conducts these operations through its subsidiary, MMA Financial, LLC. As of September 30, 2004 , assets under management totaled $9.3 billion secured by 2,217 properties containing 249,850 units in 49 states, the District of Columbia , Puerto Rico and the U.S. Virgin Islands. For its proprietary accounts, MuniMae primarily holds tax-exempt multifamily housing bonds. This on-balance sheet portfolio is secured by 177 properties containing 37,581 units in 27 states. For a portion of these investments, MuniMae participates in the performance of the underlying properties.
MuniMae is organized as a limited liability company. This structure allows MuniMae to combine the limited liability, governance and management characteristics of a corporation with the pass-through income features of a partnership. As a result, the tax-exempt income derived from certain investments remains tax-exempt when passed through to shareholders. Distributions to shareholders are normally declared quarterly and paid in February, May, August and November.
This press release contains statements that are forward-looking in nature and reflect management's current views with respect to future events and financial performance. These statements are subject to many uncertainties and risks and should not be considered guarantees of future performance. Actual results may vary materially from projected results based on a number of factors, including the actual performance of the properties pledged as collateral for the portfolio, general conditions in the local real estate markets in which the properties are located and prevailing interest rates. This press release does not constitute an offer to sell any securities of Municipal Mortgage & Equity, LLC or any of its affiliates.
Preceding press release obtained from Municipal Mortgage & Equity, LLC at www.mmafin.com. Berkshire Capital has reprinted this press release substantially in its entirety.
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