Berkshire buys the rest of MF1 as Limekiln exits

The eight-year joint venture behind MF1 is over, and New York's Limekiln is selling its 50% stake in the multifamily lender to its joint-venture partner, Boston-based Berkshire Residential Investments, leaving Berkshire as sole owner. Bloomberg first reported the sale; Bisnow carried it.

No price appears in the coverage, but the direction is clear: one partner is walking out of a business the two of them scaled together, and the other, already holding half the downside of whatever the book is worth, is buying the rest. Bisnow's headline attributes the purchase to Berkshire Hathaway; its copy, and the deal it describes, name Berkshire Residential Investments, the Boston investment firm.

The lender being consolidated has scale and a scar: over the joint venture's life MF1 originated about $32 billion of apartment loans and, per Berkshire's statement, stood among the sector's leading issuers of collateralized loan obligations. The vast majority of that production was floating-rate bridge debt, and several of the originations went to borrowers who later ran into trouble.

The clearest was Tides Equities, a Los Angeles multifamily syndicator to which MF1 was a favored lender, whose floating-rate loans came under pressure as rates rose in early 2023. After Tides failed to make interest payments, at least $425 million of MF1-issued loans in its portfolio landed on servicer watchlists, The Real Deal reported that August; MF1 had almost $11 billion of loans outstanding then, and close to half its deals were watchlisted or delinquent.

By the first quarter of 2025 the picture had still not cleared: MF1 executed $5.6 billion of CLO volume across six transactions, Commercial Observer reported, at a time when 69% of the loans on its books sat on the special servicer's watchlist against a 13.7% overall distress rate. Only 23.4% of the portfolio had been modified, a figure CO flagged as a risk to watch rather than a cleanup completed.

Around that period MF1 pushed into fixed-rate lending, and it has since closed its first fixed-rate CMBS transaction, a $734 million deal per CoStar News — a pivot Waynebern explained to Commercial Observer in deliberate terms: "We anticipated this year a shape of the curve where people would want fixed rate, and that hasn't been the case. At some point, rates in the curve will move to where people want fixed rate, and we want to be prepared for that."

Preparedness cuts both ways in the sale itself: Berkshire's statement has Waynebern keeping his chief executive title while he builds a new real estate strategy outside multifamily credit, which suggests he expects the better risk-adjusted opportunities to sit somewhere other than the bridge business his firm spent eight years financing.

He is leaving against a souring tape: last month multifamily was flagged as a growing source of CMBS distress, its balance-weighted distress rate more than doubling in five months from 6% in February to 13% in July, according to Cred iQ data reviewed by GlobeSt.

What Berkshire is buying is not the loans. That origination record, built mostly on floating-rate bridge debt, is a liability in a market where the apartment distress rate has doubled and borrowers are still missing payments, and a modification rate of 23.4% says most of the workout lies ahead rather than behind. Floating-rate books surface their trouble on servicer watchlists before that trouble reaches a lender's earnings, which is why the numbers reported on MF1 read as a portfolio still in negotiation rather than one written down. The refinancing wall, as this publication has argued, generally resolves through structured extension and watchlist management rather than distress sales, with the loss deferred — and MF1's book is that story at the corporate level.

The value is in the machine — an originator that can feed a CLO conduit and now a fixed-rate CMBS shelf. Buying out a co-owned lender is a purchase of operations and distribution; a 50/50 structure exists so that two sponsors can share the balance-sheet risk of originating into one. Collapsing to single ownership concentrates the franchise and the residual liability in the same hands, which makes this a wager on the second half of the cycle rather than a fee. Berkshire's stated rationale is the platform; the legacy book is the discount that came with it.

Whether that works is a timing call, and the two sides are clear: Morgan Stanley's conclusion that the four-year CRE repricing is finished and a new cycle has opened hands Berkshire the bull case for buying now, while the bear case is Waynebern's own observation that the curve has not yet moved to where borrowers want fixed-rate paper, leaving the platform dependent on a product the market has not asked for at scale. Berkshire is taking the whole of a lender whose past explains the price and whose future rests on that pivot landing.

The evidence to watch is composition: if MF1's next quarter still looks like the six-transaction, $5.6 billion CLO run of 2025 — watchlist-heavy and bridge-fed — then little has changed but the owner's name. If it looks like the $734 million fixed-rate CMBS deal repeated, the pivot Waynebern pre-positioned for has arrived, and Berkshire will have bought the platform just as its product finally sells.