Brookfield buys GMAC real estate unit

Toronto based Brookfield Asset Management is purchasing GMAC’s its home services unit which includes real its estate brokerage. The transaction, which will stretch Brookfield’s Residential Property Services unit into the United States, will most likely be completed in the fourth quarter this year, Brookfield said. Terms were not disclosed.

GMAC is trimming mortgage operations after seven consecutive losing quarters at its Residential Capital business. This month, the company dismissed 5,000 Residential Capital employees, or 60 percent of the unit’s staff, and closed all 200 GMAC Mortgage retail offices because of weak real estate markets.

Moody’s Investors Service downgraded Residential Capital’s debt on Sept. 10, citing mounting losses, cash strains and “an impaired franchise.”

These are “pretty tumultuous times for the real estate industry,” said Graham Badun, managing partner and chief executive of Brookfield Residential Property Services, formed in the GMAC deal. “We do believe in the long-term positioning of residential real estate.”

GMAC, co-owned by General Motors and Cerberus Capital Management, renewed a credit facility with Citigroup last week, giving the lender access to $13.8 billion, down from $21.4 billion a year earlier. The company, which is based in Detroit, has amassed $5.4 billion in losses in the last year as the mortgage market crumbled and home foreclosures rose to a record.

Brookfield, based in Toronto, manages more than $95 billion in assets including the Royal LePage real estate brokerage brand and franchise.