Sept. 3 (Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. and Leucadia National Corp. committed to spend as much as $490 million on real estate-related assets from Capmark Financial Group Inc. as the lender weighs a bankruptcy filing.

Capmark, owned by firms including KKR & Co. and Goldman Sachs Group Inc., paid $40 million for the option to sell its loan-servicing and mortgage business to the partnership of Berkshire and Leucadia, the Horsham, Pennsylvania-based lender said yesterday. Capmark reported a $1.6 billion second-quarter loss and said the Federal Deposit Insurance Corp. intends to order the company to bolster capital and liquidity.

Buffett is using the cash hoard he built in the real estate boom for Omaha, Nebraska-based Berkshire to pick up assets from companies hobbled by the property market’s decline. Last year, he agreed to buy a portfolio of loans backing factory-built homes from CIT Group Inc., the 101-year-old bank that also may file for bankruptcy.

“He clearly is the banker of last resort, and it appears that last resort now means collapse,” said Michael Yoshikami, chief investment strategist at YCMNet Advisors, which manages about $850 million including Berkshire shares. “There’s certainly the possibility that somebody else is going to come in. But with everyone’s capital levels stretched, there’s not a lot of companies that can.”

Goldman, Wells Fargo

Berkshire’s cash pile declined 21 percent to $24.5 billion in the 12 months ended June 30 as Buffett boosted holdings in companies hurt by the economic crisis. He agreed in 2008 to spend $5 billion buying preferred shares in New York-based Goldman Sachs, and this year added to stakes in Wells Fargo & Co. and U.S. Bancorp.

Capmark is one of the largest U.S. commercial real estate finance companies, with more than $10 billion in originations, according to Moody’s Investors Service. The company services more than $360 billion of debt.

Capmark’s mortgage assets have been deteriorating since mid-2007, Moody’s said in a May 5 report, as the economy entered the longest recession since the 1930s. Provisions against bad loans contributed to the second-quarter deficit.

The lender’s $1.2 billion of 5.875 percent bonds due in 2012 rose 0.75 cent to 19.75 cents on the dollar to yield 94.6 percent as of 2:44 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The bonds fell from 34.5 cents since the start of 2009, Trace data shows.

Floating-Rate Notes

Capmark’s $637.5 million of floating-rate notes due in 2010 rose 2.25 cents to 23.25 cents on the dollar as of 2:48 p.m., Trace data shows.

Laura Ulbrandt, a spokeswoman at New York-based Leucadia, and Capmark’s Joyce Patterson didn’t return calls. Buffett didn’t respond to a request for comment left with an assistant.

The default rate on commercial mortgages held by U.S. banks more than doubled in the second quarter from a year earlier amid falling rents and occupancies for malls, office buildings and warehouses. Loans that were 90 days or more past due climbed to 2.88 percent of outstanding balances in the second quarter, from 1.18 percent a year earlier, according to New York-based property research firm Real Estate Econometrics LLC.

“The market’s down, it’s time to buy,” said Gerald Martin, a finance professor at American University’s Kogod School of Business in Washington who has studied Buffett.

$415 Million in Cash

The Berkshire and Leucadia joint venture, Berkadia III, will pay $415 million in cash for the mortgage business if Capmark enters bankruptcy. The venture would also pay $75 million in the form of a note that can be reduced depending on losses in Capmark’s portfolio financing multifamily apartments backed by Fannie Mae.

Outside of bankruptcy, Berkadia III will pay $375 million in cash and the $75 million note. The buyers will also provide a $40 million “holdback” they’ll retain to cover indemnity claims.

Berkshire and Leucadia teamed up at least once before, in their 2001 deal to extend a $6 billion loan to Finova Group Inc., a Scottsdale, Arizona-based lender. Berkshire and Leucadia still owned half of the equity of Finova as of June 30, according to a regulatory filing.

Berkshire slipped $350 to $97,850 at 4:15 p.m. in New York Stock Exchange composite trading. Leucadia declined 1 cent to $23.45.

Capmark had been a unit of GMAC LLC, the Detroit-based auto and home lender, until 2006 when an investment group including Goldman Sachs Capital Partners and KKR acquired a controlling stake, according to a GMAC filing. As of March 31, investors owned about 75.4 percent of Capmark, GMAC had 21.3 percent and employees, former employees and directors held about 3.3 percent, the filing said.

KKR, GMAC

KKR, the New York-based private-equity firm run by Henry Kravis and George Roberts, wrote its investment in Capmark down to zero as of March 31, according to data from its publicly traded investment vehicle.

Andrea Raphael, a spokeswoman for Goldman Sachs, declined to comment on whether the company lost money on Capmark. GMAC spokeswoman Gina Proia confirmed the contents of a May filing that said the firm doesn’t have any financial obligation or exposure to Capmark.

Capmark was assisted on the deal by Beekman Advisors, Lazard Ltd. and Mohsin Meghji, a principal at New York-based restructuring firm Loughlin Meghji & Co. Meghji is chief restructuring officer.

To contact the reporters on this story: Andrew Frye in New York at afrye@bloomberg.net; Pierre Paulden in New York at ppaulden@bloomberg.net

Last Updated: September 3, 2009 18:03 EDT