Armada Analytics, a commercial real estate underwriting and asset management services provider, acquired Anabranch Flood, a provider of flood risk assessment services.

Terms of the transaction, which closed last week, were not disclosed.

Anabranch provides manual flood zone determinations and life-of-loan tracking services that lenders are particularly focused on in the wake of Hurricane Harvey.

Anabranch also will provide letter of map amendment services, including LOMAs that it can deliver electronically, but it will not solely rely on automated flood determination services, said Armada Analytics executive vice president Russ Ming.

Lenders have and will again likely find themselves exposed to losses if they rely too much on automation rather than more accurate manual flood determinations, he said.

"Flood certifications have become automated and can be inaccurate," said Ming. "A lot of [lenders] got burned because the information was not accurate."

Russ Ming, executive vice president and COO of Armada Analytics
Russ Ming, executive vice president and COO of Armada Analytics

Even if a determination is accurate, a lender may find themselves with damaged properties that are not insured if an area that is not in a flood zone suffers damage, but accurate determinations ensure that at least flood-zone properties are protected.

The company's first expansion into a residential, single-family mortgage business line will help the company grow and diversify, Ming said.

"Adding flood-risk services is another opportunity to streamline and improve the due diligence required to finance real estate in today's flood risk-focused environment," Ming said in a press release. "It also furthers one of Armada's goals of expanding its service offerings and expertise available to the residential market, while adding value to our commercial customers."

The founder and president of the Denver-based Anabranch Flood, Reid Rechel, will lead Armada's flood risk services department as vice president of environmental risk at Armada.

Armada is rebranding Anabranch but is retaining its office space and staff, said Ming.

Armada also plans to expand Anabranch's business. The company will be looking to hire manual flood risk researchers in its Denver, Dallas or Greenville, S.C. offices, Ming said.

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