Experts: Multifamily Financing Still Has Room to Run
Pricing may be getting too rich for some, but the financing folks say the multifamily market is still healthy. And Walker & Dunlop CEO Willy Walker told the more than 500 attendees of Bisnow's Annual Multifamily Conference in LA there's still room for growth.
Willy's Maryland-based firm is the the No. 1 Fannie Mae lender and No. 3 for Freddie Mac (behind Berkadia and CBRE). All told, it's the 13th-largest commercial real estate lender in the US. Willy says there hasn't been a downturn in the multifamily market for 15 years, as demand for rental housing continues to grow.
Arent Fox partner M.J. Pritchett interviewed Willy and asked about Walker & Dunlop's growth. Willy says the company was quite the contrarian during the recession, in that it began a lot of its work with Fannie and Freddie right as the agencies went into conservatorship.
There are few companies more aggressive in the market than TruAmerica Multifamily. CEO Bob Hart's firm earlier this year closed on a 14-property portfolio buy from JH Real Estate Partners consisting of 2,699 units of mostly 1980s-era product in LA, SD and the Inland Empire. The portfolio set the firm back $482M. The firm also recently continued its Pacific Northwest expansion with the purchase of its first community in Portland, OR. As of June, TruAmerica Multifamily ranked as the No. 6 apartment buyer in the US and No. 11 in the world based on transaction volume in the last year, according to Real Capital Analytics.
Also on our Multifamily Top Dealmakers Talk panel was The Bascom Group managing partner Jerry Fink; MG Properties Group CEO Mark Gleiberman; Essex Property Trust EVP John Eudy (below); Polaris Pacific partner Paul Zeger; and CBRE vice chairman Brian Eisendrath, who moderated.
Despite the bullish view on the sector, all the panelists were in the middle of the road in terms of how excited they are to buy new multifamily properties.
Our Debt Capital Markets panel was moderated by Universe Holdings CEO Henry Manoucheri, here with Capital One Multifamily Finance SVP Greg Reed; Freddie Mac Multifamily managing director Scott Croul; and Meridian Capital Group managing director Seth Grossman. They say one way to know the market is truly healthy is the CMBS volume. In 2007, CMBS issuance reached a record $230B. Last year, it was $39B.