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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.

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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.

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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.

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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.

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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.

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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.

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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.