MULTIFAMILY FINANCE STATUS (QUO)

At a Young Mortgage Bankers Association lunch at the Union League Club last week, Beech Street NY head Mike Edelman, with Investors Savings Bank's Joseph Orefice, said the GSEs are going to stay as they are for at least three to five years. Privatization orpublic/private partnerships make the most sense, and that, of course, is why those solutions will never pass Congress (wink wink, nudge nudge), he says.
Massey Knakal's Bob Knakal (right) with M&T Bank's Peter D'Arcysays that when people look at 1984's 12% cap rate, they must think investors were raking in the dough. Not so with a 13.4% mortgage rate back then, too, he says. Though not at 12% now, cap rates are higher than the '07 peak, and of course interest rates are much lower. Stonehenge Partners managing director Ofer Yardeni, whose firm owns 3.5M SF of apartments in NYC and plans to close $250M more deals by year's end, says the cap rate is just a statistic, and that it varies, from 1% at Stuy Town to 5% elsewhere. He looks at price/SFcompared to replacement cost, and that's that.

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