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How Well Do You Know The D.C. Multifamily Lending Landscape?

Washington DC Capital Markets
Washington DC Capital Markets
December 13, 2017 JPMorgan Chase Lindsey Benfield, Bisnow

Washington, D.C., commercial real estate has seen consistent growth and development over the last three years. The metro area boasts one of the lowest unemployment rates in the U.S., and has become a hub for tech firms and the professionals they attract. D.C.’s growth has impacted multifamily investment, as owners look to acquire more properties and look to refinance their current portfolios.

To help them in the financing process, owners have turned to JPMorgan Chase Commercial Term Lending for its simple process and certainty of execution.

Think you know the D.C. multifamily lending landscape? Take this quiz from JPMorgan Chase Commercial Term Lending Head of the Northeast Kurt Stuart, Client Manager Greg Werly and Regional Sales Manager Will Oehler about why they see D.C. as one of JPMorgan Chase’s strategic growth markets for multifamily lending.

1

Which of the following was a notable D.C. multifamily transaction this year?

Monogram Residential Trust’s purchase of Latitude
Fairfield Residential’s purchase of Placentia Place
Blackstone’s purchase of Emory Point
MG Properties’ purchase of Alexan Melrose

YOU'RE CORRECT!

Monogram Residential Trust acquired the 265-unit Latitude in May for $143M. The Class-A multifamily complex, consisting of two 12-story buildings with 3,115 SF of ground-floor retail, came online in Q4 2016.

The large purchase goes against a noted slowdown in sales activity in the D.C. market. According to an Avison Young report, Washington, D.C. multifamily dropped 29% in sales volume. The Chase commercial term lending team has seen this as an opportunity to help clients refinance their existing properties. The commercial term lending team gives borrowers a hassle-free way to plan for the future.

YOU'RE WRONG!

Monogram Residential Trust acquired the 265-unit Latitude in May for $143M. The Class-A multifamily complex, consisting of two 12-story buildings with 3,115 SF of ground-floor retail, came online in Q4 2016.

The large purchase goes against a noted slowdown in sales activity in the D.C. market. According to an Avison Young report, Washington, D.C. multifamily dropped 29% in sales volume. The Chase commercial term lending team has seen this as an opportunity to help clients refinance their existing properties. The commercial term lending team gives borrowers a hassle-free way to plan for the future.

2

What percentage of the the D.C. market do private investors control?

18%
21%
32%
54%

YOU'RE CORRECT!

According to JLL, private investors comprised 54% of year-to-date investor activity in the D.C. market in 2017. Among these private investors, Chase often works with local owners. The preference for market experts helps the lending team identify strong lending opportunities in cycle-tested markets.

“We take a boots on the ground approach and we think our clients should too,” Werly said. “So our focus is on owners and operators who are based where their real estate is. They know their submarkets just like we know the submarkets.”

YOU'RE WRONG!

According to JLL, private investors comprised 54% of year-to-date investor activity in the D.C. market in 2017. Among these private investors, Chase often works with local owners. The preference for market experts helps the lending team identify strong lending opportunities in cycle-tested markets.

“We take a boots on the ground approach and we think our clients should too,” Werly said. “So our focus is on owners and operators who are based where their real estate is. They know their submarkets just like we know the submarkets.”

3

Which D.C. Metro submarket has seen the greatest multifamily activity this year?

Northeast D.C.
Montgomery County
Prince George's County
Northern Virginia

YOU'RE CORRECT!

Northern Virginia led all D.C. metro activity with more than $370M in multifamily sales in Q2, according to JLL. While some markets are more active than others, Chase relies on the expertise of its clients to identify investment potential.

“Our clients are going to drive our activity,” Werly said. “So we are always thinking about who our borrower is and then the submarket. Our clients are experts in the submarkets in which they will invest, and then it is up to us to bring them the capabilities of a world class institution with local execution.”

Clients bring the market knowledge, and Chase brings a stable cash flow and simple, cost-effective loan execution.

YOU'RE WRONG!

Northern Virginia led all D.C. metro activity with more than $370M in multifamily sales in Q2, according to JLL. While some markets are more active than others, Chase relies on the expertise of its clients to identify investment potential.

“Our clients are going to drive our activity,” Werly said. “So we are always thinking about who our borrower is and then the submarket. Our clients are experts in the submarkets in which they will invest, and then it is up to us to bring them the capabilities of a world class institution with local execution.”

Clients bring the market knowledge, and Chase brings a stable cash flow and simple, cost-effective loan execution.

4

Which multifamily type is seeing the most interest in the D.C. market?

One-bedrooms apartments
Two-bedroom apartments
Luxury condos
Student housing

YOU'RE CORRECT!

D.C. has emerged as a hub for young millennials, as the area draws in a growing number of tech firms and creative companies outside of the government sector. As this population matures and looks to start families, the two-bedroom apartment market could soften, Werly said.

Millennials will exchange roommates for children.

“Millennials are here and they are changing the market,” Werly said. “But as they become less young there will be an impact on the multifamily market. We are seeing clients experience some softness in the two-bedroom market as young professionals age, start families and avoid roommates.”

YOU'RE WRONG!

D.C. has emerged as a hub for young millennials, as the area draws in a growing number of tech firms and creative companies outside of the government sector. As this population matures and looks to start families, the two-bedroom apartment market could soften, Werly said.

Millennials will exchange roommates for children.

“Millennials are here and they are changing the market,” Werly said. “But as they become less young there will be an impact on the multifamily market. We are seeing clients experience some softness in the two-bedroom market as young professionals age, start families and avoid roommates.”

5

How much money is JPMorgan Chase investing in its PRO Neighborhood initiative?

$10M
$2B
$125M
$82M

YOU'RE CORRECT!

Beyond commercial term lending, Chase launched its Partnerships for Raising Opportunities initiative to bolster economic growth in low-income communities. PRO neighborhoods, like Wards 7 and 8 in D.C, will benefit from the $125M, five-year program through support for affordable housing, local businesses and access to education, among other investments.

“D.C. is a target market for us. It has all of the ingredients for long-term success,” Stuart said. "You have urban infill, a vibrant local economy and a healthy renter population. Between the housing stock and the borrowers with long-term viewpoint, it is a strategic growth opportunity."

YOU'RE WRONG!

Beyond commercial term lending, Chase launched its Partnerships for Raising Opportunities initiative to bolster economic growth in low-income communities. PRO neighborhoods, like Wards 7 and 8 in D.C, will benefit from the $125M, five-year program through support for affordable housing, local businesses and access to education, among other investments.

“D.C. is a target market for us. It has all of the ingredients for long-term success,” Stuart said. "You have urban infill, a vibrant local economy and a healthy renter population. Between the housing stock and the borrowers with long-term viewpoint, it is a strategic growth opportunity."

6

How many fees does Chase’s Feel The Free campaign waive?

1
2
3
4

YOU'RE CORRECT!

Feel The Free waives four major costs for borrowers: lender legal, appraisal fees, processing fees and Uniform Commercial Code filing costs. Chase provides term financing from $500K to over $25M for the purchase or refinance of stabilized apartment buildings across 13 major markets. The campaign is part of the bank’s goal to create a straightforward process that reduces paperwork and delays so borrowers can close on time.

“Feel The Free and Chase's retention feature are really just great examples of how we are consistently looking at our product set, how to innovate it and create a better client experience,” Oehler said.

YOU'RE WRONG!

Feel The Free waives four major costs for borrowers: lender legal, appraisal fees, processing fees and Uniform Commercial Code filing costs. Chase provides term financing from $500K to over $25M for the purchase or refinance of stabilized apartment buildings across 13 major markets. The campaign is part of the bank’s goal to create a straightforward process that reduces paperwork and delays so borrowers can close on time.

“Feel The Free and Chase's retention feature are really just great examples of how we are consistently looking at our product set, how to innovate it and create a better client experience,” Oehler said.

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Contact Lindsey Benfield at lindsey.benfield@bisnow.com
Related Topics: Greg Werly, Northern Virginia, Kurt Stuart, Monogram Residential Trust, Chase, Arlington, VA, Sales Volume, multifamily investment, Latitude Apartments, Will Oehler, Feel The Free