Woodwell kicked off the Capital Markets for Multifamily panel at the MBA's Commercial Real Estate Finance/Multifamily Housing Convention & Expo, held here at the Manchester Grand Hyatt, a conference that attracted more than 2,000 attendees. "With the singlefamily housing contraction, construction has dropped considerably," he said. "We have seen a pull back in residential starts and completions."
 Natasimhan |
Following Woodwell's introduction, experts from multifamily lending came together in a panel moderated by Shekar Narasimhan, managing partner of Beekman Advisors. The discussion began with the question of how the perception of risk has changed. "We are going to be a much more aggressive going forward," said Phillip Weber, SVP of multifamily at Fannie Mae. "We are no longer in the era of 'we'll get to it later.' "
Panelists also included Diana Reid, EVP of PNC Real Estate Finance; Sam Davis, senior managing director and head of real estate at Allstate; and Michael May, SVP of multifamily sourcing at Freddie Mac
The marketplace has gotten so much more conservative as the economic turbulence has gotten worse and worse, said Davis. "Cash flows are being beaten up," he said. "The perception of risk going forward is ruling the day today."
When asked about multifamily construction loans, Reid said that her company is selectively lending, but she noted the importance of sponsorship. "We really look to the sponsorship and the strength of that sponsorship," she said. "It is a different age in banking, and recourse is definitely on the table now," she added, noting that for her company, the risk management and asset management is key.
The panel then focused on how life changed after Fannie Mae and Freddie Mac entered into a conservatorship in September. Weber said that the next chapter is still to be written as far as what's in store in the future, but "we know where we stand."
Reid said that she was concerned with what a conservatorship would mean and was a little doubtful of things being "business as usual" in the beginning. She explained that her company reviewed every communication, every contract that formed the operation and the process "to make sure we knew our position as a lender."
Reid continued that she has been "incredibly impressed by the dedication and quality of the attention and work the multifamily teams have provided." Her worries however, were about keeping the tremendous amount of institutional knowledge around. The other thing that is very important here, she said, is that she is both hopeful and focused on how to keep the leadership to get back to the global capital markets.
The panel then switched gears and addressed whether or not there was a capital gap and how that gap would get filled. Davis says that a cap gap does exist. "I don't think we can depend on Fannie and Freddie to keep doing what they are doing in this market," he said. One major concern he said, is that after three years on the panel, he had never seen to many people sitting in the room, "which means that things must be really bad if they have time to come here."
Reid says that there is plenty of risk capital to be invested available. "It is a pricing issue," she said. "Senior financing is the problem. I think it will take confidence to bring it back."
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
