GlobeSt.com: This has been true for about a year; any signs of a lessening, or a shift in the wind?

Scott: Not really. The major lenders are being deluged with product right now. The last two or three weeks in the month of August are expected to be sleepy – and lenders are just feeling crazed. They got slammed with product when the rate on 10-year treasury notes slid to 1.5%, and everyone suddenly wanted to re-finance. Two weeks ago, rates shot up to 1.85%. Volatility creates a sense of urgency that the gates might be closing – so another sudden boom.

GlobeSt.com: Why is the boom only for multifamily, multifamily, multifamily, though?

Scott: When there is fear in the market, it drives lenders to invest in multifamily. One of the reasons the housing market is different and multi-family does well while office, industrial, and retail markets struggle, is that the government support is there, with ‘Fannie’ and ‘Freddie.’ If not for that, I think the markets would be equally difficult.

GlobeSt.com: Your company has had a record-setting year so far on the wings of multi-family. What’s your latest transaction?

Scott: In the last ten days, we handled a $15 million deal involving 289 units in central New Jersey. This week, we close on a $27 million deal with Sterling Properties and PNC on a property with 192 units in Middletown, New York.

GlobeSt.com: What are the trends in the types of mortgage deals being made?

Scott: More people want to lock down rates for 15 years. Even with all the economic issues on the table now, people believe rates are going to rise. Maybe the economy will get going in six months, maybe a year, or six years, but rates will inevitably rise. Borrowers are foregoing the right to go back and take out more dollars after 10 years in order to keep the rate down on a mortgage for 15 years.

GlobeSt.com: And?

Scott: Another big trend is people are biting the bullet and paying the pre-payment penalties on existing loans in order to lock in today’s rates for the long term. It used to be that a borrower always said, ‘If I have to pay yield maintenance on a loan, I’m not going to touch it.’