News
SHOW US AN UNHAPPY MF DEVELOPER . . .
June 28, 2012
| ... and Freddie Mac Southeast (Delaware on down) managing director Rich Martinez will show you one who bet big on humans settling on Mars. In the US and B'more, multifamily developers are feelin' groovy. |
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| ?Has anyone seen a multifamily developer without a smile on their face lately?? Rich asked at Bisnow's Multifamily Summit Tuesday. Homeownership is down. Millennials want to rent longer. Interest rates are low, he says. What's not to like? He also says Freddie lent $1.6B in the DC metro (Baltimore to Richmond) last year, making it the GSE region's biggest market by a factor of two (Atlanta is next). As cap rates creep up in concentric circles from the District,refis become more prevalent than acquisition deals, he says. |
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| Rich (with Columbia National Real Estate Finance?s Mike Cordes) also gave a rundown of the GSEs' future: The strategic vision the FHFA released in February finally acknowledged that Fannie and Freddie aren't just single-fam players and that the multifamily sides were actually profitable. Freddie made $1.3B last year (more than Facebook, Mike points out), but the gains were vacuumed up by single-family. Congress' chatter about uniform appraisal and underwriting standards makes a Fannie/Freddie merger seem likely, Rich says, though both also have surveys on the feasibility of privatization due to Congress at the end of the year. |
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| NorthMarq Capital's Nancy Ferrell says the almost $50B of debt that Fannie and Freddie put out last year would be a lot to expect banks and life companies to replace. In the meantime, investor?s recent flight to Treasuries is almost unprecedented, though the resulting low interest rates do spell opportunity. The lesson for investors, Mike says: ?Get your financing now. We won't see these interest rates again in our lifetime.? |
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| Schmoozing at our event, we snapped Down Payment Options?Louie Nehme, QBE?s Brett Halsey, and DPO?s Rick Dempsey and Jim Fulgentis. The Vegas-based firm is bringing to the US a condo-financing model already proven in Australia, New Zealand, and Canada. (We exported football to all those countries—might as well get something in return.) As a delegated underwriter for Sydney-based QBE, DPO issues insurance bonds (basically letters of credit) for condo downpayments so buyers don't have to tie up their investments while developers work on financing, construction, and pre-sales. The developer, in turn, can pre-sell and move forward faster. The firm has started in California and plans a Baltimore office to serve the Virginia-to-New York corridor. |
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| Yes, that Rick Dempsey. When he asked Baltimore Bisnow reporter Amanda Metcalf where she's from originally and she responded without pause, ?Pittsburgh,? Rick simply shook his fist and said through clenched teeth, ?1979!? Oops. |
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| JLL?s Chris Espenshade (flanked by Integra Realty Resources?Page Kimball and Jennifer McCoun) tells us the challenge is helping owners sell assets with existing debt. Today?s perfect deal, she says, is free and clear or has the seller covering yield maintenance, something she wonders if Rich can get waived (wink). After an affordable housing conference in Denver this week, she's heading to The Homestead in Hot Springs, Va., on July 4 for her annual family gathering and pimento cheese sandwiches on the hotel's front porch. |
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| We also snapped Bozzuto Development's Tess Guinn, lawyer Ben Polakoff, Commercial Settlement Services? Terry Anne Hearn, and Bozzuto Construction's Josh Peters and Kelly Cantley. Terry Anne says her firm did the title on Bozzuto?s Union Wharf and Annapolis Towne Centre and Waugh Chapel Towne Centre apartments. Josh says he and Kelly are finalizing construction contracts for a few third-party clients. He says he's ?uber tan? here because he forgot to use sunblock visiting his sister on the Jersey Shore this weekend. Kelly, meanwhile, has a cultivated tan from her Miami condo. |
