at the Mortgage Bankers Association.
“Now, as we are going into a recessionary
period, you are starting to see a contraction,” he said.
Woodwell kicked off the Capital Markets for Multifamily panel at the MBA’s
Commercial Real Estate Finance/Mul-tifamily Housing Convention & Expo,
held at the Manchester Grand Hyatt
in San Diego. “With the singlefamily
housing contraction, construction has
dropped considerably,” he said. “We
have seen a pull back in residential starts
and completions.”
In general terms, the multifamily
sector is not seeing rent contraction as
much as other sectors, said Woodwell.
In terms of property performance, there
are vacancy rates across every property
type ticking up, with retail showing the
most dramatic increase.
Following Woodwell’s introduction,
experts from multifamily lending came
together in a panel moderated by Shekar
Narasimhan, managing partner of Beek-man 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 Fred-
die 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 pro-
cess “to make sure we knew our position
as a lender.” —Natalie Dolce
San Diego Office Market Slumps
Despite Show of Tech Strength
This county’s office market has joined others in the country that are posting higher
vacancies and lower absorption, in spite of
a biotech sector and other strengths here
that bode well for its long-term performance, according to reports from major
brokerage agencies tracking the market.
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