Among the initiatives is the relaunching or expansion of several existing programs designed to encourage affordable multifamily housing development, directing more financing towards manufactured and 2- to 4-unit homes, and making it easier for private homeowners and nonprofits to compete with investors. 

The final prong is in response to a new element to the housing affordability crisis. In the last 18 months, home prices rose astronomically across the country, while, at the same time, a tremendous amount of institutional capital poured into single-family housing. In 2020, 1 in 6 homes were purchased by an investor owning 10 houses or more, according to a report from Redfin, cited by the Biden administration, making it difficult for individuals to compete. 

In terms of affordable multifamily housing development, the administration has revived or expanded three programs. 

First, the Treasury Department and the Department of Housing and Urban Development (HUD) will relaunch the HUD Risk-Sharing Program, which will help state housing finance agencies finance affordable multifamily development. 

In addition, the Federal Housing Finance Agency (FHFA) will increase the amount that Fannie Mae and Freddie Mac are allowed to invest in Low-Income Housing Tax Credits (LIHTC), one of the country’s longest-running methods for financing affordable multifamily development. The cap will be doubled from $500 million each to $1 billion each. 

Third, the Treasury Department is making $383 million available for affordable housing financing through a program called the Capital Magnet Fund, a competitive grant program for nonprofits and community development institutions. 

To increase affordable homeownership, the FHFA will allow Fannie and/or Freddie to provide loans on manufactured homes and more 2- to 4-unit homes. 

To compete with institutional investors, the Biden administration is offering a few ways to increase the inventory of housing available to homeowners and nonprofits. It is simplifying the process of selling foreclosed homes insured by the Federal Housing Administration (FHA); increasing the amount of time that private owners get to buy homes owned by HUD or Fannie and Freddie, an inventory of 12,000 homes; and giving nonprofits priority to buy distressed HUD-owned multifamily properties, which number 1,700. 

Chava Gourarie can be reached at cgourarie@commercialobserver.com.

GMF purchased the property, which is located six miles from the New York Mets‘ spring training complex, from Panther Residential Management for $46 million.

The deal was secured through a JLL debt team that included Senior Managing Director Elliott Throne, Managing Director Brian Gaswirth, Director Jesse Wright and Associate Kenny Cutler. JLL’s GMF Capital acquisitions team was led by Jared Frydman and Alejandro Ramirez.

“Freddie Mac provided extremely accretive loan terms with great flexibility for an experienced, repeat borrower,” Gaswirth said in a statement.

Located at 1900 Aledo Lane, The Parc at Gatlin Commons comprises a mix of one-, two- and three-bedroom units. Its amenities include fitness facilities, a clubhouse, theater room and swimming pool.

“GMF has done an exceptional job adding a brand-new, high-quality asset to their rapidly expanding portfolio in Florida,” Wright said in a statement.

Monthly rents at The Parc at Gatlin Commons range from $1,641 for one-bedroom units to $2,489 for three bedrooms, according to Apartments.com.

Freddie Mac and GMF Capital did not immediately respond to requests for comment.

Andrew Coen can be reached at acoen@commercialobserver.com.

The sale closed last month, according to information from Wood Partners’ website. 

Wood Partners has a rather sizable collection of Alta-branded multifamily properties within its portfolio, adding Alta Headwaters to the fray last year upon completing construction on the 328-unit asset. WayPoint has moved to rename the property Luma Headwaters, according to Newmark.

Officials at Wood Partners could not be reached. Representatives for WayPoint did not respond to an inquiry about the transaction. 

Newmark’s Scott Ramey, Patrick Dufour and Brad Downing advised Wood Partners in the sale, and Matthew Williams and Kyle Schlitt, also of Newmark, worked on behalf of WayPoint to originate the Freddie Mac-backed financing.

“Luma Headwaters is a prime example of the strength of the Orlando multifamily market as the property began leasing in late summer of 2020,” Ramey said. “The property averaged over 30 leases per month and was able to achieve over 90 percent leased [capacity]  in less than nine months, all while increasing rents by more than 10 percent along the way.”

The gated property is located at 4000 Headwaters Way, just 12 miles south of the heart of Orlando and just a few blocks away from the intersection of the Martin Andersen Beachline Expressway and the South John Young Parkway — two major thruways in the area. It is close to a range of shopping and food and beverage offerings, as well as local schools in Freedom Middle School and Freedom High School. 

Luma Headwaters spans nearly 314,600 square feet and includes a four-story elevator building, as well as mix of community amenities, such as a clubhouse building, a cyber cafe, a fitness center, a lounge with a pool table and games, a leash-free dog park and pet washing station, barbecue areas, detached garages, and a saltwater pool with a sundeck and cabanas and a covered pavilion. 

Monthly rents range from more than $1,600 for studios to more than $2,500 for three-bedroom apartments, according to listing information from Apartments.com. The units range in size from around 600 square feet to more than 1,300 square feet.

“Given Waypoint Residential’s proven track record along with the property’s incredible lease-up, we were able to procure interest from numerous lenders including life companies and the agencies,” Williams said. “Ultimately, Freddie Mac provided the most aggressive terms and the best closing execution based on their long standing relationship with [the borrower].”

Mack Burke can be reached at mburke@commercialobserver.com.

“We began working on this portfolio with RREAF day one and explored all financing avenues available including SASBY executions and structured products from many of the largest investment banks in the space,” Nathan Stone, a managing director in Berkadia’s Dallas office, said in a statement. “After weighing all options, Freddie Mac emerged as the ideal partner for RREAF in this transaction and we are pleased that RREAF trusted Berkadia’s experience and ability to execute on a transaction of this magnitude.”

Stone added that Berkadia has now closed 34 loans with RREAF in a 14-month period with loan balances exceeding $647 million. Dallas-based RREAF has acquired roughly $1 billion of real estate assets in the last 12 months and is planning two other tranches of its three-phase multifamily acquisition through November that will total in excess of 4,000 units. The apartment complexes are located in Florida, Georgia, Alabama, North Carolina, Louisiana and Texas. 

“This large acquisition is a culmination of months of negotiations, due diligence, research and financial structuring,” Kip Sowden, RREAF’s CEO, said in a statement. “This is one of the largest real estate transactions in the country since the COVID outbreak.”

Freddie Mac did not immediately respond for comment.

Andrew Coen can be reached at acoen@commercialobserver.com.

Greystone’s network, and its position as one of the most active multifamily bridge loan providers and originators of Fannie Mae Delegated Underwriting and Servicing (DUS), Freddie Mac Optigo and U.S. Department of Housing and Urban Development debt products, will provide C&W and its existing clients with more optionality in financing existing rental stock or building new.

“Greystone’s mission has always been to provide an unparalleled client experience, and this deal truly manifests what we hope to achieve in solving for any need of a commercial property investor,” Greystone Founder and CEO Stephen Rosenberg said. “By combining our collective powers and areas of expertise, I believe there is no reason for an investor to search anywhere else for capital and advisory solutions.”

This move is also a continuation of C&W’s ongoing push to expand its multifamily capabilities. In early 2020, it acquired one of the country’s largest multifamily property management firms, Pinnacle Property Management Services.

“We’re excited to offer a new integrated capability to our investor clients with more direct access to Greystone’s balance sheet and capital solutions, including debt financing with Fannie Mae, Freddie Mac, and HUD,” C&W CEO of the Americas, Andrew McDonald, said. “Greystone’s passion and creativity in structuring deals and leveraging its balance sheet for clients are the reasons the firm stands out. This combination will demonstrate how global investors can benefit from two industry leaders providing premier investor services and a seamless, integrated client experience.”

Rosenberg pointed to this partnership’s initial focus on the multifamily market, but said the door is open to more possibilities within the broader commercial real estate market down the road. 

“We see sizable growth opportunities ahead in serving clients with capital and services in other commercial asset classes, and I couldn’t be more excited about the potential, and what the future brings,” Rosenberg said. 

Over the last few years, traditional commercial real estate advisory firms have been pushing to acquire multifamily agency lending capabilities through M&A activity, attempting to merge brokerage operations with direct lending to gain the best of both worlds. 

More recently, in June, Meridian Capital Group and Barings Multifamily Capital officially launched NewPoint Real Estate Capital, marrying Meridian’s advisory relationships and Barings’ multifamily and agency lending and asset management capabilities. Former Freddie Mac CEO David Brickman and Capital One’s former head of multifamily, underwriting and asset management, Jeff Lee, were tapped to lead NewPoint. 

Mack Burke can be reached at mburke@commercialobserver.com.

“The Melos are skilled developers and an outstanding borrower and the type of relationship Freddie Mac is pleased to continue to grow,” Charles Foschini, Berkadia senior managing director, said in a statement.

 Located at 55 NE 5th Street and 25 NE 5th Street, Downtown 5th’s two towers consist of 1,042 luxury rental apartments along with 13,261 square feet of retail space.  The property, which opened in July 2021, has a wide range of amenities including 3,600-square-foot fitness center, conference room, private workspaces, coffee lounge, two swimming pools and a social room.

Monthly rents at Downtown 5th range from $1,750 for one-bedroom units to $4,200 for three-bedroom apartments, according to Apartments.com.

Mekras’ Aztez Group has now facilitated 13 loans on behalf of Melo Group. In 2021 it closed three multifamily financings for the Miami-based developer totaling more than $368 million for 1,557 units.

“Downtown 5th was a very unique assignment, requiring Aztec to source and deliver a very large loan for a single-phase rental apartment community with limited operating history,” Mekras said in a statement.

Officials for Melo Group did not immediately return a request for comment.

Andrew Coen can be reached at acoen@commercialobserver.com.

“Looking beyond primary markets, an examination of secondary- and tertiary-market activity highlights areas with high growth potential. Additionally, secondary markets are areas of opportunity for loan originators to branch out and grow lending pipelines.

“The Columbus, Ohio, MSA had the most originations among secondary markets with nearly 100 loans totaling $1.1 billion in volume. San Antonio followed with the second-highest number of multifamily loan originations, but its loans were significantly larger in size, equating to nearly $2.5 billion in origination volume. San Antonio was the largest of all secondary multifamily markets by aggregate loan origination balance. The average loan origination size for the San Antonio market was approximately $30 million, compared to $12.4 million in Columbus.

“Other MSAs included in the top 10 secondary markets for 2021 multifamily loan originations included Indianapolis, Cincinnati, Tampa, Riverside, Calif., Virginia Beach, Oklahoma City, Tucson and Las Vegas. Despite relatively fewer loan originations, Oklahoma City was a standout out in terms of origination volume in 2021, ranking second-highest in total origination balance with just under $2 billion. With Dallas as a top market for multifamily origination in 2021, Oklahoma City, located just three hours north, likely benefited from investors expanding their reach into neighboring MSAs.

“A trend of loan originations for nontraditional markets was also apparent in 2021. Non-metropolitan Texas exhibited elevated loan origination activity compared to other markets. Non-metropolitan Texas comprises any rural location that does not fall within the boundaries of the 20-plus MSAs that CRED iQ tracks within the state of Texas. The presence of non-metropolitan regions on a list for top multifamily origination markets is further evidence of the expansion and growth of multifamily investment and financing that occurred in 2021.”

Station said the program, which provides a 9 percent tax credit or 70 percent subsidy for new affordable housing construction or substantial rehabilitation, has helped improve multifamily supply, but more outside-the-box ideas should be brought to the table to create further strides.

“I’ve seen particularly in major cities some wonderful schools converted into affordable housing, some beautiful churches converted to affordable housing, some old factories that have just been blights in cities and they’ve been converted,” Staton said of some of the creative ways municipalities are trying to address affordable housing in concert with the private sector. “We need to preserve our existing housing stock and with any of those vacant buildings, put some resources through private and public sectors and convert those to affordable housing, mixed-income, mixed-use and make a community.”

The panel also included Jamie Woodwell, vice president of the commercial and multifamily group, research and economics at MBA; Ethan Saxon, the MBA’s associate vice president of legislative affairs; and Shekar Narasimhan, managing partner of Beekman Advisors. Katelynn Harris Walker, associate director of affordable housing with MBA, moderated the discussion.

Narasimhan noted that the U.S. has failed to truly innovate when it comes to affordable housing over the past half century while other countries are aggressively finding ways to produce more multifamily properties in less time while also lowering construction costs. He said that lenders have however found successes with financing affordable housing over the years and can be part of addressing the solution.

“The low-income housing tax credit has proven that affordable housing can be the most profitable business you can do as a lender and the safest business you can do as a lender,” Narasimhan said. “Most funds that have tax credit-financed housing have experienced two or three delinquencies over 35 years. So you can think of something safer to do and more important to do and that you can make real money doing, why aren’t we integrating finance to do more?” 

Fannie Mae and Freddie Mac will be doing their part on the government-sponsored enterprise side in trying to boost affordable housing projects in 2022 after the Federal Housing Finance Agency (FHFA) announced last fall that lending caps would be $78 billion for each entity this year compared with $70 billion in 2021. FHFA requires that at least 50 percent of its multifamily business be comprised of “mission-driven” affordable housing with a minimum of 25 percent geared toward residents at or below 60 percent of area median income, up from 20 percent in 2021.

Leanne Spies, senior vice president of asset management and operations at Freddie Mac Multifamily, and Michele Evans, executive vice president and head of multifamily at Fannie Mae Multifamily, both said Tuesday at MBA CREF they are committed to enhancing affordability in the marketplace. The two government sponsored enterprises leaders spoke on panel, “All in the Multifamily: Conversation with GSE Leadership,” which also featured Kelli Carhart, head of multifamily debt production at CBRE; Phyllis Klein, head of agency production at Capital One Commercial Real Estate; and Chad Musgrove, associate director of originations at Lument. Amber Rao, senior mortgage banker at KeyBank, moderated. 

“Our adjustments are going to be more on the affordability side,” Spies said. “Affordability has always been our mission and always been in our sweet spot. It’s going to be even more so this year.” 

Andrew Coen can be reached at acoen@commercialobserver.com. 

“My focus as I take on this role will be supporting this exceptional team, helping them gain access to the resources they need to drive innovation and create greater efficiencies, and ensuring that we continue fulfilling our clients’ needs,” Toye told Commercial Observer. 

JPMorgan Chase’s CDB team just ended a record-breaking year, with nearly $5 billion invested to support underserved communities across the country with financing for affordable housing and vital community institutions. “With that momentum, we’re poised for additional growth and expansion. I look forward to finding more synergies between our CDB and OBS businesses to provide additional tools to meet client needs,” Toye said. 

Prior to joining JPMorgan Chase, Toye was head of community lending and investment at Wells Fargo. He managed affordable housing lending, New Markets Tax Credit investments, Low Income Housing Tax Credit and financing for community development financial institutions. Previously, he served as head of production for Wells Fargo multifamily capital, where he managed the government-sponsored enterprise (GSE) originations team, increasing production, and overseeing the firm’s relationships with Fannie Mae and Freddie Mac.

“I had the opportunity to work with several community groups that were providing social services as well as affordable housing. Seeing the impact of the work on the tenants and the community made an impression on me,” Toye said. “I’ve seen affordable housing transition from being thought of primarily as a CRA [or Community Reinvestment Act] activity to a real focus and genuine commitment, not just from banks and technology firms.”

When he first joined JPMorgan Chase — already with over two decades of experience under his belt — Toye focused on building the firm’s agency and off-balance-sheet lending capabilities to provide commercial real estate clients access to a broad suite of lending and credit solutions through GSE partnerships. He will assume his new leadership responsibilities immediately while continuing to oversee the agency and OBS lending business.

“Over the past year, I’ve had the unique opportunity to see this team in action, doing more than they have before with even less. On that note, I’d also like to see us grow our staff, adding and grooming more diverse young talent,” he said. 

Toye earned his MBA from The Wharton School of Business at the University of Pennsylvania and a bachelor’s degree in aerospace engineering from the University of Virginia. He played college football as a running back at Virginia and earned All-Atlantic Coast Conference academic honors. Throughout his career, Toye has mentored other professionals in commercial banking and real estate and held a leadership role at the Urban Land Institute. 

“The demand for affordable housing continues to outpace the market’s ability to supply it, and the pandemic certainly made the urgency of the housing crisis more apparent than ever,” Toye said. “The industry will need to get creative to increase the affordable housing supply and think about how to build affordable homes quickly and inexpensively.”

Emily Fu can be reached at efu@commercialobserver.com.

“On a regional level, this Colliers office offers an incredible amount of opportunity for brokers like me that are in the thick of their career,” Schmidt told CO. “There is a clearly defined path that provides growth, advancement and visibility. I’m looking to make the next 20 years the best of my career and Colliers is a key piece in helping me take things to the next level.”

Her immediate company goals include promoting visibility of the Colliers brand, partnering with her new colleagues and collaborating across the region to win new business, and mentoring young women already at Colliers, especially those that are contemplating becoming a broker. 

“As one of the tenant representation leads, I’ll be training and mentoring any new upcoming brokers to the region,” Schmidt said. “I will also be managing client accounts, developing new business and helping to grow the tenant rep practice throughout the region.”

This is a great time to be guiding clients in their office strategies because it’s a moment of transition, said Schmidt. She called 2022 a “year of action” for tenants. 

“Not only are company leaders starting to think about office space again, but they are also starting to utilize it,” Schmidt said. “Hybrid is in full force, and you can tell just by the traffic that’s coming back. While tenants begin to really figure things out, it also continues to be a tenant’s market, so there are great deals to be had where tenants can experience significant savings if they decide to sign a lease this year. Landlords are willing to get creative in exchange for tenancy so there is a fair amount of flexibility in deal terms that can work for both sides.”

During six years at Cushman & Wakefield, Schmidt specialized in tenant representation, including office headquarters relocations and real estate dispositions on behalf of her national and international clients.

For example, she was integral in the 205,000-square-foot headquarters relocation for Appian Corporation to 7950 Jones Branch Drive in McLean, Va., and Public Broadcasting Service’s relocation to a 120,000-square-foot office space at 1225 S. Clark Street in National Landing. 

Schmidt has also worked with clients such as Freddie Mac, Hyundai, Somatus and JD Power.

Prior to Cushman & Wakefield, she worked at Transwestern for six years in Atlanta and Denver.

“It’s a great time to be a tenant and I want to make sure all business leaders know it,” Schmidt said. 

Keith Loria can be reached at Kloria@commercialobserver.com.

“We saw a unique opportunity to capitalize on the tremendous increase in value we had achieved, unique tax benefits,and wish to further improve the assets,” Jeffrey Weiskopf, chairman of White Eagle Property Group, said. “With Meridian’s expertise, we actualized our ability to return all original equity, give additional monies to investors and also inserted fresh capital for projects on the property level, further improving our investments and maintaining consistent cash flow.” 

NewPoint Real Estate Capital and Capital One Multifamily Finance provided the 10-year loan. The financing features a daily secured overnight financing rate-based rate and five-year interest-only period. 

Meridian Capital Group‘s Jacob Katz, Abe Hirsch, Zev Karpel, Daniel Hofstedter and Spencer Isen negotiated the financing.

“Given Mr. Spitz’s proven track record of increasing the bottom line in the multifamily industry and Mr. Weiskopf’s leadership in financial markets, we were able to custom-tailor highly accretive financing that reduced interest expense and provided an additional five years of interest-only payments,” Hirsch said.

The eight-asset portfolio includes Avenues of Lakeshore and Avenues of Inverness, totaling 1,106 units, in Alabama; Cranes Landing and Midora at Woodmont, encompassing 451 units, in Florida; Avenues of Kennesaw East and Avenues of Kennesaw West, with a total of 524 units in Georgia; and Mission Triangle Point and Avenues of Steele Creek, comprised of 464 units in North Carolina. 

The properties contain units that are recently renovated with amenities including pools, fitness centers, tennis courts, barbeques and outdoor kitchens, fire pits, volleyball courts and dog parks. 

NewPoint Real Estate Capital and Capital One Multifamily Finance did not immediately respond to requests for comment.

Emily Fu can be reached at efu@commercialobserver.com.

“This is an early, first-stage partnership where clients of CRED iQ and Cherre will be able to access our loan property, ownership contact and valuation data through Cherre’s API connections,” said Mike Haas, co-founder and managing partner of Radnor, Penn.-based CRED iQ. Haas declined to comment on next steps in the partnership process.

Founded in May 2020, CRED iQ has 10 full-time employees and has raised “an early round of financing from private investors,” said Haas, who would not provide the funding amount.

CRED iQ provides data, analytics and valuation for commercial mortgage-backed securities, or CMBS, loans, as well as Freddie Mac, Fannie Mae and Ginnie Mae loans, and other loan and property data, tracking them on a monthly basis, he said. (The company also provides regular data to Commercial Observer.)

Prior to co-founding CRED iQ, Haas and Bill Petersen were with Kroll Bond Rating Agency, where they built the company’s CMBS surveillance system, Haas said. The duo also worked at Morningstar and Realpoint earlier in their careers.

“The idea of CRED iQ came about because we wanted to aggregate as much commercial real estate data, including all the CMBS data, and make it more readily available to the wider market, including commercial real estate brokers, lenders and investors,”  Haas said.

“In today’s fast-paced real estate market, actionable intelligence based on data is redefining the way CRE brokers, lenders and investors make decisions,” said L.D. Salmanson, CEO of Cherre, a leading real estate data integration startup. “Integrating CRED IQ’s real estate, analytics and valuation data into Cherre’s platform provides our mutual customers with data and insights on maturing loans, expiring leases and upcoming foreclosures so that users can make quick, informed decisions and beat competition to deals.”

The CRED iQ platform is based on more than $2 trillion of CMBS; CRE collateralized loan obligation; single asset single borrower, and government sponsored enterprise loan and property data, according to the company.

CRED iQ tracks maturing loans, expiring leases, financial operating statements, delinquent loans, newly issued loans, foreclosures, and real estate owned properties. It also maintains borrower and ownership contact information including names, phone numbers, emails and addresses.

Philip Russo can be reached at prusso@commercialobserver.com.

The sellers, Blackfin Real Estate Investors and Acre Valley Real Estate Capital, acquired the property in 2019 for $21 million.

“Earle Manor is located near the Wheaton Metro, a thriving part of Montgomery County that is facing tremendous redevelopment pressure and escalating rents that threaten to displace residents,” Kimberly Driggins, executive director of WHC, told Commercial Observer. “More and more of this naturally occurring affordable housing in high opportunity neighborhoods like Wheaton, are being lost every year.”

Originally constructed in the 1960s, owners will reserve 50 percent of its units for residents at 60 percent of the area median income (AMI), 25 percent of the units at 80 percent AMI and the remaining 25 percent of units at market-rate rents. An existing rental assistance program with Montgomery County provides subsidies for below-market rents for 27 units through February 2025. The rents were not disclosed.

This is the fourth property acquisition for WHC, which is halfway toward its goal of preserving or creating affordability for at least 3,000 units in the D.C. region, while also advancing housing equity and sustaining diverse and inclusive communities.

“The acquisition advances our mission to preserve housing affordability for essential workers—nurses, teachers, first responders, construction workers and others, particularly African American and other residents of color, who are facing crushing rent increases,” Driggins said. “By stabilizing rents and focusing  on inclusive property management that encourages residents to shape the place they live, residents can build wealth and opportunity for themselves.”

Berkadia provided the first mortgage through Freddie Mac, while the Washington Housing Initiative Impact Pool provided mezzanine financing.

JBG SMITH, one of the region’s largest developers and landlords, will manage the property. 

WHC was not available immediately for comment. Requests for comment from other parties in the deal were not immediately returned.

Keith Loria can be reached at Kloria@commercialobserver.com

“There is a dire need for affordable housing in our country, only exacerbated in the New York market where over half a million people rely on the stability of public housing every year,” Mathew Wambua, vice chairman and head of Merchants Capital’s New York office, said in a statement. “I am proud of our company’s commitment to being a partner in the revitalization of public housing in New York, serving a vital role as the financier for many famed and historical properties in our community.”

Carmel, Ind.-based Merchants has provided nearly $480 million in financing towards more than 3,300 units of NYCHA projects, the largest public housing authority in North America.

“These projects require substantial capital and we’re grateful to Merchants Capital and other financial partners for providing much needed resources to support the rehabilitation of Harlem River Houses,” NYCHA spokeswoman Rochel Leah​ Goldblatt said in a statement.

Located between West 151st and West 153rd streets, Harlem River Houses currently comprises 690 apartments offered at 100 percent affordability to low-income residents in the area. Upon renovation, the property will offer 693 apartments spread across eight residential buildings that house more than 1,400 residents. Sidewalks, gardens and sculptures within the property grounds will also be restored and new playgrounds, benches and activity spaces will also be installed.

“We are so excited to get to work on the restoration of Harlem River Houses,” Alexa Sewell, president of Settlement Housing Fund, said in a statement. “This investment is a huge win for public housing, for the neighborhood and most importantly, for the residents of Harlem River Houses.”  

Andrew Coen can be reached at acoen@commercialobserver.com.

Geri Borger Urgo: Given the impact of the pandemic, the past year and a half saw renters not having to go to their offices, so proximity to an urban core was not as necessary as it had been. There was a reluctance to get on public transportation, and more pressure on space at home. Many people in their twenties moved back with their parents for more flexibility and space, and we also saw migration to tax-friendlier states like Florida and Texas. The combination of economic reasons, work from home and different living space needs all largely stem back to the pandemic.

CO: Given all that, do you believe that urban downtown areas and central business districts (CBDs) will rebound to pre-pandemic vibrancy?

GBU: I’m hopeful that things will return to normal, but we did see a lot of flight from urban downtown areas. I live in Washington, D.C., and see it downtown with closed restaurants and ground-floor retail struggling as fewer people head in from the suburbs every day. This also applies in New York, which was seen as the epicenter of the pandemic for a while. But I do think there’s a general rebound process happening. We just provided a bridge loan for a very large multifamily high-rise in midtown Atlanta with easy access to downtown Atlanta and Buckhead. Google just opened a 500,000-square-foot regional hub across the street, which is bringing people back into the neighborhood.

In Washington, D.C., office leasing is struggling, specifically downtown, and we see a lot of requests for adaptive reuse: making an office building a multifamily property or taking an extended-stay hotel and repurposing it into multifamily. It’s a tricky time to lease certain sectors — but not multifamily.

CO: Have you noticed a shift in investor appetite between tier-one, tier-two or tier-three cities?

GBU: I’ve noticed less distinction between the three as investors are focused on chasing yield. There’s a lot of capital in the multifamily space and a lot of equity that needs to be put out. You’ve got consolidation on the ownership side by the larger private equity funds and national owner-operator players. This leads the market to become less of a factor in the cap rate. Companies have to solve for yield they’ve either promised their fund investors or have had in their historical track record. Often they’re uncomfortable with the cream of the crop assets, so they’re trying to find something different. This is part of why you see some movement into single-family rentals.

CO: You recently added two originators to your team, both based in the Sun Belt. Talk about your prospects for that region.

GBU: We are bullish on the Sun Belt for some of the demographic reasons touched on earlier, but these were also strategic hires. The originators are Trevor Ritter in Atlanta and Marc Cesare in Dallas. Both have deep industry experience and relationships. Atlanta’s always been a hub for commercial real estate. If you walk around Buckhead, you could run into 20 of the top 50 national multifamily investors at lunch. So that was tactical.

As an originator, [Cesare] is unique because he has an underwriting background. He’s very detail-oriented, which I love. Before [Cesare’s] arrival, our Dallas area office was mainly comprised of servicing, asset management and operations personnel. It was important for us to bring originations to Texas.

CO: What are some of the most in-demand financing products you’ve worked with recently?

GBU: NewPoint launched a floating-rate bridge product in December 2021 that has resonated extraordinarily well with our clients, who are often buying with tight cap rates. There are, after all, a lot of transitioning assets across the country. Whether it is a lease-up, value-add or lease-trade-out play, our bridge program allows us to partner with clients strategically and responsively so they can execute on their investment thesis. One difference between the debt funds and our product is that we service it — we’re not just collecting a fee. Our goal is a long-term relationship with our client and serving the property throughout its life cycle.

CO: How has the agencies’ continued shift to support affordable housing impacted financing, and are programs like Fannie Mae’s Sponsor-Initiated Affordability gaining in popularity?

GBU: It’s more of a defined focus than a shift. The agencies have shown they’re willing to reshape their comfort zones on affordable transactions, including capital “A” affordable and workforce housing.

Fannie Mae’s Sponsor-Initiated Affordability (SIA) program is nifty. This is where an operator-owner voluntarily imposes affordability restrictions. In turn, Fannie Mae gets aggressive on the underwriting parameters and provides a pricing incentive to keep rent growth at a minimum. It feels like a great perspective for the agencies to have. You’re not eliminating return capability; you’re just aligning with a sponsor’s desire to focus on affordability and then giving them a benefit. I expect SIA is going to gain popularity. Fannie Mae is particularly focused on it, and Freddie Mac is doing similar things.

The problem with current cap rates is that it’s challenging to make an acquisition work when there is a restriction on rents unless you’ve got an equity provider willing to sacrifice return or solve for something other than the last dollar. That’s tricky with today’s confluence of competing priorities. However, I believe that Fannie Mae and Freddie Mac are forward-thinking and in tandem with the Biden administration and the Federal Housing Finance Agency in regard to balancing affordability incentives.

“Now is the opportune time for creativity across public and private partnerships within the affordable housing space,” Grzywacz told Commercial Observer. “I am looking forward to seeing what the future holds and contributing to the growth of JLL’s affordable platform.” 

She noted there were two main factors that attracted her to the firm.

“First and foremost, JLL is a leading capital provider in the affordable housing space, and their industry expertise in affordable and the broader commercial real estate market is unmatched,” she said. “Additionally, the company has amazing people and a culture that fosters a team environment of top professionals operating with the highest level of integrity for their clients. I believe that mentality is a winning combination for success.”

Grzywacz comes to JLL after six years with Freddie Mac, where she most recently served as production manager on the agency’s multifamily affordable housing team. In that role, Grzywacz regularly worked with the top three accounts for Freddie Mac, the largest affordable housing lender by loan fundings. 

“During her tenure at Freddie Mac, she was an amazing partner to us, and her knowledge, thoughtfulness and personality will ensure her success,” said C.W. Early, affordable housing leader with JLL. “Jillian is part of our overall strategy to build a best-in-class affordable team.”

Grzywacz also serves as a mentor for Project Destined, an organization that provides entrepreneurship and real estate training to diverse students. She plans to continue working with the program while at JLL.   

Keith Loria can be reached at Kloria@commercialobserver.com.

“The attractive financing from JLL allows us to optimize our investment as well as provide us with a significant amount of fresh capital to pursue future acquisitions,” Henry Manoucheri, CEO of Universe Holdings said in a statement.

The Nantucket Creek community is located at 9225 Topanga Canyon Boulevard along State Route 27. It includes one- and two-bedroom units ranging from 623 to 1,100 square feet. It also features a clubhouse, billiards room, shuffleboard court, pool table, fitness center, library, recreational room and walking trails.

The JLL team representing the borrower was led by Charles Halladay, Jonah Aelyon and Elle Miraglia.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.

“This Freddie Mac execution allowed us to hold proceeds based on an advantageous sizing rate for 60 days during a turbulent market,” said Geri Borger Urgo, head of production for NewPoint. “As such, we were able to provide Harbor with certainty of terms throughout their acquisition process.”

With an interest-only period of five years, the seven-year Freddie Mac loan provides Harbor with the flexibility to execute a promising value-add renovation. Nearly all units qualify as mission-driven, with 99 percent of units affordable at 80 percent of average median income (AMI)  and 20 percent affordable at 60 percent of AMI, according to the press release. 

“Alcove at Seahurst will see high demand given its affordability and the lack of new supply in the surrounding area,” said Greg Heller, managing director of acquisitions at Harbor Group International. “Our investment strategy hinges on pairing acquisitions with prudent leverage and the best loan terms available. The NewPoint team confidently delivered during a challenging environment with a structure and pricing that creates value for both our residents and investors.”

Emily Fu can be reached at efu@commercialobserver.com.

“Our mission is centered around ensuring communities have access to safe, high-quality, affordable housing, and we’re proud to extend this commitment to our Michigan portfolio,” Jeffrey Moelis, a managing director at L+M, said in a statement. “Preserving our nation’s affordable housing stock has never been more important, and as we work to rehabilitate each site residents will not only receive improved living environments but will also be assured that their homes will remain affordable.” 

Moelis said he looks forward to “working alongside Ginosko to breathe new life into each of these nine properties.”

More than half of all the units in the Michigan portfolio are designated for seniors, while seven of the properties have HUD Section 8 Contracts and two buildings are restricted to households at or below 60 percent of area median income. Rehabilitation plans include renovating kitchens and baths, modernizing amenity spaces, upgrading mechanicals as well as improving the properties’ facades.

The portfolio is made up of Art Center at 5351 Chrysler Drive in Detroit; Birch Park at 300 Birch Park Drive in Saginaw; Charring Square at 6123 Greenwycke Lane in Monroe; Coventry Woods at 3550 Remembrance Road NW in Walker; Greenhouse at 17300 Southfield Freeway in Detroit; Lawrence Park at 7000 East 10 Mile Road in Center Line; Lexington Village at 1310 Pallister Street in Detroit; Lincolnshire Village at 44908 Trail Court in Canton; and Phoenix Place at 47251 Woodward Avenue in Pontiac. 

Four of the properties — Art Center, Charring Square, Lincolnshire Village and Phoenix Place — were acquired using equity through Citigroup’s Emerging Managers Fund affordable housing initiative and debt provided by Merchants Bank. The other five properties — Birch Park, Coventry Woods, Lawrence Park, Lexington Village, and Greenhouse — were acquired through Merchants Bank, and will eventually be syndicated using 4 percent Low Income Housing Tax Credits (LIHTC) through a tax-exempt bond issuance provided by the Michigan State Housing Development Authority.

“Preserving affordable housing is a notable pursuit, especially when our nation is facing an affordability crisis. We are honored to finance a part of the solution,” Michael Milazzo, senior vice president, originations at Merchants Capital, said in a statement. 

CPC Mortgage is also providing first-mortgage financing through Freddie Mac’s Targeted Affordable Housing platform on a total of seven properties. On four of those properties CPC is providing subordinate debt as a bridge to 4 percent LIHTC re-syndication.

“As a mission-based lender, our goal is always to work with high-quality sponsors who are focused on preserving and expanding access to affordable housing,” John Cannon, president of CPC, said in a statement. Cannon added that the developers and portfolio “aligned seamlessly with both of these goals.”

The acquisition adds to GDC’s 4,350-unit portfolio, of which 97 percent maintains regulatory income and rent restrictions. The Novi, Mich.-based firm was founded in 2002.

“Here you had a minority development company with the creativity and know-how to structure this portfolio located in its own ‘backyard’, coupled with the additional financial wherewithal and collective genius of L+M, CPC, and Merchants,” Amin Irving, founder, president and CEO of GDC, said in a statement. “I truly do believe these deals reflect the heart of economic and collaborative equality.”

Andrew Coen can be reached at acoen@commercialobserver.com. 

“M&T has deep experience in the commercial real estate space and the innovation office marks our commitment to continued expansion in diversified commercial real estate solutions,” Peter D’Arcy, head of commercial banking at M&T Bank, said in a statement. “This is a substantial opportunity to build upon our already strong capabilities in this space and it further complements M&T’s trustworthy and forward-thinking approach to exceed client expectations.”

The bank’s existing CRE lending infrastructure includes M&T Realty Capital Corporation, a subsidiary of M&T, which is authorized to originate loans under agency programs from Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development (HUD). 

Cianfichi takes on her new leadership role after serving as  an executive vice president at M&T  covering strategy for M&T’s $48 billion in CRE debt commitments. She first arrived at M&T in 2004 as a commercial relationship manager and shifted to the CRE side in 2006. 

“Often when a client approaches a large financial organization, they can feel siloed into one group or another, with those groups not communicating efficiently,” Cianfichi said in a statement. “At M&T, we recognize the value of connecting the client to what they need in a coordinated way.”

The CRE innovation office at M&T will feature Lopa Kolluri, a senior vice president who arrives at M&T from HUD, where she served as principal deputy of the Federal Housing Administration. Additional hires for the office include Laura Murphy, a senior vice president, from TF Cornerstone, and Ashley Mitchell from People’s United Bank. She will be a vice president and the new office’s lead commercial segment support analyst.

“We understand the client well because many of us were once the client,” Cianfichi said. “The clients’ needs guide our priorities today and into the future.”

\Andrew Coen can be reached at acoen@commercialobserver.com.