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It’s a new year and change is in the air. With financial regulation changes sure to come and the recently announced Federal interest rate increases, it’s no wonder mortgage banking and real estate lending is hot on investors’ minds.
This episode, we have Livingston Hessam, who just returned from this year’s Mortgage Bankers Association Commercial Real Estate Finance and Multifamily Housing Convention & Expo.
Listeners will remember Livingston from episode 70, in which he gave us a recap on multifamily mortgage banking and real estate lending from the 2016 conference. Livingston is Vice President of Walker & Dunlop‘s Tampa office. Livingston brings over 12 years of experience in real estate lending and finance solutions to Walker & Dunlop, which just celebrated it’s 80th anniversary.
Livingston offers up a recap of the 2017 CREF/Multifamily MBA Conference and discusses key themes from the past year and the current state of mortgage banking and real estate lending.
What’s In Store for Mortgage Banking and Lending
Agency Annual Caps
- Fannie Mae & Freddie Mac each allocated $36.5 billion for 2017 (same as 2016)
- Certain loans and portions of loans are excluded from the cap (i.e. affordable and green/energy efficient)
- Fannie Mae & Freddie Mac multifamily production totaled over $110 billion in 2016.
- Fannie up 30%, Freddie up 20% from 2015
- Expected to capture 40% of total multifamily volume for 2017 ($50-55 billion each)
Commercial Mortgage-Backed Securities (CMBS Loans)
- Risk-retention regulations put in place in 2016, narrowing amount of CMBS lenders
- Post-election stability, but more selective lending market
- CMBS lenders ramping up bridge-lending
- Life-insurance (50% leverage and under): 125-135 range
- CMBS (75% leverage): 250-280 range
- Agency (80% leverage): Low 200s range
- Federal interest rate sees .25% increase
- Expected to increase to 2.75-3% by end of year
- Trump Administration
- Tax reforms
- Dodd-Frank roll-backs
- Retail lending
- Publix most active retail buyer in FL
- Grocery chains are buying out plazas after lease terms or taking right of first refusal on new lease terms
- Reduced supply of grocery-anchored retail
- Strong retail appetite for real estate lenders
- In addition to his V.P. role at Walker & Dunlop, Livingston is President of the Society of Real Estate Professionals (SOREP). Formerly the Tampa chapter of University of Florida’s Bergstrom Council, SOREP hosts networking events and seminars to professionals and gives back to Florida universities. SOREP focuses on all aspects of the real estate industry and is open to all. Click here for more info.
- Walker & Dunlop offers comprehensive real estate financial solutions for all income-producing properties. For more info, visit Walker & Dunlop website.
- To contact Livingston directly, click here.