CWCapital Expands West Coast Presence

By Barbra Murray, Contributing Editor

CWCapital’s new Los Angeles office represents a big step for the Boston-based  lender to the multi-family and healthcare real estate industries, which set its sights on creating a strong West Coast multi-family lending presence a couple of years ago and entered the market last July.
 

“We had significant FHA and HUD business on the West Coast, but we were starting to do a significant amount of GSE business,” explained president & CEO Michael Berman. With an eye toward making that business much bigger, the company hired real estate industry veteran Trevor Fase Jr. to head the new locale. “The West Coast should be 35 to 40 percent of our business. We wanted to build the Freddie Mac and Fannie Mae operations on the West Coast, and Trevor is an expert,” Berman observed. Fase’s 15-year commercial real estate history includes a stint as vice president for PNC ARCS, where he originated a whopping $750 million in Fannie Mae and Freddie Mac business in 2009 alone.

Fase will be joined at the new Los Angeles office by senior underwriter Tami Warner, with additional staff members soon to augment the team. “We’re hiring on the West Coast specifically, but we are doing significant hiring around the country,” Berman noted.

The company made its entrée into the West Coast market with the July 2009 acquisition of assets of Sierra Capital Partners, which gave it an instant lending platform in Irvine, Calif. Its plan to expand its multi-family business nationally, though conceived in 2007, comes at a good time. While the multi-family sector has certainly been bruised by the recession and staggering unemployment, it is poised for a turnaround. As the economy improves, Berman said, the demand will come from the creation of new households by young adults who delayed leaving the nest due to the brutal job market, the growing immigrant population and households that had doubled and tripled for financial reasons.

“We believe multi-family is the first asset to recover as we come out of a down market, and we’ve already seen it,” he said. “There’s no new construction and we’re losing 100,000 units a year to obsolescence. In addition to that, there’s a huge demand from buyers; we’ve seen that increase over the last three to six months. Transactions are starting to happen. At one point, you were seeing only four or five bidders; now you’re seeing 15. Cap rates have decreased 50 to 100 basis points in the stronger markets, and as cap rates compress, sellers are more willing to sell. So we’re positioning ourselves to take more of the market share.”