{"id":1004091260,"date":"2014-02-13T13:22:33","date_gmt":"2014-02-13T21:22:33","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004091260"},"modified":"2022-12-07T21:39:25","modified_gmt":"2022-12-08T05:39:25","slug":"fannie-and-freddie-maintain-financing-levels-in-2013","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/fannie-and-freddie-maintain-financing-levels-in-2013\/","title":{"rendered":"Fannie and Freddie Maintain Financing Levels in 2013"},"content":{"rendered":"

Orlando\u2014The potential tapering of Government-Sponsored Enterprises (GSE\u2019s) Fannie Mae and Freddie Mac remains subject to speculation but it has not hindered their multifamily lending activity as preliminary reports indicate that the agencies continued to dominate the multifamily sector with more than $55 billion in financings. However, Jones Lang LaSalle expects national banks, financial institutions, CMBS and life companies to continue to increase their market share in 2014, filling in the gaps where the GSE\u2019s can\u2019t compete.<\/p>\n

While GSE origination volumes declined during the summer months, we expect that Fannie Mae and Freddie Mac maintained close to their 2012 market share of 40 percent in 2013, offering attractive products with as much as 80 percent leverage, but as the economy strengthens, capital is readily available from alternative sources: a trend that is expected to continue in 2014.<\/p>\n

\u201cFannie Mae and Freddie Mac offer extremely competitive pricing and accessibility to plenty of capital which is why they remained highly active in the market 2013,\u201dsays Faron Thompson, who heads up the Atlanta Capital Markets group at JLL. \u201cWe could see the GSE\u2019s reduce their volumes another three to five percent reduction this year, but more importantly, we expect them to have a tighter definition of affordability.\u00a0 Therefore, a certain number of properties at the higher end will no longer be eligible for GSE financing, allowing life companies and others to further enter that space.\u201d<\/p>\n

In 2013, JLL closed nearly $940 million in 135 transactions through its Freddie Mac Program Plus\u00ae lending business and continued its leading output in the approved seller\/servicer territories in the Southeast, the Mid-Atlantic and Texas.<\/p>\n

The firm\u2019s top three Freddie Mac Seller\/Servicer financings completed in 2013 include:<\/b><\/p>\n

    \n
  1. The acquisition financing for EQR Orlando Portfolio in Orlando, Florida that encompassed 2,294 units<\/li>\n
  2. The assumption of University Estates at Austin in Austin, Texas that encompassed 498 units<\/li>\n
  3. The financing for Savannah at Park Place in Savannah, Georgia that encompassed 416 units<\/li>\n<\/ol>\n

    \u201cFannie and Freddie financings will continue this year, but we expect to see more activity from other lenders,\u201d says Holly Minter, executive vice president in JLL’s real estate investment banking practice. \u00a0\u201cIn particular, life companies are allocating increasing amounts of capital toward mortgage debt, and in particular multifamily, and gaining traction among borrowers seeking lower-leveraged deals and floating-rate terms.\u201d<\/p>\n

    According to the 2014 Mortgage Banker\u2019s Association (MBA) survey<\/a> of the top commercial and multifamily mortgage origination firms, 91 percent expect originations to increase in 2014 but from different lenders: 85 percent of respondents anticipated growth of five percent or more of CMBS loans and 60 percent expect a decreased number of financings from Fannie and Freddie.<\/p>\n

    Top-of-mind to investors and lenders alike is the uncertainty of interest rates, reform from Washington D.C. and how the newly instated Volcker Rule will come to fruition.\u00a0 Although interest rates have remained historically low and attractive to lenders, a recent upward trend is anticipated to continue due to the improving economy. However, strong fundamentals surrounding the property sector will continue to keep buyer yield expectations tight, particularly for core product.<\/p>\n

    Both sides of the aisle in Washington D.C. agree that the government needs to taper its support of GSEs. Last year, a 10 percent financing reduction was implemented but no plans for 2014 have been released.<\/p>\n

    \u201cCommercial and multifamily lenders anticipate a market in which lending continues to grow and their firm gets a bigger piece of the pie,\u201d says Jamie Woodwell, MBA\u2019s Vice President for Commercial Real Estate Research.\u00a0 \u201cBorrowers\u2019 appetites to take out new loans are expected to remain strong, but perhaps drop a bit from 2013 levels.\u00a0 The resulting competition to lend leads originators to expect loan risk to increase marginally in the face of moderating returns.\u201d<\/p>\n

    While it remains too early to tell, the Volcker Rule appears to support real estate investment. It has tightened restrictions on speculative investment activities but will permit banks to invest in various vehicles associated with commercial real estate and engage in proprietary trading of bonds backed by Fannie Mae and Freddie Mac.<\/p>\n

    Adds Thompson, \u201cWe expect Fannie and Freddie will explore innovation to their services and modify existing products as much as conservatorship will allow as they adjust to a changing market.\u201d<\/p>\n

    Jones Lang LaSalle Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm\u2019s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients \u2014 whether a sale, financing, repositioning, advisory or recapitalization execution. In 2011 alone, Jones Lang LaSalle Capital Markets completed $60 billion in investment sale and debt and equity transactions globally. The firm\u2019s dealmakers completed $52 billion in global investment sales and buy-side transactions, equating to nearly $216 million of investment trades completed every working day around the globe. In the United States, Jones Lang LaSalle grew its total Capital Markets volumes by 122 percent in 2011 and is quickly gaining market share across all property types. The firm\u2019s Capital Markets team comprises more than 1,200 specialists, operating all over the globe.<\/p>\n

     <\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Preliminary reports indicate that the agencies continued to dominate the multifamily sector with more than $55 billion in financings, says Jones Lang LaSalle. <\/p>\n","protected":false},"author":1138,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825,37753,21742],"tags":[],"class_list":["post-1004091260","post","type-post","status-publish","format-standard","hentry","category-finance","category-research-center-finance","category-latest"],"acf":[],"yoast_head":"\nFannie and Freddie Maintain Financing Levels in 2013 - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/fannie-and-freddie-maintain-financing-levels-in-2013\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fannie and Freddie Maintain Financing Levels in 2013\" \/>\n<meta property=\"og:description\" content=\"Preliminary reports indicate that the agencies continued to dominate the multifamily sector with more than $55 billion in financings, says Jones Lang LaSalle.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/fannie-and-freddie-maintain-financing-levels-in-2013\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2014-02-13T21:22:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T05:39:25+00:00\" \/>\n<meta name=\"author\" content=\"Keat Foong\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fannie-and-freddie-maintain-financing-levels-in-2013\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fannie-and-freddie-maintain-financing-levels-in-2013\\\/\"},\"author\":{\"name\":\"Keat Foong\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/d0cb4c73ef30a522b83905f27b42e634\"},\"headline\":\"Fannie and Freddie Maintain Financing Levels in 2013\",\"datePublished\":\"2014-02-13T21:22:33+00:00\",\"dateModified\":\"2022-12-08T05:39:25+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fannie-and-freddie-maintain-financing-levels-in-2013\\\/\"},\"wordCount\":828,\"commentCount\":0,\"articleSection\":[\"Finance\",\"Finance (Research Center)\",\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fannie-and-freddie-maintain-financing-levels-in-2013\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fannie-and-freddie-maintain-financing-levels-in-2013\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fannie-and-freddie-maintain-financing-levels-in-2013\\\/\",\"name\":\"Fannie and Freddie Maintain Financing Levels in 2013 - 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