{"id":1004125584,"date":"2015-08-19T04:02:30","date_gmt":"2015-08-19T12:02:30","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004125584"},"modified":"2022-12-07T05:31:39","modified_gmt":"2022-12-07T13:31:39","slug":"executive-insight-michael-duggan-and-warren-higgins-on-berkadias-fruitful-year","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/executive-insight-michael-duggan-and-warren-higgins-on-berkadias-fruitful-year\/","title":{"rendered":"Executive Insight: Michael Duggan and Warren Higgins on Berkadia\u2019s Fruitful Year"},"content":{"rendered":"

By Ioana Neamt, Associate Editor<\/em><\/p>\n

\"Michael<\/a>

Michael Duggan and Warren Higgins<\/p><\/div>\n

Ever since its inception back in 1994 as GMAC Commercial Mortgage Corp., Berkadia<\/a> has managed to establish itself as a force to be reckoned with in the real estate industry. The company we know today was formed in December 2009, when Berkshire Hathaway entered a joint venture with Leucadia National Corp., and has become one of the largest real estate services firms in the U.S.<\/p>\n

The New York City-based company has been keeping itself busy this year, with deals secured all across the country, in California<\/a>, Texas<\/a>, Washington<\/a>, and Colorado<\/a>, to name just a few. We recently spoke with Berkadia Senior Director Michael Duggan and Head of Mortgage Banking Warren Higgins about the company\u2019s recent activity and its plans for the future.<\/p>\n

CPE: How did you first get into real estate and what drew you to the field?<\/strong><\/p>\n

Duggan: <\/strong>After graduating from college in 1992, I got my start in real estate finance as a loan analyst with Hanover Capital Mortgage Corporation. Hanover had just signed a purchase and sale agreement with Daiwa Securities to deliver closed multifamily loans, which would be securitized by Daiwa and sold off as perhaps the nation\u2019s first CMBS. Having read Michael Lewis\u2019 Liar\u2019s Poker<\/em> as an undergraduate, I was thrilled to be working at the intersection of commercial real estate finance and Wall Street.<\/p>\n

CPE: Berkadia has been very active over the last months all across the U.S.\u00a0 To what do you attribute this boost in activity?<\/strong><\/p>\n

Duggan:<\/strong> The fundamentals of commercial real estate and the multifamily sector in particular, continue to remain strong. With the full support of our parent companies \u2013 Berkshire Hathaway and Leucadia National Company \u2013 we have built a mortgage banking, investment sales and servicing platform that is well-positioned to take advantage of the healthy market. After an incredibly strong start to the year, we are in a position to have a record year with our Fannie, Freddie and FHA loan programs.<\/p>\n

CPE: Based on your expertise, how is the Midwest multifamily real estate market performing by comparison with the Pacific Northwest?\u00a0 If there is a difference, what might be the reasoning behind it? <\/strong><\/p>\n

Higgins:<\/strong> The Midwest market has seen quite a bit of sales and financing activity due to its perception as more of a \u201cvalue\u201d market. Cap rates tend to be higher than in high growth Coastal markets like Seattle, and this has drawn increased deal activity to the Midwest.\u00a0Despite the prevailing wisdom that these markets will have lower future rental growth, buyers and borrowers are attracted to the high cash on cash returns they can generate with today\u2019s low interest rates. In addition, while rental demand and growth may be higher in a market like Seattle, there is also considerable new construction which may limit the immediate rental growth versus most Midwest markets, which have modest new construction pipelines.<\/p>\n

CPE: Berkadia recently <\/strong>closed on the sale of Emerson Lofts<\/strong><\/a>, a Class A apartment community located in Denver.\u00a0 Based on what you\u2019ve seen, what is the current outlook for the area\u2019s multifamily market?\u00a0 What makes it so attractive?<\/strong><\/p>\n

Higgins:<\/strong> The attraction to Denver is that it has strong job growth and population growth, the main drivers of multifamily rental demand.\u00a0Denver job growth was 3.2% in 2014, 1.3% above the national average.\u00a0 \u00a0The 2015 forecast is for 3% growth, another 45,000 jobs. Forbes ranks Denver as the 6th fastest growing city nationally with a 2014 population growth rate of 1.74%.\u00a0 The growth has driven apartment demand – 6300 units absorbed in the past 12 months and 11,700 in the past 24 months. Current apartment vacancy in stabilized buildings is only 4.1%.<\/p>\n

CPE: In your expert opinion, which are the most promising markets for multifamily in the U.S. right now and why?<\/strong><\/p>\n

Duggan:<\/strong> We are seeing incredible demand for multifamily properties in virtually all markets across the U.S. Located in the Midwest; I can say that cap rates are approaching all-time lows in our one primary market, Chicago, as well as our secondary markets such as Kansas City and Minneapolis, and even our tertiary markets such as Peoria, Illinois. There is strong demand for anything multifamily, whether it be a stabilized, value-add or opportunistic play. Given the sales values on existing properties exceeding construction costs, we can expect to see a strong increase in new multifamily developments in many markets across the Midwest.<\/p>\n

CPE: Can you tell us a bit about the company\u2019s upcoming projects? <\/strong><\/p>\n

Higgins:<\/strong> Berkadia\u2019s foundation revolves around its unsurpassed loan origination, investment sales and loan servicing capabilities. We plan on continuing to expand each one of these businesses and feel we are uniquely positioned to do so due to our strong ownership, private \u00a0structure, and talented people. This expansion will be through a combination of organic growth, hiring of top flight outside talent, and selective acquisitions of companies.\u00a0 As a private company with a long term horizon, all of this growth will be focused on sustainability and building a culture focused on excellence and customer service.<\/p>\n","protected":false},"excerpt":{"rendered":"

CPE spoke with Berkadia Senior Director Michael Duggan and Head of Mortgage Banking Warren Higgins about the company\u2019s recent activity and its plans for the future.<\/p>\n","protected":false},"author":757,"featured_media":1004125588,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004125584","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nExecutive Insight: Michael Duggan and Warren Higgins on Berkadia\u2019s Fruitful Year - 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\/executive-insight-michael-duggan-and-warren-higgins-on-berkadias-fruitful-year\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Executive Insight: Michael Duggan and Warren Higgins on Berkadia\u2019s Fruitful Year\" \/>\n<meta property=\"og:description\" content=\"CPE spoke with Berkadia Senior Director Michael Duggan and Head of Mortgage Banking Warren Higgins about the company\u2019s recent activity and its plans for the future.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/executive-insight-michael-duggan-and-warren-higgins-on-berkadias-fruitful-year\/\" \/>\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=\"2015-08-19T12:02:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-07T13:31:39+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/08\/Duggan-Higgins2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"238\" \/>\n\t<meta property=\"og:image:height\" content=\"144\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Veronica Grecu\" \/>\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\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/executive-insight-michael-duggan-and-warren-higgins-on-berkadias-fruitful-year\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/executive-insight-michael-duggan-and-warren-higgins-on-berkadias-fruitful-year\/\",\"name\":\"Executive Insight: Michael Duggan and Warren Higgins on Berkadia\u2019s Fruitful Year - 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