Berkadia’s Stuart, Weisman on Northwest Drive
- May 27, 2015
By Alex Girda, Associate Editor
With Seattle becoming more and more of a technology-driven city where development depends on the growth of major players such as Boeing, Amazon and Microsoft, and Portland showing up on most lists of cities on the rise, the Pacific Northwest is proving to be an increasingly dynamic region. Increased activity in the multi-family sector means a greater need for financing, which translates into a more diverse range of services provided by companies.
Berkadia, the real estate finance giant that constitutes a joint venture between Berkshire Hathaway and Leucadia National Corp., has experienced the region’s improvement firsthand. Senior Vice Presidents Jeff Stuart and Louis Weisman took time out of their busy schedules to answer our questions regarding the company’s activity in the Pacific Northwest, as well as its national efforts, from the perspective of a top financing provider in a growing market.
CPE: How has Berkadia’s activity in the Pacific Northwest changed over the past few years?
Berkadia: Berkadia’s 2014 production showed significant increases in all product types. In 2014, we achieved outstanding nationwide results, growing to a No. 3 ranking with Fannie Mae, a No. 2 ranking with Freddie Mac and a No. 1 ranking with HUD, making Berkadia the only firm to rank in the top five across all GSE multi-family funding sources among our peers.
Along with this, our growth in the Pacific Northwest has also increased. We have expanded our product offerings to include targeted affordable housing (TAH) multi-family transactions, programmatic joint venture equity, healthcare acquisition and permanent loans, CMBS executions and life company programs. Originations from our Pacific Northwest office are estimated to exceed $200 million across all lending products in 2015.
Total Berkadia production in 2014 was $13 billion and is budgeted to increase to $16 billion across all business lines in 2015. We are very excited about the opportunities for us and our clients.
CPE: Based on what you’ve seen, what is the current outlook for the area’s multi-family market?
Berkadia: Looking forward, the multi-family markets throughout the Pacific Northwest should remain healthy. Berkadia’s investor base consistently expresses strong interest in this area and feels the long-term prospects of these markets are among the most attractive in the nation.
We are financing both core and non-core assets for refinancing or acquisition loans. Our equity platform has considerable interest in value-added and new development opportunities in our markets.
CPE: Do you find that providing financing for assets in the Pacific Northwest area has become easier as the market grows more attractive?
Berkadia: The Pacific Northwest is a highly attractive market for Berkadia. Healthy job growth and a good quality of life are attracting new residents from around the world, many of whom are looking for quality rental housing.
We have fantastic developers offering innovative multi-family concepts, which lead the nation in creativity, sustainability and environmental efficiency. With this kind of innovation and quality asset management, our lending proposition for Berkadia and our investors is very attractive. We are looking to grow and develop more high-quality, long-term relationships with property owners, investors and capital sources.
CPE: Has Berkadia’s approach to the multifamily market changed at the national level?
Berkadia: Our shareholders have a deep commitment to the Berkadia business model and the commercial real estate industry. They are fantastic partners for us and have a holistic view of our business and industry. Berkadia is making significant investments in its platform, technologies and personnel. Our goal is to become the No. 1 lender in the GSE space, reach a top five ranking in life company originations, offer the best investment sales platform, and become a top mortgage loan servicer. We are constantly striving to seek out new opportunities for our clients through competitive financing programs and investment sales executions.
CPE: What are some of Berkadia’s upcoming projects?
Berkadia: Activity in Berkadia’s Pacific Northwest office has been picking up momentum over recent months, and we are working to leverage and continue this traction. We are currently targeting sectors that are primed for growth: affordable housing, industrial, retail, hospitality, student housing and multi-family, among others.
While we saw many successes last year, we are constantly looking for new ways to expand our market reach, strengthen our relationships with lending sources and deliver first-in-class service to our clients.