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Friday, 10 November 2017

Freddie Mac on Way to Another Record-Breaking Year of Lending, Securitization

Freddie Mac's multifamily operation is well on its way to another record-breaking year, in terms of financing and securitization activity. So far, it has issued $50.4 billion of bonds backed by loans against apartment properties - approaching the $51.2 billion it had securitized last year, when it funded a record $56.8 billion of loans.

Commercial Real Estate Direct Staff Report

Freddie Mac's multifamily operation is well on its way to another record-breaking year, in terms of financing and securitization activity.

So far, the housing-finance agency has issued $50.4 billion of bonds backed by loans against apartment properties. That's approaching the $51.2 billion it had securitized last year, when it had funded a record $56.8 billion of loans. The fourth quarter typically is the agency's busiest, so it's a sure bet that last year's levels will be topped this year.

While the agency's regulator, the Federal Housing Finance Agency last year had set a $36.5 billion cap for originations, loans against properties deemed affordable are exempt from the cap.

The year started out slowly, in part because growth in fundamentals in the apartment sector had started to slow. That has translated to weak property-sales volume, which drives much lending activity.

Real Capital Analytics reported that despite a 4 percent increase in sales for the third quarter, year-to-date sales volume for apartment properties remained 9 percent below that of last year. That compares with an 8 percent decline in overall property sales volume.

But lending activity at Freddie picked up as the year went on. Some investors turned to the agency to finance large portfolios or large properties. A case in point: Morgan Properties refinanced 14 of its properties in Maryland, Pennsylvania and the Carolinas with $516.5 million of Freddie financing provided by PGIM Real Estate Finance. The financing was securitized through a stand-alone deal. Also, a venture of Moinian Group and SL Green Realty Corp. turned to Greystone for $550 million of permanent Freddie financing against the Sky Residences, a luxury apartment building in Manhattan that includes a 25 percent moderate- and affordable-housing component. The deal was innovative in that Freddie bought outstanding bonds that had been issued by a Housing Finance Agency and placed them in a...





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  • Breaking mortgage, CMBS, and REIT news

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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2016
Investment Bank #Deals Vol$mln MktShr%
JPMorgan Securities 14.94 10,350.16 15.14
Deutsche Bank 14.21 9,926.60 14.52
Wells Fargo Securities 13.36 9,513.96 13.92
Citigroup 10.87 8,061.79 11.80
Goldman Sachs 10.05 7,563.72 11.07

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2016
Lender #Loans Vol$mln MktShr%
JPMorgan Chase Bank 133.67 8,670.33 13.34
Goldman Sachs 156.20 7,418.37 11.41
Deutsche Bank 178.17 6,510.75 10.02
Citigroup 184.41 5,512.20 8.48
Morgan Stanley 113.18 4,130.53 6.35

 

 

 

REITCafe

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  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
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