Steve Canty, a business development director at GRS | Corteq, and some other members of the GRS team, recently attended the Mortgage Banker Association’s CREF 2017 multifamily conference in San Diego. Here are his thoughts on where this sector of commercial real estate is headed in the future.
Was the conference upbeat or was there hesitance about how things are moving forward due to the new presidential administration?
Canty: In general, people are extremely upbeat. They really don’t see the Trump Administration as having the industry on its radar over the next year. Fannie Mae and Freddie Mac privatizing is not going to happen very soon under this administration, because he has other issues on the table. People said that as far as 2017 goes, it probably won’t be impacted by the new president.
But there was talk about them potentially going away in the future, right?
Canty: Yes, but that has been going on since 2009, when real estate crashed. That was mainly because of single-family residences, which were a huge majority of the issue. From that perspective, it’s not as if a matter of if it’s going to happen, but more a matter of when. But attendees said it probably wouldn’t happen within the first two years, minimum, of the new presidency. From a multifamily perspective, it’s probably not going to happen any time soon because it is so profitable. The administration might carve it out in some way, and keep it, because it performs so well. Last year, Freddie made $1.6 billion on multifamily profit alone. Trump is a businessman, and he will probably see the value in that.
Overall, there wasn’t a lot of concern. Of the five or six people that I asked, maybe one said that it might be happening in a couple of years, but it’s really a further-out issue.
What were some other hot-button topics discussed?
Canty: There was a lot of discussion about the new green-lending programs they have out for Fannie and Freddie. They really believe that the incentives to be more energy conscious in the multifamily sector will be very enticing to borrowers in the next couple of years. There will be a higher volume of Fannie and Freddie green deals happening this year than ever.
How can GRS guide current and potential clients through this process that you learned at the conference?
Canty: Our ability to diversify with different products will help make their lives easier from a single-order standpoint. It also keeps due-diligence reports consistent across the board. For example, there are a several places where the number of parking places can show up in different reports. If we were doing them all, it would be consistent, as opposed to hiring several firms that have different data that puts pressure on the lender to figure out the amount. If we do them all, they will be consistent across the board.