CBRE Ranks As Top Fannie Mae DUS Lender in Seniors Housing

WASHINGTON, D.C. — CBRE Multifamily Capital Inc. ranked as the top producer in Fannie Mae’s Delegated Underwriting and Servicing (DUS) program for seniors housing in 2016 with a total of more than $300 million in closings.

“2016 was an amazing year for our CBRE National Senior Housing team,” says Aron Will, vice chairman of CBRE National Senior Housing at CBRE Capital Markets, the parent company of CBRE Multifamily Capital.

“The tremendous relationships we have with both government-sponsored enterprises (Fannie Mae and Freddie Mac) enable us an opportunity to create customized solutions for our borrower clients,” adds Will. “We take anything but a down-the-fairway or cookie-cutter approach to structuring transactions.”

Of the $2.6 billion in seniors housing debt originations CBRE arranged over the last two years, a significant portion stemmed from its GSE business, according to Will.

Fannie Mae LendersFor its part, Washington, D.C.-based Fannie Mae posted a record-setting year in 2016, closing $55.3 billion in multifamily loans. Fannie Mae buys loans from mortgage lenders, bundles them together and sells them as mortgage-backed securities to investors.

CBRE finished third in overall multifamily Fannie Mae lending with $4.8 billion, behind Wells Fargo with $11.7 billion and Walker & Dunlop with $6 billion.

In the seniors housing space specifically, CBRE finished first ahead of second-place Wells Fargo, third-place KeyBank and fourth-place Berkadia.

Despite the record-setting year in multifamily overall, seniors housing lending volume was down significantly for Fannie Mae in 2016, dropping from $2.7 billion in 2015 to $1.5 billion in 2016.

In short, CBRE accounted for approximately 20 percent of all of the organization’s seniors housing loans last year.

“The lion’s share of our seniors GSE business was acquisition financing on behalf of institutional investors,” says Will. “We closed five separate acquisition loans in California with Fannie Mae for various private equity clients, all of which were sizable loans between $15 million and $35 million.”

The drop in Fannie Mae’s seniors housing activity corresponds to an overall drawback in acquisitions in the sector, following record years in 2014 and 2015. The trend is largely credited to a reduction in REIT acquisition activity. Private equity and other sources increased their spending in 2016, but not enough to make up for the REITs.

“Today, private equity is far more relevant than 24 months ago, having filled much of the void of the REITs who were dominant in years past,” says Will. “Although there may be less overall volume in our space, more seniors housing buyers are users of secured debt today, which bodes well for GSE lenders and debt intermediaries like CBRE.”

In addition to its $4.8 billion in Fannie Mae multifamily lending, CBRE also originated $10.6 billion in Freddie Mac loans, making CBRE the largest GSE lender in the United States, according to Will.

Will predicts “another robust year in 2017” in seniors housing lending, but suggested total acquisition volume will again fall short of the 2014 and 2015 peaks.

— Jeff Shaw

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