Deals & Dealmakers

Bankers reveal what keeps them up at night

The market for multifamily housing should remain strong through the end of 2015, but global events and shifts in U.S. government policies retain their power to throw markets into disarray.

That was the consensus of real estate veterans attending a panel discussion sponsored by Capital One Multifamily Finance.

Entitled “Multifamily Outlook: Will the Good Times Continue,” the event was held at the Union League Club in New York City. Investors and lenders on the panel repeatedly emphasized the value of market intelligence and analytics as the best way to mitigate risks of uncertainty in this environment.

The event was hosted by Senior Vice Presidents Michael Edelman, Ben Stacks, Scott Swerdlin, and Brian Sykes, and featured experts from government agencies and an investment bank as well as major real estate investors.

Hilary Provinse, Senior Vice President for Multifamily Customer Engagement at Fannie Mae, and Richard Katzenstein, Managing Regional Director for Northeast Production and Sales at Freddie Mac, contributed the government agency perspective.

Lisa Pendergast, Co-Head of CMBS Strategy and Risk at Jefferies and Company, brought an investment bank view. Paul Nasser, Chief Financial Officer and Chief Operating Officer at Intercontinental Real Estate Corporation, and

Michael Bar, Vice President-Finance at T.F. Cornerstone, represented the investor outlook.
Grace Huebscher, President of Capital One Multifamily Finance, began the event with a real-time audience survey of industry sentiment.

A solid majority of the respondents believed that U.S. Treasuries would remain under three percent for the rest of 2014 and remain unchanged or under four percent until the end of 2016.

Panelists echoed these conclusions, citing the global flight to quality and the tentative U.S. recovery as two factors dampening upward pressure on rates.

Panelists and audience members alike expressed their concern that the economic recovery could be derailed by external events. When asked what kept them up at night, the majority of audience members cited the impact of global events or shifts in government policies. In this environment, many panelists emphasized accurate market intelligence as a hedge against those risks that lenders and investors can control.

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