Greystar Real Estate Partners will be providing senior loans, mezzanine loans and preferred equity to owners and developers of residential rental properties throughout the United States as the global real estate company expands its capabilities to include a direct multifamily lending platform.
Greystar, a Charleston, S.C.-based company that develops, manages and invests in high-quality real estate including logistics and life science properties, will focus its direct financing services on multifamily properties in urban and suburban markets throughout the U.S. with an emphasis on markets where the firm has experience.
Wes Fuller, executive managing director & global leader for Greystar’s investment management business, noted Greystar established its credit business in 2018 and has invested nearly $1.5 billion across the continuum of debt instruments collateralized by multifamily assets. Because of that experience, he said in prepared remarks that Greystar is well positioned to provide capital solutions directly to property owners and developers. Fuller said they will be able to further leverage the knowledge and experience gained from operating the firm’s integrated platform to better serve borrowers in need of financing.
A team of credit professionals with an average of 17 years of individual experience will be leading the Greystar loan origination services platform. They will be providing direct financing solutions that will solve near-term requirements but also have the flexibility and capacity to accommodate evolving needs across the capital structure, Kevin Kaberna, executive director & leader of Greystar’s investment management platform in North America, said in a prepared statement.
Brett Lashley, managing director & leader of credit at Greystar, noted in prepared remarks that the lending decisions will be driven by access to extensive data and analytics and deep insight into every major domestic market. Lashley said those capabilities combined with an institutional appreciation for the complexities involved in operating multifamily assets will enable the Greystar team to efficiently underwrite and execute loan originations on behalf of the borrowers.
Slowing lending market
Greystar’s expansion into multifamily lending comes at a time when rising interest rates and continuing inflation are slowing multifamily borrowing and lending activity for the second half of 2022. After a record start to the year, the Mortgage Bankers Association updated its baseline MBA forecast for the remainder of 2022 and expects multifamily lending to drop to $436 billion, down 10 percent from last year’s record of $487 billion. If the economy enters into a recession, MBA expects borrowing and lending to be further constrained in early 2023.
The good news, though, is multifamily fundamentals remain strong, and MBA and other industry experts expect loan demand to bounce back next year. Multifamily remains a favored investment class that has continued to perform well.
Meanwhile, Greystar is not the only entity expanding multifamily lending services in recent months. In August, the Community Preservation Corp., National Equity Fund and Cinnaire became partners in CPC Mortgage Co. to create the industry’s only impact-driving multifamily mortgage lending platform while expanding and preserving affordable and workforce housing.
Also in August, Newpoint Real Estate Capital expanded its affordable housing lending platform through a partnership with Morgan Properties. The companies launched a proprietary platform to providing additional lending options for affordable housing projects.