Beech Street Sees Jump in DUS Lending

Beech Street Capital LLC reports that the company is now the nation's number-three Fannie Mae DUS lender, with its multifamily financing volume spiking in 2011 to $2.2 billion. The company's volume with Fannie Mae more than doubled last year.

Bethesda, Md.—Beech Street Capital LLC reports that the company is now the nation’s number-three Fannie Mae DUS lender, with its multifamily financing volume spiking in 2011 to $2.2 billion. The company’s volume with Fannie Mae more than doubled last year.

The climate, it seems, is just right for multifamily finance. Last year was a busy year for Fannie Mae DUS lenders, including Beech Street. As the demand for rental housing increased in 2011, the GSE and its lender partners provided $24.4 billion in debt financing for 2,763 mortgage loans. Moreover, most of that financing involved relatively modest properties. According to Fannie Mae, about 89 percent of the 422,799 multifamily units financed by the company in 2011 were affordable to families at or below area median income levels.

The rapid expansion of multifamily finance has also allowed private companies such as Beech Street to expand their geographic reach, since apartments are in demand in most every U.S. market. Last year, Beech Street expanded its geographic footprint and is now servicing loans on properties in 27 states. In the course of the year, the company strengthened its New York office, opened an additional office in California, and added personnel to its office in Chicago.

Beech Street expects further expansion in 2012. Declining home ownership and favorable demographics have pushed down multifamily vacancy rates and driven up rents, making the sector an attractive option for investors, notes the company. Agency securities have been the beneficiary of the flight to quality, allowing for tighter spreads and that, with record low treasuries, has set borrowing rates at historic lows.

“In 2011 we continued to invest in our most important asset, people, and we now have over 85 employees,” a spokeswoman told MHN. “This year we will continue to invest as needed to enhance our origination, risk management and servicing capabilities. In 2012, we look forward to expanding our presence in existing markets, along with new ones as good opportunities arise.”