New York City Tri-State Area: ‘Fannie’ & ‘Freddie’ Not Only Good For Golf
- May 18, 2009
With next month’s U.S. Open back in nearby Bethpage, New York, it seems timely to consider how real estate, like golf, needs good support to create high performance over a career. Knowledgeable golfers understand the importance of Fanny Suneson, the caddie, who supported and guided Nick Faldo during his four major championships and who recently supported Henrik Stenson during his win at the Player’s Championship, golf’s “fifth major”. Additionally, “Freddie” Couples is known for his calm demeanor during stressful rounds and his clutch performances that have propelled him to captain of the American team during this fall’s Presidents Cup.
For those who do not play golf, or deal regularly with multifamily assets, the connections of “Fannie” and “Freddie” in both golf and the investment real estate industry may be missed. The competitive programs offered by Fannie Mae and Freddie Mac have buoyed the multifamily asset class and have allowed multifamily buyers to purchase at still attractive yields. These programs offer up to 80% LTV, some interest-only financing, and sub 6% interest rates, which office, industrial and retail buyers are no longer able to achieve. We recently closed a $42 million, 436- unit apartment portfolio sale in suburban Hartford, Connecticut, using this debt platform and will seek similar financing options for four separate multi-family deals (1,561 total units) we will be brining to market at the end of this month.
The Freddie Mac and Fannie Mae platforms, especially the fixed rate programs of Fannie and the capital market ARM programs of Freddie will continue to play pivotal roles, guiding and stabilizing prices similar to impact their golfing counterparts have had on the game.