During its first full year as a CMBS originator, investment and advisory firm Greystone completed $700m of loans in 2014.
This year, the firm plans to surpass the $1bn mark, head of Greystone’s CMBS production group, Robert Russell, told Real Estate Capital.
The relative newcomer to the CMBS space is sweeping across the central US states to unlock new opportunities, where there’s an abundance of apartment communities with significant upside potential.
“The agencies are in a deep state of flux, pulling back on leverage and increasing pricing,” Russell said, referring to government-sponsored enterprises traditionally geared towards the multifamily sector.
The GSEs have become less aggressive, financing just 30% of US multifamily loans in 2014, compared with approximately 70% of the total in 2008 and 2009.
“That leaves CMBS as the next viable alternative,” Russell said. “What works best are Class B assets built in the 80s and 90s that are good condition but allow an operator to come in, put in some capital expenditures and receive rent increases.”
If it’s a sign of things to come, Russell originated a $96m, 10-year CMBS loan this week for the acquisition of a six-property, 1,856-unit multifamily portfolio partly concentrated in the Dallas, Texas area.
Greystone has also made two new key hires in its Chicago offices to lead the renewed efforts.
In February, the firm hired Ted Nasca, a former executive with Guggenheim Commercial Real Estate, as managing director. And this week former Royal Bank of Scotland executive Steve Cho, also a managing director, joined the firm.
“Steven and Ted are great complements to each other and they bring new relationships and opportunities,” Russell said.
With these roles filled and growing opportunity across the US, not to mention a $300bn wave of vintage 10-year loans expected to mature between 2005 through 2007, Russell is intent on surpassing his $1bn goal.
“2015 is going to be a big year, and we will have our fair share,” he said.