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In this Issue
 Big Benefits for Smaller Loans – 3Max, Arbor and You
Pipeline Growing for Green Buildings
Commercial/Multifamily Mortgage Debt Outstanding Surpasses
$3 Trillion
Financial Services Committee Passes Section 8 Reform Act
Tip of the Month
Big Benefits for Smaller Loans – 3Max, Arbor and You
By Peter Blass
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| Peter Blass |
Historically, there have been four sources for loans: Banks, conduits, life insurance companies and government-sponsored entities (GSEs). So the question from borrowers needing less than $3 million is, “Why go through Fannie Mae’s 3MaxExpress® instead of using these other traditional sources of capital?”
First, this program was specifically designed for multifamily properties with a loan size of $3 million and under, although the maximum loan size can be extended to $5 million in certain markets across the country. With this specifically created program, a borrower can usually close in 45 to 60 days through an expedited process. As one of Fannie Mae’s original DUS® lenders to offer the 3Max Express® program, Arbor has successfully leveraged its business model to further streamline the process, and, on average, closes this type of transaction within 30 days – significantly quicker than industry standards.
Now fast is good, but the bottom line is cost. Borrowers seeking less than $3 million want the same cost of capital as clients who need $100 million, as the lower the cost of capital, the greater the cash flow and the higher rate of return. The 3Max Express® program gives the smaller-loan borrower just that.
This program is also great for new borrowers who are looking to build a portfolio and are unfamiliar with the commercial real estate closing process.
Peter Blass is a Director in Arbor’s full-service New York City office. He can be reached at 212-389-6550 or at pblass@arbor.com.
McGraw-Hill Projects $29-$59B Green Market by 2010
The green building market is projected to increase to 5-10% of U.S. construction by 2010 totaling between $29 and 59 billion, not including residential remodeling, according to a McGraw-Hill study conducted in 2006. In 2005, Green building comprised approximately 2% of the U.S. construction market for commercial and residential construction, or about $10.2 billion.
Source: McGraw-Hill Construction (MHC), 2006. Market values projected based on MHC construction starts value for 2005 and forecasted starts value through 2010. Figures do not include single-family housing remodeling expenditures.
The real estate industry is beginning to play a major role by initiating sustainability policies for both in-house operations and as investment guidelines. CBRE recently announced it is aiming for carbon-neutrality by 2010 through in-house carbon footprint reductions, indirect emission reduction commitments from suppliers and carbon offsets; Liberty Property Trust, a $4 billion REIT, will only build “green” office buildings from now on, said company Senior Vice President John Gattuso; Pantheon Properties has decided to renovate its entire portfolio to green buildings over the next 12 to 24 months and is also evaluating acquisitions in terms of their ability to be turned green.
Furthermore, recent legislation includes Local Law 86 of 2005, effective January 2007, requires most New York City construction and renovation projects to meet certain standards for green building. Projects that cost over $2,000,000 must achieve a LEED Silver or higher rating. Projects of higher value are subject to more stringent regulations.
Green buildings incorporate a range of “sustainable” systems which preliminary studies have connected to increased worker productivity, reduced absenteeism, energy cost savings increased and retail sales. Sustainable design, systems and operations can increase daylight, improve indoor environmental quality (IEQ), reduce urban heat island effect (UHI) via garden or highly reflective white roofs, reduce/recycle water and waste, and, in addition, facilitate efficient energy consumption, and use alternative fuels.
For more information:
www.twr.com
www.nytimes.com
www.ft.com
www.usgbc.org
www.corenetglobal.org
www.greenbuildingfc.com
Commercial/Multifamily Mortgage Debt Outstanding Surpasses $3 Trillion
By Ingrid Principe
The level of commercial/multifamily mortgage debt outstanding rose by 2.5 percent in the first quarter, exceeding $3 trillion for the first time, according to the Mortgage Bankers Association (MBA) analysis of the Federal Reserve Board Flow of Funds data.
The $3.001 trillion in commercial/multifamily mortgage debt outstanding recorded by the Federal Reserve, was an increase of $72.4 billion from the fourth quarter 2006. Multifamily mortgage debt outstanding grew to $741 billion, an increase of $11.8 billion or 1.6 percent from the fourth quarter. Commercial banks continue to hold the largest share of commercial/multifamily mortgages, with more than $1.3 trillion, or 43 percent of the total.
“Looking just at the multifamily market, CMBS, CDO and other ABS issuers were responsible for a full 70 percent of the growth,” said Jamie Woodwell, MBA’s Senior Director of Commercial/Multifamily Research. “Overall, issuers of CMBS, CDO, and other ABS were responsible for almost 60 percent of the increase in commercial/multifamily mortgage debt outstanding,”
For more info, please visit www.mortgagebankers.org
Financial Services Committee Passes Sect 8 Reform Act
The House Financial Services Committee passed the Section 8 Voucher Reform Act of 2007 in late May by a bipartisan margin of 52 to 9. According to the Committee, this legislation will streamline the Section 8 funding formula, revise the rent calculation process to expand work incentives and reduce administrative costs. It will also increase flexibility to use vouchers for homeownership, amend voucher targeting rules to increase voucher opportunities for lower income working families in rural areas, and authorize an expansion in the number of families receiving vouchers by 20,000 a year for each of the next five years.
The full committee also voted to adopt Rep. Maxine Waters’ (D-CA) Managers' Amendment, providing for the following provisions:
- Using vouchers for the purchase of manufactured homes
- Protecting vouchers reserved for persons with disabilities
- Breaking the cap on the number of families a housing authority can serve
- Voucher reserves
- Portability
- Family self-sufficiency coordinators
- More accurate market rent and funding adjustments
- Housing innovation program
For more information, click here to see the report in its entirety.
Tip of the Month
Want more than three months to pay off your debt without a prepayment penalty? Use the Fix + 1 product offered by Arbor/Fannie Mae. This allows for a 12-month payoff period without any prepayment penalty.
For more information, contact Brian Cronin, Director, at 212-389-6547 or at bcronin@arbor.com.
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| Flexible. Innovative. Creative. |
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Arbor is a national, full-service real estate investment firm focused on executing the highest level of expertise in order to provide clients with the most expansive, creative, and flexible range of lending products in the real estate finance industry. At Arbor, employees approach business in a results-oriented, decisive manner, striving to serve its customers quickly and efficiently while offering a boutique of unique product lines that distinguishes the company from traditional lending firms.
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Come see us at:
June 19-20, 2007
2007 Historic Tax Credits Conference
Philadelphia, PA
June 27-28, 2007
Buildings NY
New York, NY
June 28-30, 2007
NAA Educational Conference and Expo
Las Vegas, NV
July 11-12, 2007
ICSC’s New England Idea Exchange
Boston, MA
July 18-19, 2007
ICSC’s Michigan Idea Exchange
Novi, MI
July 23-26, 2007
2007 NMHC Executive Leaders Conference (NMHC Board of Directors Members only)
Chapel Hill, NC
August 12-14, 2007
2007 Florida Conference
Kissimmee, FL
 To meet with us at any of these events, give us a call!
1-800-ARBOR-10 and ask for Marketing Specialist, Ingrid Principe or email at iprincipe@arbor.com
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