Posts by David Brickman
David Brickman is the executive vice president for the Multifamily Business. As head of Multifamily, Brickman is responsible for customer relations, product development, marketing, sales, loan purchase, asset management, capital markets, and securitization for the company’s multifamily business, which includes the flow mortgage, structured and affordable mortgage, CMBS and low-income housing tax credit portfolios. The total multifamily portfolio was $180 billion as of March 31, 2013. He is a member of the company’s senior operating committee and reports directly to CEO Don Layton.
Today's a big day: We issued our 80th K-Deal, tallying $100 billion in these commercial mortgage-backed securities (CMBS) since June 2009. Thank you to everyone who contributed to this achievement. It's inspiring and a little dizzying to think about all that this milestone represents – and what's possible from here.
Having recently participated in the string of real estate industry conferences that herald each new year, what still echoes is all of the buzz about the strength of capital flows into commercial real estate, especially the multifamily market. Strong flows of both debt, in the form of mortgage loans, and equity, raised through investors, have created a market that is awash in liquidity. It was the talk of every event.
Apartment properties with five to 50 units make up around 29 percent of the multifamily market and provide affordable homes to a major portion of the nation's moderate- and low-income renters. Given the widening gap between the supply of and demand for affordable rental housing, it's more important than ever to finance these smaller properties. Our new, innovative Small Balance Loan (SBL) offering creates a broad platform for financing loans ranging from $1 million to $5 million and bringing much-needed liquidity, consistency, and stability to this market segment.
Given current trends in renting and multifamily rental-housing inventory, apartment demand should exceed supply for years to come. New construction by itself won't fill the gap. Additional investment needs to be made in existing units to keep them in active inventory. As part of this, there is a growing need to direct "flexible" capital into renovating, preserving, and, in some cases, transforming the nation’s aging rental-housing stock.
Significant debate around multifamily housing policy focuses on the question of whether the federal government should support affordable multifamily rental housing and, if so, how the government should encourage private capital to flow toward it. While important, that question tends to overshadow the equally important, but more nuanced, question of what the need is for affordable housing, how to help meet it most effectively, and what trade-offs come with choosing one policy approach over another. The definition of what an affordable housing unit is, and what makes any given unit affordable – the rent level, tenant, or income level in the surrounding area – is central to the answer.