Posts by David Brickman
David Brickman is executive vice president and head of the Multifamily Business. He leads all aspects of Freddie Mac's Multifamily business - one of the largest capital providers to the US multifamily rental housing market. He is a member of the company's senior operating committee and reports directly to CEO Don Layton.
Amid all of the fuss about Millennials, let's remember that our population on the whole is aging. Among the many repercussions: We'll start to see explosive growth in the need for housing that offers affordability, accessibility, support services, and community over the next 10 to 20 years. Once it hits, it'll continue for years. We'll need to start preparing for the coming wave and taking advantage of opportunities it presents.
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.