Centerline Capital opens alternative capital division in Vienna

Real estate finance and management firm Centerline Capital Group has formed an alternative capital markets division based in Vienna to arrange debt and equity capital for apartment and other multifamily projects.

The unit expands the capabilities of the New York City-based firm, which originates loans on behalf of agencies such as Fannie Mae, Freddie Mac and the Federal Housing Administration.

Loading...

Comments

• Weigh In
• Corrections?

Loans will range from $10 million to in excess of $100 million. The unit will offer fixed- and floating-rate senior loans, equity, mezzanine debt and bridge financing. Centerline, with seven offices nationwide, will provide the bridge financing through its relationship with commercial mortgage company C-III Capital Partners.

“When we were doing pure agency business, there were situations where we were losing transactions to life-insurance companies, banks and commercial mortgage-backed securities [lenders],” said Kevin Smith, who heads up the new division.

Those capital sources jumped back into multifamily lending late last year, having left government-sponsored enterprises like Fannie Mae to hold up the market during the downturn, he said.

“There’s been a tremendous upswing in multifamily activity from acquisitions, dispositions, refinancings as well as development activity,” he said. “This has been a stellar year for the sector in all facets.”

The number of loans originated for apartments was up 114 percent to 143 loans in the second quarter of 2011 compared to the same period a year earlier, according to the most recent survey from the Mortgage Bankers Association. The trade group tracked a 58 percent increase in loans for government-sponsored enterprises.

Smith said the shift away from homeownership toward renting has in part spurred the demand for rental properties. That demand has lured more apartment complex investors and developers back into the market.

Analyst Bose George of Keefe, Bruyette & Woods expects to see some expansion from existing firms, similar to Centerline’s move. “There is definitely interest in this space,” he said. “The longer things remain weak in the economy, the longer this space remains in a sweet spot.”