Lenders Favor Apartments Over Single-Family Homes

Banks are lending big money to apartment developers. In 2013, lenders provided $172.5 billion in new mortgages for apartment buildings. This is a 18 percent increase since 2012. The Mortgage Bankers Association report stated 2014 is on the same pace as 2013 lending. The top five multifamily lenders in 2013 by dollars volume were JP Morgan Chase, Wells Fargo, PNC Real Estate, CBRE Capital Markets, Inc. and KeyBank.

Both JP Morgan and Wells Fargo reported dramatic drops in residential mortgage lending to consumers compared to the same quarter in 2013. With residential lending down, the bigger banks are desperate for loans and become very aggressive on multifamily projects. Multifamily starts are up 18.5 percent while single-family housing starts are up 1 percent between August and September.

Millennials are one reason behind the multifamily surge. It’s becoming more difficult to buy their first home causing people to rent longer. The multifamily segment is surrounded by high rents, low vacancies and increased popularity making it very attractive to lenders. 

 

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Nick Banks

Nick created Front Street Commercial Real Estate Group in 2002 and spent the first eight years developing and acquiring office and retail projects in South Florida as well as North Central Florida. In 2010 the focus of the firm was shifted to primarily serve third party clients and perform brokerage, property management and mortgage banking functions. Nick has personally developed and acquired nearly 200,000 square feet of office and retail properties in markets throughout Florida. Prior to founding Front Street, Nick was the Director of Finance and Dispositions for Stiles Corporation in Fort Lauderdale where he financed and sold over $500 million in commercial real estate. Before joining Stiles, Nick was an Associate Director at GE Capital Real Estate where he sourced over $200 million in financing throughout Florida. Nick is a graduate of the University of Florida with a degree in Finance and a concentration in Real Estate. He serves as a board member and current vice-chair for the United Way of North Central Florida where he also chairs the Development Committee. Nick is actively involved with the Gainesville Area Chamber of Commerce where he serves as a board member and committee member for the Council for Economic Outreach. He is also a recent graduate of Leadership Gainesville which is a year long leadership program hosted by the Chamber. He is a member of Grace United Methodist Church where he has served as finance chair and as a member of the leadership council. Nick serves as an advisory board member of the University of Florida Bergstrom Center for Real Estate Studies. Nick was recently named chair of the Gainesville committee for the North Florida chapter of Urban Land Institute (ULI). He is a licensed real estate broker in the State of Florida and is a long time member of the International Council of Shopping Centers.

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