16A — June 14 - 27, 2013 — Mid Atlantic Real Estate Journal
www.marejournal.com
C reative F inancing
By Tyler Griffin, Beech Street Capital FHA Reshuffling promises greater efficiency, transparency, and certainty
Y
ou can’t make an om- elet without breaking eggs. Just two weeks
The multifamily reorganiza- tion is part of an even larger restructuring that will close 16 of 80 field offices by the fall and impact 900 employees. How will this affect the mul- tifamily market? In the short- term, hardly at all. The field offices being shut down are all in small markets like Syracuse, Fresno, and Grand Rapids, places that see little multifam- ily underwriting activity in the best of times. In the mid-term, though, there may be some speed bumps as more offices will be consolidated to major metropolitan areas, with those
employees being provided op- tions to relocate. This large of an undertaking will create some hurdles while deals are moved around. In the long-term, we believe that things will—as HUD prom- ises—be better. HUD went through a similar restructuring in 2009 when it concentrated responsibility for nursing home and assisted living financing in the same office that oversees its hospital mortgage insurance. Even more important, HUD adapted the LEANmanagement framework, pioneered by Toyota, to its processes. The result
has been greater efficiency, transparency, and certainty of execution. I think HUD can accomplish the same transformation with its multifamily program. In the long run, this means better delegation because there will be fewer decisions made more consistently by fewer decision makers. This is good news for that subset of multifamily investors with properties that fit the FHA model. Even though the dispar- ity between 10-year and FHA’s 35 year note is not as large as it used to be, the advantages of
FHA financing are still compel- ling. Thirty-five-year amortiza- tion and higher leverage make a lot of good things possible. And having a 3 percent mortgage will seem like a godsend during years 10 to 35 when inflation, as it must, returns. And when it does, some commentators believe, it will run up quickly, given the amount of money the Fed is printing. If you’re looking to vary your portfolio’s maturities, take out equity at low interest rates, or simply restructure debt before rates go up, you should give FHA serious consideration. At Beech Street, we would be happy to help you explore your options, identify your break-even compared to the other available alternatives, and help you find the one that works best for you. We’ve built our business by structuring deals that exceed the expectations of our customers and that remains our priority. Tyler Griffin serves as vice president of originations, focusing on multifamily and commercial real estate debt financingnationwidewithan emphasis on FHA programs. She is based in Beech Street’s New York City office. n DULLES, VA — HFF has closed the sale of Northpointe B & C, a two-building, 83,086 s/f industrial property in Dull- es. HFF marketed the property on behalf of the seller, Velsor Properties, LLC. The property sold for $9.625 million free and clear of debt. The HFF investment sales team representing the seller was led by senior managing director Bruce Strasburg and real estate analyst Samuel Fagelson. “Investors were attracted to Northpointe because it offered the opportunity to acquire a well-leased prop- erty with a strong tenant base in immediate proximity to Dulles Airport’s cargo en- trance. Combined with the capital markets imbalance of scarce supply and strong demand for well-located as- sets, Northpointe attracted substantial interest from the investment community,” com- mented Strasburg. n two-building prop. in Dulles, Virginia HFF closes $9.625m sale of
a g o , HUD announced a subs tant ial consolidation of its multi- family hous- ing program, concentrating underwriting currently con-
Tyler Griffin
ducted in 50 offices in just ten by 2016. The goal, according to senior HUD staff, is to provide greater consistency, speed, ef- ficiency, and at reduced cost.
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