About Our Office

Our Dallas office, with average annual production volume of more than 150 transactions, provides a complete range of debt and equity options for all types of commercial real estate financing. We are Freddie Mac and Fannie Mae specialists in addition to being correspondents for more than 30 life insurance companies. We routinely arrange equity for both the acquisition of existing properties and for the development of new construction. Call our local office to learn more.

Production Team

  • Filter By:

{{employee.name}}

{{employee.job_title}}

{{employee.office.city}}, {{employee.office.state}}

{{employee.office.name}}

{{employee.office.address_01}}

{{employee.office.address_02}}

{{employee.office.city}}, {{employee.office.state}} {{employee.office.zip}}

{{employee.employee_email}}

View All Dallas Employees

How to Maximize Green Loan Savings

Green loans can offer big savings to multifamily property owners in Texas, but only if utilized properly

Few trends have had bigger impacts on multifamily financing over the past few years than the movement to reward green upgrades. Both Fannie Mae and Freddie Mac have programs that reward borrowers with interest rate discounts and proceed benefits if they make upgrades that save between 15 to 20 percent in water and/or energy usage. By making these upgrades, borrowers can realize significant savings on interest rates of agency loans, lower utility costs and possibly increase proceeds by an additional 5 percent.

However, many factors make it difficult to wait to make energy and water upgrades until the agency loan has been received. Moreover, in Texas, many municipalities are providing incentives to install new toilets or watersaving features, making it affordable for the current owner to implement such upgrades soon after acquisition.

According to the Federal Reserve Bank of Dallas, between 2005 and 2016 the Dallas-Fort Worth area saw net migration of 838,501 people; Houston saw net migration of 815,799 people during the same period. This heavy population growth has prompted state and local officials to look for new ways to conserve water while meeting demand from new residents. To do this, municipalities are approaching multifamily property owners, particularly owners of Class B and C assets, about using water more efficiently.

Furthermore, as cap rates have tightened and loan proceeds have reached lower leverage points in Texas, bridge loans for multifamily deals have become popular structures for acquisitions. And as more bridge loans are sought for acquisitions of Class B and C properties — which are prone to chronic energy and water issues — the question of when green upgrades should be made becomes integral.

The answer: as part of a refinancing or at the time of sale.

Timing Is Everything
It is crucial to make green upgrades at the right time. The purpose of getting the lower rate and extra proceeds on your Fannie or Freddie loan lies in the idea that the agency loan is the catalyst for making these green upgrades in the first place. You are thus unlikely to be rewarded for green upgrades made prior to the closing of the agency loan, beyond getting the property energy-certified by an approved rating agency.

Waiting can be difficult on bridge loan acquisitions, since a major benefit of bridge loans involves the ability to roll capital expenditure dollars into the loan amount. Often a bridge loan is computed as a percentage of the total cost of the acquisition and the value is determined on an as-stabilized basis. Thus, you can get these proceeds up front for many renovations.

This presents a tough choice: you can get money up front to make renovations, but you may not get rewarded later with your agency exit. The key is to know whether you’re going to refinance later with an agency loan or sell.

If you plan to sell, showcasing available water or energy upgrades from which the buyer can benefit may be a selling point. Traditionally, water upgrades are the least expensive to make, so marketing the absence of low-flow toilets or faucets will appeal to buyers.

In Texas, this appeal has been heightened, with many cities ready to offer incentives for water upgrades. For example, Dallas offers a $90 rebate for each high-efficiency toilet installed on units built before 1994. New Braunfels offers a $350 rebate for a conversion to drought-tolerant landscaping and San Antonio offers free, high-efficiency showerheads and faucet aerators.

These features allow new owners to not only reap the benefits of green programs, but to also recoup the costs of upgrades prior to the end of the loan term, resulting in long-term savings for the buyer.

Going the Certification Route
Should you make both energy and water upgrades prior to selling, you may want to consider getting your property certified for energy efficiency. Getting a certification from a pre-approved company can also yield a lower rate for you and your future buyer.

Usually, the easiest certifications to achieve are Green Globes or Energy Star, both of which require owners to enter energy data into an online assessment, giving an indication of how close the property is to attaining certification. The two programs have different metrics for scoring water and energy upgrades, so it’s good practice to evaluate both.

Many investors recognize the benefits of going green and intentionally target upgrade opportunities on property tours. Should you become certified, your future buyer will qualify for the interest rate reduction, making your property more marketable.

Considering the bigger picture is critical when making green upgrades, and having an experienced mortgage banker by your side can help maximize your returns. Understanding of the programs offered by your municipality can also be a great selling point to a buyer and can reduce the cost of the upgrades needed to qualify for the agency green programs.

A strong acquisition strategy is vital, and knowing how to capitalize on opportunities in the debt markets is equally as important.

In the words of ancient Chinese military strategist Sun Tzu, “Strategy without tactics is the slowest route to victory, and tactics without strategy is the noise before defeat.”

Show More

Phillip Bankhead featured in Texas Real Estate Business

Phillip Bankhead

Phillip Bankhead

Phillip Bankhead, senior vice president/senior director of NorthMarq Capital’s Dallas regional office, was recently featured in an article titled “Urban Dallas Faces Shortage of Retail Space” that appeared in the October edition of Texas Real Estate Business. The story focuses on rising rents/growing volumes of investment sales and capital lending for retail properties in Dallas that are heightening competition for quality space inside the 635 loop. And while many cities are worrying about e-commerce and digital sales platforms, Dallas is facing an old-fashioned  retail dilemma: How to find more locations and sell more product. Read the full story here.

Show More

Considering Crossing the Bridge to Green? Know the Potential Ramifications of Making Green Upgrades Prior to Your Agency Loan

By: Carl Pankratz

Few things have had a bigger impact on multifamily finance in the past few years than the movement to reward green upgrades. Both Fannie and Freddie have programs that reward Borrowers with interest rate and proceed benefits if they’re willing to add property enhancements that save either energy or water. However, as cap rates tighten and loan proceeds reach lower leverage points, bridge loans have become popular structures for property acquisitions. As more bridge loans are sought for the acquisition of Class B and C properties,  which are prone to chronic energy and water issues, the question becomes when green upgrades should be made: as part of a refinance or at the time of sale.

As a quick overview, both Fannie and Freddie offer big benefits for going green. Both agencies require a Borrower to make upgrades that will save either 15-20 percent in water or 15-20 percent in energy usage to qualify for the program. By making these upgrades, the Borrower can realize significant savings on the interest rate of an agency loan, lower utility costs, and possibly push proceeds an additional five percent.

Timing Is Everything
It is strategically important to make green upgrades to your property at the right time. The purpose of getting the lower rate and excess proceeds on your Fannie or Freddie Loan is the contemplation that the agency loan is the catalyst for making these green upgrades. Therefore, you will likely not be rewarded for the green work you do prior to closing your agency loan, outside of getting your property energy certified by an approved rating agency.

On bridge loan acquisitions, waiting can be difficult since one of the major benefits of a bridge loan is the ability to roll your capex into the loan amount. Often a bridge is computed as a percentage to the total cost of the acquisition and the value is viewed from an as-stabilized basis. Thus, you are able to get these proceeds up front to make many of the renovations. This really presents a tough choice: you are able to get money up front to make the renovations, but you may not get rewarded later with your agency exit. The key is knowing whether you’re planning to refinance later into an agency loan or to sell the asset.

If you’re planning to sell the property, showcasing available water or energy upgrades from which the buyer can benefit may be a selling point. Traditionally, water upgrades are the least expensive to make, so marketing that you haven’t installed low-flow toilets or changed the faucets will appeal to buyers. The installation cost could be recuperated prior to the end of the loan term, resulting in long-term savings to the buyer.

Going the Certification Route
Should you make both energy and water upgrades prior to selling, you may want to consider getting your property certified for energy efficiency. We have mostly discussed the upgrades needed to qualify for the green benefits, but getting a certification from a pre-approved group can also yield a lower rate for you and your future buyer. Usually the easiest certifications to achieve are Green Globes or Energy Star—both have websites that describe the process. Should you get a certification, your future buyer will qualify for the interest rate reduction, further making your property more marketable. Many investors know the benefits to going green and are intentionally looking for upgrade opportunities on property tours. Thus, leaving some of the opportunities available can be a good marketing opportunity to attract a future buyer.

Be Strategic About Upgrades
It is very important to consider the bigger picture, and having an experienced mortgage banker by your side can maximize your gains on an asset. Knowing if you plan to exit via selling the asset or refinancing via agency can have significant implications on whether to make all your upgrades upon acquisition. Considering you can achieve significant savings on an interest rate, reserving your green upgrades for the agency loan can be a benefit financially. However, saving energy upgrades for the next acquisition can be a good marketing opportunity in selling the asset. If you have to sell the asset soon after originating the agency loan, at least the loan being assumed will have a good rate. A great acquisition strategy is vital, and knowing how to capitalize on opportunities in the debt markets is equally as important. In the words of Sun Tzu, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”

Show More

Ample capital drives growth in manufactured housing

As we turn the page on another successful Manufactured Housing Institute National Congress and Expo, several themes are emerging.

From the amount of capital in the market to the changes in the government agencies to continued reforms in financing for chattel, or homes, the industry of manufactured housing heads into the second half of 2017 with substantial momentum, thanks in part to a number of new entrants in the market.

A few statistics shared at the conference reveal the interest in the manufactured housing industry as a whole. First, this conference saw the most attendees for a National Congress and Expo since 2007. Second, the first quarter of this year has already seen a 23 percent increase in housing shipments over last year, with year-over-year increases of around 17 percent.

There are likely a few reasons for this increase. But above all else, capital is plentiful, fueled by heightened interest in the industry in the private equity and REIT space, as well as low interest rates.

With so much capital comes more interest. This interest has led to less ownership by traditional “mom-and-pop” entities and more competition, thus lower cap rates. In some regions, parks trading with sub-5 percent cap rates are seeing multiple offers. For parks with more than 150 pads, the competition is even more fierce, as those have traditionally been targets for REIT and private equity interest.

Also fueling this competition is the very attractive debt offered by both Fannie Mae and Freddie Mac. Around three years ago, Freddie made a big push into financing manufactured housing communities
via its ability to look at 3-star communities.

With this product, Freddie was able to work with community owners who didn’t have a “4 star” or higher rating to qualify for Fannie Mae loans, or those who previously only used CMBS debt for their non-recourse needs.

Likely viewing the success by Freddie in this space and seeing the continued need, Fannie reviewed its standards and dropped requirements to make its loans very competitive from an underwriting standpoint. Changes included removing the need to have 50 percent of the pads be “double-wides,” allowing this product into its small balance loan program and enabling more “3 star” parks to be considered. Now, more park owners have two great options with the agencies.

The biggest barrier to entry made by both agencies continues to be a restriction on the amount of park-owned homes. Fannie now allows the proportion of park-owned homes on acquisitions to be as high as 35 percent. However, the standard for both agencies continues to be around 25 percent.

This limitation on park-owned homes hinders the ability of some communities to take advantage of this financing. Thus, there is still a strong need for CMBS, bank and other capital sources.

Capital sources are plentiful in financing communities, but lack of financing of options for chattel, aka homes, continues to be a drag on the industry. For families looking to finance an individual manufactured home, lending rates continue to climb, leaving fewer options. However, positive trends seem to be emerging to relieve this burden, with both Fannie and Freddie having released their latest duty to serve plans.

At the conference, representatives from both agencies recognized the need for a secondary market to trade in chattel and are looking for ways to best accomplish this feat. Although this is not being done as fast as some would hope, the recognition and movement to establish lending parameters is a good start.

The industry looks strong as we enter the second half of 2017 and beyond.

 

 

This article originally appeared in the July 2017 edition of Texas Real Estate Journal. See it here.

Show More

Ruth Davis joins NorthMarq Capital’s Dallas office as vice president

DALLAS (May 9, 2017) – NorthMarq Capital, a leader in financing commercial real estate throughout the United States, announced today that Ruth Davis has joined its Dallas regional office in the role of vice president.

In her new role at NorthMarq, Davis will focus on sourcing debt and equity opportunities for all product types throughout the country. Davis comes to the Dallas team after three years with Dougherty Mortgage, where she originated loans on a national level for seniors housing and multifamily properties. Prior to Dougherty, Davis specialized in healthcare brokerage at Swearingen, preceded by healthcare and commercial valuation/consulting at Integra Realty Resources. Prior to Integra, Davis was the senior managing director at Landauer/Grubb & Ellis preceded by valuation/consulting services at Cushman & Wakefield.

In the community, Davis is involved with numerous professional organizations, including CCIM Dallas Chapter, REFEA (Real Estate Financial Association), Executive Women’s Healthcare Alliance, NIC (National Investment Center for Senior Housing), ASHA (American Senior Housing Association) as well as Dallas Real Estate Ministries (DREM), Wisconsin Real Estate Alumni & Honorary Member of the Aggie Real Estate Network. Davis is a past president of REFEA and served on the Board of Directors of CREW Dallas.

“We are pleased to have Ruth join the NorthMarq team,” said Jeff Erxleben, executive vice president/regional manager based in NorthMarq’s Dallas office. “Her extensive experience with seniors housing and multifamily coupled with our expanded scope of direct financing options, will allow her to bring creative solutions to our client relationships.”

Davis earned both a Bachelor’s degree in Real Estate and Urban Land Economics and a Master’s degree in Real Estate Appraisal and Investment Analysis from the University of Wisconsin-Madison. She also earned the MAI designation and has an active Texas Real Estate salesperson license.

Show More

National Multifamily Housing Council names Carl Pankratz to Emerging Leaders Committee

NorthMarq Capital Dallas office vice president Carl Pankratz was welcomed to the 2017 National Multifamily Housing Council’s Emerging Leaders Committee during the organization’s annual meeting. Members of the Emerging Leaders Committee take on numerous responsibilities while serving, including producing national/regional networking events, suggesting programming from NMHC meetings and providing forums for participants to meet, network and learn from top industry leaders.

Check out the full list of members here.

Learn more about Carl Pankratz.

Show More

NorthMarq Capital announces Steve Whitehead as managing director of its Dallas office

DALLAS (January 10, 2017) – The Dallas-based regional office of NorthMarq Capital is proud to announce the promotion of Steve Whitehead to senior vice president/managing director. In his new role, Whitehead will manage the Dallas office’s production for insurance companies, agency lenders Freddie Mac and Fannie Mae, CMBS lenders, equity investors and other financing sources represented by NorthMarq.

“Steve has consistently earned a reputation as a top member of our Dallas team and is a leading conventional/student housing expert within the company,” said Jeffrey Erxleben, NorthMarq Capital executive vice president/regional manager. “Steve is a great example of homegrown talent rising through the ranks of the company.”

Whitehead has been an integral part of NorthMarq’s most profitable office since joining in 1996 as an investment analyst. During his tenure, he has specialized in providing all of the capital needs of clients, thanks to many years of building trust and relationships with institutional equity investors as well as agency and life company lenders. His focus has been in advising student housing and conventional multifamily owners and developers and providing the entire capital stack needed to close in acquisition or development timelines. For key clients, he has acted as an external finance arm to provide advice early on and has sourced off-market deals. Whitehead has been successful creating joint venture relationships as well as raising preferred equity, mezzanine and sponsor capital.

Whitehead is a graduate of Texas A&M University with a Bachelor of Business Administration in Finance and is a licensed Real Estate Salesperson in the State of Texas.

Show More