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 and 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. In addition, we offer investment sales for multifamily and manufactured housing properties. Call our local office to learn more.

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Dallas Fort-Worth Q3 Multifamily Market Insights: Investor expectations gap narrowing quickly

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q3 2022
  • Both supply and demand conditions in Dallas-Fort Worth slowed during the third quarter, but growth is stronger than in nearly every other major market in the country. The pace of deliveries is lagging year-earlier levels but will accelerate beginning in 2023.
  • Vacancy ended the third quarter at 5 percent, similar to the market’s average since 2014. Heightened renter demand pushed the rate to a cyclical low at the beginning of this year, but vacancy trended higher in each of the past two quarters.
  • Even as vacancy has pushed higher in recent months, rents have maintained a steady upward trajectory. Rents ended the third quarter at $1,540 per month, up 15.4 percent year over year.
  • Apartment property sales were very active at the start of this year but slowed in recent months. Still, year-to-date transaction activity is nearly identical to the number of deals that closed in the first three quarters of 2021. Prices have generally held steady, while cap rates have risen to about 4.5 percent on average.

Read the report

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Lauren Bresky selected by ConnectCRE for 2022 Women in Real Estate award

DALLAS, TEXAS (October 16, 2022) – ConnectCRE recently recognized Lauren Bresky, senior vice president/managing director of Northmarq’s Dallas debt/equity office, as a recipient of its Women in Real Estate award. Bresky was selected from hundreds of submissions for her involvement in closing more than $5 billion in debt/equity financing, and her leadership of the Dallas office, a consistent top ten performing office for the company.

Recent highlights include securing debt and equity financing for a 1,012-unit property in Phoenix, the second-largest single asset multifamily sale in Arizona history, and debt and equity financing for a 2000-built, 366-unit, value-add apartment complex located in North Las Vegas.

This year marked the sixth year ConnectCRE honored women whose talent, drive, leadership and fresh ideas helped them succeed and become influential in commercial real estate. Read the full recognition.

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Kevin Leamy featured in REBusiness Online: Lenders continue to fuel multifamily development boom in northern Dallas suburbs

DALLAS, TEXAS (October 14, 2022) – Dallas-Fort Worth (DFW) has been one of the hottest multifamily markets in the country over the past five years. And as the area’s growth pushes further north, developers and investors are finding plenty of liquidity to support transactions.

The northern DFW suburbs experienced a huge inflow of people over the past several years. The growth to suburbs such as Addison, Richardson, Plano, Frisco and McKinney gained even more traction during the pandemic.

An increasingly diverse employer base and corresponding job growth are attracting people and driving demand for both for-sale homes and multifamily units. Instead of making a long commute into downtown Dallas or Fort Worth, there are now several big employers in North Dallas that offer
high-quality jobs.

One key catalyst for expansion was the opening of Toyota’s North American headquarters in Plano five years ago. The 100-acre campus is home to more than 4,000 employees. Other major corporations have followed, including the newly opened regional headquarters for J.P. Morgan Chase. Another factor drawing new residents to the area is strong schools, including a reputation for some of the best elementary and high schools in the country.

Multifamily developers have seized on the growing demand, and they are following the Dallas North Tollway and U.S. Highway 75 north in pursuit of new projects. Merchant builders are constructing these projects in 18 to 24 months, stabilizing rent rolls and then selling after 36 months.

Behind them is a deep pool of investors, often with longer-term hold strategies. Whether developers are looking for short-term construction and bridge financing or long-term fixed-rate debt, there are plenty of options available.

Strong Lender Appetite
Lenders are seeing the same strong fundamentals as developers and investors, and they have a healthy appetite to execute deals in the market.

Despite recent upticks in interest rates, borrowers are still finding plenty of liquidity. Banks are providing financing, as are life insurance companies and debt funds. In particular, Fannie Mae, Freddie Mac and FHA/HUD represent the most efficient and lowest-cost sources of capital.

The agencies have all been very active in financing multifamily projects in these North Dallas markets. In fact, Fannie Mae relocated its own regional headquarters to Plano at the end of 2017. The agencies are active across the spectrum of properties from market-rate to more mission-driven affordable product.

Overall, the agencies are focusing on creating balanced portfolios, and they are lending for all types of multifamily subcategories and at all stages of the project life cycle in these northern suburbs.

For example, Northmarq recently arranged agency financing for a multifamily property located in North Dallas. The borrower had a long-term strategy and opted for a fixed-rate, full-term interest-only loan. The asset was located within a great school district and in excellent proximity to an abundance of employers.

In the third quarter of 2021, Northmarq also closed on financing for a four-property multifamily portfolio that includes two assets in Allen. The transaction involved an institutional buyer, with financing provided by a large debt fund based out of New York City. The deal highlights the growing interest coming from large institutions and coastal capital to not only enter the Sun Belt region and Texas market, but North Dallas specifically.

We are seeing some transactions in the market occur at negative leverage, or at cap rates that are beneath the all-in borrowing cost. Investors still see this value proposition with multifamily investments, especially if those assets are in markets such as North Dallas or other parts of the Sun Belt.

Fundamentals have continued to remain strong, allowing for above-average rent growth, which gives comfort to buyers and investors when they are analyzing a potential acquisition with negative leverage going in.

With that said, there are plenty of transactions occurring with financing costs that are still beneath in-place cap rates. We are seeing investors and buyers utilize floating-rate debt coupled with the purchase of aggressive interest rate caps that are limiting their overall rate exposure.

More Growth Ahead
The DFW multifamily market continues to perform well, with vacancy rates at 3.9 percent in the second quarter and rent growth that was approaching nearly 20 percent year-over-year, according to Northmarq’s market research. Property owners in the northern suburbs are experiencing much the same phenomenon, with new projects that are leasing quickly.

Another factor contributing to that strong rental demand is high barriers for home buyers. The median cost of a single-family home in North Dallas now exceeds $600,000. So even though rental rates have jumped, there is still a big discount to renting versus owning a home in the market.

Higher mortgage rates following Fed rate hikes make homeownership more expensive for buyers and will likely drive more multifamily development in the northern part of the metroplex.

The majority of new projects are garden-style apartments with surface parking. Developers are also taking advantage of tax incentives to include affordability components in new projects. Builders can get tax breaks if they keep 20 percent of units affordable with rents that are below 80 percent of the area median income (AMI).

In addition, there are more Class A wrap, podium and high-rise properties being built just north of The Star in Frisco. The Star is the 91-acre headquarters and practice facility for the Dallas Cowboys, and builders are designing projects that cater to the high demographics in the neighborhoods of Stonebriar and Starwood.

Thus far, new projects are seeing very successful lease-ups and strong renter profiles, and developers are easily achieving their pro forma rents. Double-digit rent growth is expected to normalize at some point, although Northmarq does expect rent growth to continue in the range of 3 to 10 percent for the foreseeable future.

Lenders are keeping an eye on one of the biggest market risks — the potential for oversupply due to abundant land and low barriers to entry. However, the near-term outlook remains incredibly positive, with a staggering amount of people moving to the northern suburbs and driving demand for all types of
housing.

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Dallas-Fort Worth Q2 Multifamily Market Insights: Employment Growth Surges, Rents on an Upswing

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q2 2022
  • Conditions in the Dallas-Fort Worth multifamily market remained strong during the second quarter but did not duplicate the rapid improvement that had been occurring in the market for the past several quarters. The outlook remains favorable, with supply growth expected to closely track demand.
  • Area vacancy rose for the first time since the second quarter of last year, creeping higher after reaching an all-time low. The rate rose 120 basis points in the past three months to 3.9 percent. Despite the recent increase, current vacancy levels are down 110 basis points from one year ago.
  • Rents continued to push higher in the second quarter, advancing 3.8 percent to $1,489 per month. Year over year, rents have spiked 19.3 percent.
  • The pace of apartment sales cooled during the second quarter, but more properties sold in the first half of this year than traded in the same period in 2021. In transactions where pricing information was available, the median price through the first half is approximately $200,500 per unit, while cap rates are averaging 3.5 percent.

Read the report

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Lauren Bresky, Joel Heikenfeld and Kevin Leamy recognized by ConnectCRE with Top Mortgage Brokers & Lenders award

DALLAS, TEXAS (July 27, 2022) – Lauren Bresky, managing director, Joel Heikenfeld, senior vice president, and Kevin Leamy, senior vice president of Northmarq’s Dallas Debt & Equity team were selected by ConnectCRE as recipients of their Top Mortgage Brokers & Lenders award. The recognition honored top industry leaders and professionals who experienced an especially impactful year in 2021.

The Dallas team finished the previous year within the top 10 offices for the company nationwide, completing 75 transactions totaling more than $4 billion.

Recent examples of their success include:

  • Debt and equity financing for a newly-stabilized apartment community in Florida.
  • Debt and equity financing for a 363-unit, Class A apartment complex in an East Austin (Texas) Opportunity Zone near downtown Austin.

See the full recognition.

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Dallas Q1 Multifamily Market Insights: Vacancy Rate Hits New Low, Rents Surge Higher

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q1 2022
  • Dallas-Fort Worth was one of the hottest multifamily markets in 2021 with robust absorption and investment activity levels. Those trends repeated in the first quarter of this year. Absorption outpaced deliveries, driving the vacancy rate lower, and transaction activity is ahead of the 2021 pace.
  • The vacancy rate continued to improve, reaching an all-time low in the first quarter. The rate fell 20 basis points to 2.7 percent; year over year, vacancy has dropped 330 basis points.
  • Rents surged again in the first quarter, posting a 3.5 percent gain to start the year. During the past 12 months, rents have spiked 19.8 percent, ending the first quarter at $1,434 per month.
  • The investment market remained active to start the year, and sales velocity in the first quarter outpaced levels from the same period in 2021. In transactions where pricing information was available, the median price during the first quarter reached $222,200 per unit.

Read the report

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Dallas-Fort Worth Leads Nation in Multifamily Investment, Thanks to a ‘Perfect Storm’ for Growth

While the Dallas-Fort Worth multifamily market has been scorching hot for years, 2021’s record-setting performance is simply unprecedented.

The Metroplex has led the U.S. in multifamily investment transactions for six consecutive years. However, 2021 even outperformed that feat, as the number of assets that sold and the dollar volume essentially doubled 2020 levels. There was a surge in large transactions, and pricing spiked 33 percent.

“It’s very telling that Dallas-Fort Worth was the number one market in total sales volume in the entire nation, not only for multifamily but all asset classes,” notes Eric Stockley, vice president at Northmarq Multifamily in Dallas. “Roughly $47 billion in transaction volume closed — the highest of any market ever outside of Manhattan.”

Dallas-Fort Worth, Stockley says, was once considered more of a “flyover” area, but both national and international investors are taking notice of the business-friendly environment and explosive growth.

“It really opened everybody’s eyes, and they want a slice of the pie in Dallas-Fort Worth,” Stockley continues.

He says investors who traditionally were only focused on coastal gateway cities are allocating large amounts of capital to Dallas-Fort Worth. That’s not only private capital but institutional investors that are rebalancing their portfolios and decreasing allocations in office, retail and hospitality and rebuilding with multifamily and industrial — both high-demand sectors in Dallas-Fort Worth.

Roughly 50 percent of the multifamily transactions in 2021 were by investors new to the market, notes Bobby WeinbergNorthmarq’s senior vice president – Debt & Equity in Dallas.

“We had 136 transactions totaling over 35,000 units close last year out of our Dallas office. Half of those were new entrants to the market, which is eye-opening to the rest of the country and investors as a whole,” Weinberg says.

What’s driving activity? A ‘perfect storm’

Dallas-Fort Worth’s robust job growth and population expansion led to record-low apartment vacancies, record absorption, and unprecedented rent growth. Additionally, low interest rates fueled 2021 transactions.

The market added roughly 190,000 jobs in 2021 and is expected to add another 125,000-plus jobs this year.

“The business-friendly environment and affordability of Dallas-Fort Worth continue to attract employers, not to mention the talent we have with all the universities in the area,” Weinberg points out.

“Name a Fortune 500 company, and they’ve got a presence in the DFW,” Weinberg continues. That includes State Farm, Raytheon Technologies, American Airlines, Southwest Airlines and Charles Schwab.

“We have tech, aviation, finance and insurance jobs,” he notes.

Additionally, Dallas-Fort Worth is an “absolute hotbed” for industrial development, adds Stockley. Millions of square feet of warehouse/distribution space are under construction to meet growing e-commerce demands.

All the jobs created and the strong in-migration are fueling demand for apartments.Even before the pandemic, Dallas-Fort Worth was “capturing more than 100,000 new residents per year, on average,” according to RealPage. That rate increased even more in 2021.

Record absorption, occupancy and rents

Apartment construction in Dallas-Fort Worth has averaged around 25,000 units a year in the last four or five years. However, developers haven’t kept up with demand. Absorption doubled the number of new units delivered in 2021. Occupancy reached an all-time high of 97 percent. With nearly every submarket outperforming, landlords are pushing rents, which surged 16 percent in 2021 — the highest in three decades.

Outlook for 2022

“We’ll continue to track rent growth, which drives values,” says Weinberg. “As long as the population growth continues and construction remains constrained, given commodity prices and the increased difficulty in getting a deal out of the ground today, I can’t see many headwinds for rents.” Rent growth is projected to be around 8.5 percent in 2022.

As for future investment activity, the Federal Reserve approved a 25 basis-point rate hike, the first increasesince December 2018.

“The Feds are predicting six rate hikes this year, so we expect the SOFR — the most common index lenders are using to price today — to be around 1 to 1.5 percent by the end of the year,” Weinberg explains. “The deals we’re seeing, and the rent growth far exceeds that. It’s still a green light for investors.”

The Fed rate hikes on the docket are something we’re monitoring, agrees Stockley. “But we’re off to a good start,” he says. “Our office already has about $1.5 billion through production in the first quarter, putting us on pace to exceed last year’s production. There’s a lot of capital coming into Dallas.”

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Dallas-Fort Worth Q4 Multifamily Market Report: Rapid Renter Demand Growth Fuels Steep Vacancy Decline

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q4 2021
  • Operating fundamentals reached unprecedented levels in the Dallas-Fort Worth multifamily market in 2021. Despite another active year of new apartment construction, supply growth could not keep pace with a surge in new renter demand for units, causing vacancies to tighten and operators to implement double-digit rent increases throughout the region.
  • Vacancy fell 60 basis points during the fourth quarter, following a decline of 150 basis points in the preceding three months. For the full year, the rate dropped 270 basis points to 2.9 percent.
  • The tightening operating conditions provided the leverage for significant rent growth. Rents in Dallas-Fort Worth rose 17.1 percent in 2021, ending the year at $1,385 per month. Additional gains are likely, and the Metroplex is forecast to record some of the fastest rent growth in the country in 2022.
  • The local investment market continued to gain momentum in the fourth quarter. Transaction activity essentially doubled levels from one year earlier and once again led the nation. In transactions where pricing information was available, the median price in 2021 spiked 33 percent to $191,700 per unit.

Read the report

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Lauren Bresky promoted to managing director in Northmarq’s Dallas office

DALLAS, TEXAS (February 24, 2022) — Northmarq’s Dallas office follows its record production in 2021 with new leadership to support the office’s growth. The office topped $10 billion of investment sales and financing volume in 2021, growing to 100 employees.

Lauren Bresky has been promoted to managing director – Debt & Equity, and will lead the office’s growth, facilitate primarily multifamily debt and equity placements, and manage lender and client relationships for the office, collaborating with Steve Whitehead, managing director – Debt & Equity, and Taylor Snoddy, managing director – Investment Sales.

Jeff Erxleben, EVP/Executive Managing Director, has worked closely with Bresky for many years and noted her ability to deliver market-leading capital solutions across many client relationships and employee leadership. “Lauren has succeeded by having impressive skills that create value for our clients and drive growth across our entire platform. She’ll leverage those talents to bring new ideas to attract new employees and new business opportunities to our team,” he said.

Her collaboration skills were critical to the growth of the Dallas Investment Sales business led by Snoddy, where she works closely with buyers and sellers of multifamily properties to fully evaluate the best financing structure for their assets. In the past three years, she has been involved with closing more than $5 billion in debt and equity across all property and transaction types, leveraging Northmarq’s unmatched lending network of GSEs, life insurance companies, banks, and debt funds.

Bresky joined Northmarq in 2004 as a financial analyst and was promoted to vice president in 2010, to senior vice president in 2018, and to managing director in 2022. She is a member of Folsom Institute for Real Estate at Southern Methodist University, which is her alma mater.

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Experienced debt expert Daniel Stickane joins Northmarq’s Dallas office

DALLAS, TEXAS (February 24, 2022) — Northmarq’s Dallas office follows its record production in 2021 with the addition of a new multifamily financing expert joining the office, which makes the office a market leader with 30 financing experts.

Senior financing executive Daniel Stickane has joined the company from PNC Bank, where he specialized in multifamily lending through Fannie Mae and Freddie Mac and was involved in excess of $4 billion in transactions.

Lauren Bresky, managing director – debt & equity, said that Daniel’s deep experience in multifamily leveraging the Fannie Mae and Freddie Mac platforms will complement the multifamily investment sales team and its clients.
“We’re extremely excited to bring Daniel’s agency expertise to our team, but beyond that, he will be a meaningful part of our continued growth strategy in Dallas,” said Lauren Bresky, managing director – debt & equity. “By combining forces with our debt/equity and investment sales team, we expect Daniel to help us continue to be the dominant multifamily platform in the region and create the best execution for our clients.”

Before his 10 years with PNC Multifamily, Stickane was an asset manager for nearly five years with C-III, working on non-performing loans and distressed assets. He is a native of Fort Worth and attended Texas A&M University majoring in Finance.

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Dallas-Fort Worth Q3 Multifamily Market Report: Prices Rise as Investment Demand Continues to Surge

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q3 2021
  • Following a very strong first half of the year, the Dallas-Fort Worth multifamily market gained additional momentum during the third quarter. Renter demand is being fueled by a rapid recovery in the local labor market. Investment demand has continued to accelerate in response to strengthening property fundamentals.
  • The tightening vacancy rate is one of the clearest indicators of the rapid improvement in the local multifamily market. The rate ended the third quarter at 3.5 percent, down 180 basis points year over year.
  • The pace of rent growth in Dallas-Fort Worth recorded a steep rise for the second consecutive quarter. During the third quarter, area rents spiked nearly 7 percent to $1,334 per month. Year over year, rents have increased 12.5 percent.
  • The local investment market remained extremely active in the third quarter. The number of properties changing hands rose by more than 30 percent from the second quarter, and activity for the year has already surpassed levels for all of 2020. In transactions where pricing information was available, the median price in 2021 has reached $174,800 per unit, while cap rates have compressed to an average of 4 percent.

Read the report

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Northmarq’s National Build-to-Rent team issues special research report for booming market segment

Report identifies new markets, market drivers, and investment opportunities

MINNEAPOLIS (Oct. 15, 2021) – Northmarq, which is an industry leader in the growing build-to-rent market, has issued its Oct. 2021 special report, authored by the company’s national Build-to-Rent team and Research Director Pete O’Neil. Led by Jeff Erxleben, executive vice president/executive managing director, and Trevor Koskovich, president-Investment Sales, the group of 12 experts in debt, equity, and investment sales, has completed more than $1.5 billion in single-family built-to-rent sales transactions in the U.S. and has over 15 active listings and assignments.

“While this property type first appeared in Phoenix, we are now seeing activity across the country and built a team focused on the asset from start to finish. By combining financing and sales experts on the same team, we can provide the best insights to clients across the country,” said Koskovich.

As part of the specialty practice group’s responsibilities, they work with Northmarq’s Director of Research Pete O’Neil to compile a research report twice a year. The second half report, issued today, identifies three key trends:

  1. Financing continues to be more plentiful for investors in this market. Early in the development cycle, institutional and GSE lenders stayed away from this product, primarily because it was viewed as disjointed single-family homes rented without strong oversight. With the explosion of interest in the product, BTR communities consistently have a master-planned development of single-family homes for rent, often with significant amenities comparable to traditional multifamily.
  2. New markets appear in the development pipeline monthly, with recent growth in the Carolinas and Dallas-Fort Worth. In DFW, 25 projects are underway, slated to deliver more than 3,000 homes in the next 18 months. In Charlotte, nearly two dozen projects totaling more than 2,800 units are either under construction or in the planning phases in the Charlotte metro area.
  3. Renter demand drives this product, as occupancy nears 100 percent in almost every community. This demand is coming from older renters looking for flexibility to younger families looking for more space than a traditional apartment. For both types of tenants, the increasing costs related to owning are making leasing increasingly attractive.
    “More and more traditional multifamily lenders, including the GSEs, life insurance companies, traditional banks and private debt funds, are financing these properties. We’ve seen debt providers offering more attractive terms as this market expands and the competition from lenders trying to gain traction,” said Erxleben.

Billions of dollars of debt and equity capital are moving into this investment class with new entrants on the scene seemingly monthly. Lenders recognize build-to-rent’s impressive fundamentals and are offering developers and investors new options for structuring their financing. What was a niche product in only a handful of markets a couple of years ago is spreading across some of the fastest-growing areas of the U.S., particularly the Southwest, Texas, and the Southeast.

See Northmarq’s report here.

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As Booming Build-to-Rent Continues Expanding, New Capital Pours into Sector and Finance Options Soar

Billions of dollars of debt and equity capital are charging into this investment class

MINNEAPOLIS, MINNESOTA (October 8, 2021) – Developers, investors, renters, and now lenders, are catching the wave of single-family build-to-rent, one of the hottest sectors in the U.S. multifamily housing market. Read the full report.

If build-to-rent isn’t in your market yet, it’s likely heading your way.
Northmarq is very active in this thriving space having launched in 2021 a National Build-to-Rent practice group comprised of dedicated debt, equity, and investment sales experts from across the country. Northmarq has already completed more than $1.5 billion in single-family home rental transactions in the U.S. and has over 15 active listings and assignments.

Billions of dollars of debt and equity capital are moving into this investment class with new entrants on the scene seemingly monthly. Lenders recognize build-to-rent’s impressive fundamentals and are offering developers and investors new options for structuring their financing. What was a niche product in only a handful of markets a couple of years ago is spreading across some of the fastest-growing areas of the U.S., particularly the Southwest, Texas, and the Southeast.

Strong demand from renters is fueling the expansion. Additionally, one of the biggest advancements of build-to-rent product is developers are creating purposeful neighborhoods of rental homes operated by the same multifamily management operator. This allows the owner to operate cost-efficiently when managing the rental and maintenance of the homes, which is more attractive to investors than portfolios of traditional single-family rentals that could be scattered across metros, submarkets, and regions.

Numerous debt financing options available for development, acquisitions
As build-to-rent velocity accelerates, investors and lenders are becoming more familiar and comfortable with the product. More and more traditional multifamily lenders are financing these properties. Lenders range from Freddie Mac, Fannie Mae, and life insurance companies, traditional banks, and private debt funds seeking to expand their portfolios. Debt providers are becoming wider and deeper as build-to-rent expands. Terms are attractive, with lenders willing to increase the loan-to-cost amounts at lower interest rates. Lender competition is heating up with lenders seeking to gain traction within the property type.

For acquisition and recapitalization, Fannie Mae and Freddie Mac are very active debt options in the space. Northmarq, as a direct Freddie and Fannie lender, is one of the largest direct agency lenders currently making these loans. We recently completed the sale of two projects with more than 500 units in Phoenix and simultaneously arranged acquisition financing through Northmarq’s Fannie Mae platform.

Equity pours into the sector
More than $10 billion in equity capital is expected to move into build-to-rent properties this year alone, after roughly a dozen institutions announced plans to expand into the sector. For example, Blackstone announced a $6 billion acquisition of Home Partners of America, and Invesco Real Estate partnered with Mynd Management, committing $5 billion to purchase 20,000 single-family homes.

Investor response has been robust. More than $900 million in build-to-rent transactions closed in 2020, up from $400 million in 2019. Transaction activity continues to accelerate in 2021. The number of properties that sold during the first half of was nearly identical to the total sold in all of 2020.

A strong second half is underway with several properties slated to close by year-end. Similar to conventional multifamily, pricing is pushing higher and cap rates have compressed. The median price surpassed $250,000 per unit in 2020, while the median price in transactions closed year to date exceeds $300,000 per unit. Robust investor demand and increasing rents are driving up pricing.

Why is build-to-rent popular with renters?
Build-to-rent provides renters new options fueled by its affordability, flexibility, and as an alternative to the tight housing market. Millennials are a big force behind the build-to-rent movement, as they move to the suburbs seeking more space, yet still opt to rent. They’re looking for modern amenities that new build-to-rent communities offer. Empty nesters are also attracted to this rental option. Hot markets include Phoenix; Texas, led by Dallas-Fort Worth and Austin; and the Southeast including Orlando and Tampa, Fla., Atlanta; and the Carolinas.

Dallas-Fort Worth and the Carolinas, in particular, are up-and-coming markets to watch. Buoyed by booming job markets, fast-growing populations, and increasing housing prices, Dallas-Fort Worth and North and South Carolina are becoming top spots for new build-to-rent communities.

The product is still in its early stages in Dallas-Fort Worth with approximately a dozen build-to-rent properties delivered since 2018. However, activity is accelerating rapidly, with another roughly 25 projects under construction or planned, totaling more than 3,100 units.

There are roughly 25 existing build-to-rent communities across the Carolinas with several more projects in the pipeline, which should deliver in the next few years. Thriving build-to-rent cities include Charlotte and Greenville, S.C., and Raleigh-Durham and Myrtle Beach, N.C.

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Dallas-Fort Worth Q2 Multifamily Market Report: Vacancy Rates Fall as Absorption Accelerates

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q2 2021
  • The Dallas-Fort Worth multifamily market posted a very strong period of operating performance during the second quarter. Absorption reached a quarterly total not seen in years, driving vacancies lower and pushing rents higher. Investors responded to these trends by stepping up transaction activity and pushing prices higher.
  • Vacancy in Dallas-Fort Worth ended the second quarter at 5 percent, down 70 basis points from one year earlier, and 100 basis points lower than during the first quarter.
  • The steep decline in the local vacancy rate was sparked by a spike in absorption levels. Net absorption topped 15,000 units during the second quarter; absorption year to date is up 30 percent when compared to the first halves of recent years.
  • Rents gained momentum during the second quarter. Current rents are up 5.4 percent year over year at $1,248 per month.
  • Investment activity accelerated during the second quarter, rising 30 percent from the first three months of the year. In transactions where pricing information was available, the median price in 2021 has reached $156,200 per unit, while cap rates have compressed to 4.1 percent.

Read the report

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Growing pool of investors targets multifamily, industrial deals in Fort Worth

Bobby Weinberg, NorthMarq’s senior vice president – Debt & Equity in Dallas, recently authored the following perspective for the June 2021 edition of Texas Real Estate Business.

Employment growth is providing a powerful tailwind for the Dallas-Fort Worth (DFW) commercial real estate market. And while Dallas may be the
headline name that is attracting employers and investment capital to the metroplex, Fort Worth is commanding attention as a formidable market in its own right.

DFW embodies a classic story of a high tide raising all boats. The metro has been a national leader in terms of employment growth for several years, and the region is expected to add another 150,000 jobs this year.

Employers that are looking to tap into that workforce are finding that Fort Worth checks all the right boxes. It has an educated labor pool with colleges and universities that include Texas Christian University and the nearby University of Texas-Arlington, among others. Furthermore, the city has a business-friendly government.

An important third leg to that stool involves the affordable cost of living for workers. Fort Worth offers a multitude of workforce housing options — both in its single-family residential and its growing multifamily sector — that provide lifestyle choices for workers that employers like.

Investors are discovering that there is not a big delineation in yields, cap rates, and return on costs between commercial investment opportunities in Dallas and Fort Worth. Rents might be different from submarket to submarket, but overall, investors view Fort Worth very favorably and are aggressively deploying capital into the market.

In fact, the Dallas office of NorthMarq originated a record-high volume of loans in the metroplex in the first quarter. That activity speaks to the strong appetite from investors, as well as the real estate investment opportunities that exist across the board in development, acquisitions, and property repositioning.

Pack Leaders
It is no surprise that industrial and multifamily are the favored property sectors, and both have robust development pipelines. The established submarkets of Alliance, the Great Southwest, and South Fort Worth continue to attract tenants as fast as developers can build product.

Growing pockets in areas with strong household demographics have emerged as hotspots of activity. For example, Lone Star Commerce Center, located north of Lockheed Martin’s headquarters, is seeing a flurry of activity from developers and tenants alike, driven by strong fundamentals.

Developers are responding to continued growth in demand for e-commerce fulfillment and logistics services. Among the notable deals that fit this profile executed in Fort Worth during the first six months of 2021 were DHL’s renewal of 1.4 million square feet in North Fort Worth, and Walmart’s signing of a lease for 1 million square feet.

Amazon also continues to add more capacity in and around Fort Worth to
serve the growing population in the DFW metroplex. The e-commerce behemoth has also announced that it will significantly grow its technology workforce across six major markets in 2021 with 600 new positions expected to be added in the metroplex.

Multifamily development has been active for the past several years and shows no signs of slowing. According to NorthMarq’s DFW multifamily research report for the first quarter of this year, there were an estimated 37,334 units under construction at the end of the first quarter, with 6,951 units delivered during the first three months of the year.

Although rent growth slowed to 0.9 percent as landlords focused on tenant retention, absorption of those units has remained strong. A market-wide vacancy rate that rose 60 basis points to 6 percent in the first quarter is expected to tighten by the end of 2021. Based on deals we have sold and financed in the second quarter, we anticipate further compression in vacancy and significant organic rent growth.

On the acquisition side, there is a very healthy amount of capital for all different types of multifamily assets, from ground-up Class A projects to workforce housing. Multifamily cap rates in the DFW compressed further over the past year to average 4.3 percent in the first quarter. Prices generally have continued on an upward trajectory driven by rent and growth in net operating income.

Diversity of Capital
A combination of significant liquidity from a large variety of established and new investors and extremely competitive financing rates is driving demand for product. In the multifamily sector, for example, sponsors are able to secure financing at 75 to 80 percent loan-to-value ratios with rates in the low- to mid-3 percent range. Lower-leverage deals for agency or life insurance money tend to price in the mid- to high-2 percent range.

Our investment sales team in Dallas has sold 16 multifamily properties in Tarrant County totaling over 5,500 units. On the capital markets side, we
have arranged debt and equity financing for 20-plus transactions with another 20 in the pipeline. This speaks to the strength of the market not only in terms of rent growth and demographics, but also with regard to investor interest in the Fort Worth market.

Recently, concerns about rising inflation and higher interest rates are stirring up the classic conversation of weighing floating-rate debt versus fixed-rate. Commercial real estate has traditionally been viewed as a good inflation hedge because of the ability to increase rents, but is less of a hedge if a property has floating-rate debt in a rising interest rate environment.

It remains to be seen how sticky some of the recent inflation pressure will be and how it might impact yields and investment strategies over the short term. The bond market has largely shrugged off inflation fears and continues to push long-term treasury yields lower.

Overall, the capital sources targeting commercial and multifamily real estate investments in Fort Worth span a diverse group, ranging from\ institutions and foreign buyers to high-net-worth individuals. We continue to see new investment groups entering the market on almost a weekly basis.

We remain bullish on long-term fundamentals of North Texas as job growth
fuels economic expansion that will continue to benefit the commercial real estate sector and, in particular, industrial and multifamily asset performance.

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Local and out-of-state investors flood Dallas-Fort Worth multifamily market to compete for properties

Buyers with pent-up capital are eager to close apartment deals, resulting in a boom in transaction activity since the beginning of the year.

Multifamily sales transaction volume picked up significantly in the Dallas-Fort Worth market in the first quarter of 2021, after dipping in 2020 due to the impacts of the COVID-19 pandemic. In fact, apartment sales volume has rebounded and is now as robust as it has ever been.

An insatiable appetite from local buyers and a hefty increase in activity from out-of-state investors are intersecting, as buyers recognize the market’s immense growth opportunities. Many new investors are looking to get out of the more rent-restricted, challenging apartment markets in cities like New York and San Francisco and focus on more business-friendly environments like Dallas-Fort Worth.

NorthMarq has closed $750 million worth of apartment transactions in the market in the first quarter alone; these sales included 18 properties totaling nearly 7,200 units. Additionally, the company has $1.7 billion in multifamily properties totaling another 14,000 units under contract or in active listings.

One of the largest properties that traded is Brooklyn Apartments in North Dallas, which boasts nearly 1,500 units. A local group owning multiple assets in the market acquired the property as it looks to grow its portfolio. Historically, this submarket has a lot of workforce housing, which offers strong rent growth metrics. The buyer is planning a massive renovation to turn the property around and boost rents.

Why accelerated investor activity now?
Once the 2020 election was over and the vaccine rollout picked up momentum, multifamily sales activity spiked. Large amounts of pent-up capital are looking to be placed from transactions that did not occur in 2020 due to the pandemic.

The bridge market remains active. Debt funds are becoming more aggressive and have plenty of capital. Debt funds were really out of the game for much of 2020. Now that they have so much pent-up capital, they have gotten extremely aggressive on rates. Debt funds are doing 75 to 85 percent loans. Couple that with investors’ confidence in the Dallas-Fort Worth market, and it becomes clear why there is an acceleration in the number of deals. Although rent growth was relatively flat for much of 2020 due to COVID-19, demand drivers are forecast to support rent growth of approximately 3 percent in 2021, according to NorthMarq’s 4Q 2020 Dallas-Fort Worth Multifamily report.

Larger buyer pool: Out-of-town competition heats up
NorthMarq has approximately 50 apartment deals in the market or under contract that will close by mid-year. Historically, 2021 is expected to be one of the best years ever in apartment transaction volume in Dallas-Fort Worth. Investors continue to be attracted to the market’s strong absorption, favorable employment and in-migration trends, and steady supply of new apartments.

While robust demand from local buyers continues, competition is heating up as a huge influx of out-of-town investors has entered the market. These new buyers have significant amounts of capital to put to work and are getting aggressive and winning deals.

There are many more buyers today than Dallas-Fort Worth saw in 2020, and many are coming from inferior business climates or rent-restricted markets including California and New York. Many are seeking to diversify into Dallas due to its healthy business climate. In October 2020, a survey of corporate executives ranked Texas as the best state for business for the eighth time in a row.

Because of this pro-business stance, more corporations are relocating to Dallas-Fort Worth, including giant financial services firm Charles Schwab, which acquired TD Ameritrade. The company relocated its San Francisco headquarters to a $100 million campus in Dallas-Fort Worth earlier this year.

Meanwhile, Dallas-Fort Worth’s population continues to explode as more people are moving there from more expensive cities like San Francisco, Los Angeles and New York, which is a boon for the local apartment and single-family housing markets. In fact, the media is calling the DFW housing market “superheated,” as sellers are receiving multiple offers within hours of putting their homes on the market.

New investor seeks to diversify
NorthMarq recently closed a large sale with a buyer from New York in a Dallas multifamily acquisition; it was the investment group’s first acquisition in Texas. It is a seven-property sale throughout the Dallas metro. The seven properties total more than 2,800 units. They are the Amp and Current at the Grid and Residence at Lamar in Arlington, Forty200 and Annex Apartments in Mesquite, Hangar Apartments in Cedar Hill, and Sierra Park Apartments in Dallas.

Not only is this buyer new to the Dallas market, but it is diversifying more into multifamily, which is another big trend. Historically, this investor focused primarily on the senior housing/nursing home sector and is now diversifying and growing its apartment portfolio. Apartments have outperformed compared to other real estate sectors during the pandemic.

Investors who have been heavily weighted in hotel, office, senior housing and/or retail – all sectors that have struggled since the onset of COVID-19 — are looking to diversify their portfolios into the multifamily sector, particularly in the healthy Dallas-Fort Worth market.

More demand than available product
There is clearly more investor demand for apartments than available product in the market. Fewer deals came to market at the beginning of the year due to the National Multi Housing Council (NMHC) Convention being rescheduled. Typically, a large number of assets are launched to the market during this conference. Additionally, there are multifamily owners who have been hit by COVID-19 that are working to improve their operations and plan to go to market later in 2021.

Accelerated activity occurring in secondary markets
Another trend is there is significant activity occurring in secondary and tertiary markets, just outside of Dallas-Fort Worth. Cap rates have moved so far down in the DFW market that investors are going to areas like Tyler, Longview, Wichita Falls, Sherman, Abilene and Waco as they chase better yield (in the range of 50 to 75 basis points higher).

NorthMarq has roughly 12 transactions it is working on in these secondary and tertiary markets. The company recently closed on transactions in Wichita Falls (called Forest Glen), Sherman (called Turtle Creek Village) and Tyler (called Hollytree).

While investors who historically would not acquire properties in these smaller markets with populations of 50,000 to 100,000, they are investing there now in search of yield and for assets that have seen less improvements compared to Dallas/Fort Worth.

 

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Dallas-Fort Worth Q1 Multifamily Market Report: Investment Activity Starts 2021 on an Upswing

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q1 2021
  • The Dallas-Fort Worth multifamily market posted continued growth to start 2021. Developers continued to bring new projects through the construction pipeline, while absorption gained momentum. With demand elevated, rents rose and the investment market remained competitive.
  • The combined vacancy rate across Dallas-Fort Worth ended the first quarter at 6 percent, up 60 basis points from one year ago. Vacancy is forecast to tighten in the coming quarters.
  • Net absorption totaled more than 3,500 units during the first quarter, ahead of the pace that has been established in recent years. In the first quarters of 2019 and 2020, absorption averaged approximately 2,800 units.
  • After rents were flat for most of 2020 as owners focused on tenant retention, rents rose 1.2 percent during the first quarter. Average asking rents ended the first quarter at $1,197 per month.
  • The local investment market remained active during the first quarter, with prices rising and cap rates compressing. In transactions where sales information is available, the median per-unit price rose 12 percent from 2020 levels, while cap rates dipped to approximately 4.3 percent.

Read the report

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NorthMarq’s Dallas office finds lender interest for retail properties in Nashville and Reno

DALLAS, TEXAS (April 16, 2021) – In a sign that retail assets can land financing in the post-pandemic environment, Ron Reese, senior vice president, debt and equity in NorthMarq’s Dallas office, recently secured financing for two retail properties through life company lender Genworth Financial.

“After reviewing these properties with our network of life insurance companies, Genworth Financial offered the best mix of terms and timing,” said Reese. “In both transactions, the sponsors were able to perform their business plan, which had little impact during the Covid-19 lock-down.”

Nashville West Retail Center

The first property, Nashville West Outparcels, consists of seven parcels with 14 buildings, totaling 77,275 sq. ft. and was refinanced for $21.5 million in a 62% loan-to-value. Situated in front of the Nashville West Retail Center on Charlotte Pike, the property was 93% leased to a variety of tenants including major national brands such as McDonalds, Firestone, Starbucks, Chipotle, Outback Steakhouse, GameStop, and more. Nashville West is a 750,000-sq. ft. power center anchored by Costco, Dick’s Sporting Goods, Best Buy, Ross, Marshall’s, Old Navy, Petsmart, and Staples.

Pavilions Retail Center

The second retail property financed in a 20-year, $11,500,000 loan through Genworth Financial is Pavilions Retail Center in Reno, Nevada. This retail center on S. Virginia St., a high-traffic main thoroughfare, sees roughly 25,000 vehicles per day on Virginia St., and 108,000 vehicles per day on Martin Luther King Jr Memorial Highway (Interstate 580).

When the sponsor acquired the property in April of 2017, the façade was in poor condition, and the center had declined to 36% occupancy. After a nearly $7 million investment for façade and expansion, the center has attracted two new tenants, Lee’s Discount Liquors and Planet Fitness with each occupying approximately 30% of the now 76,954 sq. ft. center. Occupancy today is near 90%.

The transactions closed in the middle of the first quarter.

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NorthMarq’s Dallas Investment Sales team receives Connect Media’s Top Brokers of 2020 award

DALLAS, TEXAS (March 30, 2021) — Taylor Snoddy, James Roberts, and Philip Wiegand of NorthMarq’s Dallas Investment Sales team was recognized in this year’s class of Connect Media’s Top Brokers – in Texas. Brokers and teams considered for the award were judged on 2020 total dollar volume for investment sales, total square footage for leasing deals, and total number of transactions.

Highlights from the team’s award winning year include:

  • One key to the team’s success is how closely they work with NorthMarq’s debt and equity professionals to offer more resources for their buyers and sellers.
  • The team’s most impactful sale of the year was The Vineyards Portfolio, a two property 1,656-unit portfolio. The portfolio was the largest property to sell in Dallas/Fort Worth in 2020, and was spread across 38.62 acres in the highly transactional Northeast Dallas submarket.
  • Transaction total for 2020: $588 million
  • In the team’s short time with the company (they joined in 2018), they have transacted nearly $1.75 billion, representing 20,000 homes.

View the full Dallas team Top Broker recognition.

The award was featured on Connect Media’s website.

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Dallas Q4 Multifamily Market Report: Investment Activity Surges to Close 2020

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q4 2020
  • The Dallas-Fort Worth multifamily market ended 2020 with significant levels of absorption and new supply. Vacancy ticked higher and rents remained within a tight range. The local labor market is regaining momentum, which should support renter demand going forward.
  • The combined vacancy rate across Dallas-Fort Worth crept up 30 basis points in the fourth quarter, reaching 5.6 percent. Vacancy rose 50 basis points in 2020, offsetting a decline of 40 basis points in the preceding year. The Fort Worth-Arlington segment of the market recorded some modest tightening in 2020.
  • After several years of steady gains, rent growth slowed in 2020 as owners shifted their focus to tenant retention. Despite turbulent market conditions, asking rents still rose 0.7 percent in 2020, ending the year at $1,183 per month.
  • Investment activity surged to close the year, with sales velocity in the fourth quarter outpacing levels from the same period in 2019. In transactions where sales information is available, the median per-unit price rose approximately 15 percent in 2020, while cap rates have averaged 4.9 percent.

Read the report

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Dallas-Fort Worth Q3 Multifamily Market Report: Absorption Strengthens as Conditions Return to Normal

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q3 2020
  • The Dallas-Fort Worth multifamily market posted strong performance during the third quarter. Absorption totaled nearly 10,000 units in the past three months alone, driving the local vacancy rate lower. The market should gain additional traction as the pace of economic growth accelerates.
  • Vacancy in the Dallas-Fort Worth area tightened during the third quarter, falling 40 basis points to 5.3 percent.
  • Asking rents ticked up to $1,186 per month, matching the figure from the first quarter. Rent growth is expected to strengthen as the local economy stabilizes.
  • After slowing during the second quarter, sales velocity nearly tripled in the third quarter. In transactions where sales information is available, per-unit prices have risen approximately 10 percent in 2020, while cap rates have averaged 5 percent.

Read the report

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Investment Sales activity picks up: NorthMarq’s Dallas office celebrates sale of five multifamily properties

DALLAS, TEXAS (September 30, 2020) – NorthMarq’s Dallas office recently completed the sale and financing of five multifamily properties totaling 1,153 units in the Dallas/Ft. Worth market. The sales reflect a resurgence of investment sales nationwide after slumping during the COVID-19 pandemic. Heading into 2020, the outlook for the Dallas-Fort Worth multifamily market remains strong, with the market consistently leading the country in job growth and apartment absorption.

Despite the temporary COVID-19 impact, Dallas still managed to lead all markets with nearly $9 billion in total property transactions in the first half of 2020 – over 50 percent of which was multifamily product. The labor market in Dallas-Fort Worth has already begun to bounce back considerably, as more than 40 percent of the local jobs that were cut from payrolls during the shutdown had already returned by the end of June. A handful of employment sectors even expanded during the market hiatus, led by financial activities employment which grew by 2.6 percent in the last 12 months. Dallas-Fort Worth recorded a year-over-year wage increase of 3.7 percent (June 2020) which continues to support higher cost of living. Subsequently, the median sale price of closed multifamily transactions year-to-date is approximately $130,000/unit.

NorthMarq’s Multifamily Investment Sales team consists of Taylor Snoddy, managing director; James Roberts, senior vice president; Phillip Wiegand, senior vice president;  Eric Stockley, associate;  Charles Hubbard, financial analyst; Campbell Brook, financial analyst; and Devin Etzold, transaction manager. The Debt/Equity team consists of Stephen Whitehead, managing director; Lauren Bresky, senior vice president; and Will Hancock, vice president.

“Our recent closings are indicative of the strength of the Dallas multifamily market,” said Snoddy. “Operations have held up strong over the past six months. This, coupled with a historically low interest-rate environment, has led to a sharp increase in our activity.”

Fort Worth three-property portfolio: The portfolio consists of three properties: 208-unit Magnolia Crossing located at 5700 Boca Raton Boulevard in Fort Worth, Texas; 154-unit Mission Hill located at 525 King George Drive in in Fort Worth, Texas; and 80-unit Verona Apartments located at 350 Shady Lane Drive in Fort Worth, Texas.

The properties are located just under two miles from the I-30/I-820 interchange near top employment and service providers.

“The portfolio has significant upside in what is already a high rent growth submarket. Being able to immediately scale within the area was compelling to the buyer,” said Taylor Snoddy. “The buyer, a local investment group, has the ability to capitalize on planned upgrades to its units and common areas to better compete within a submarket already benefiting from these types of renovations.”

The NorthMarq Dallas Debt team was able to finance the assets through Freddie Mac’s FRED execution (now called the Middle Market program). This allowed the sponsor to take advantage of a streamlined process which allows for a quicker closing process as well as deal level cost savings.

“NorthMarq was able to arrange and execute this acquisition financing on behalf of the buyer which included max leverage, half term interest only at an all-in rate sub 3 percent,” said Lauren Bresky.

View at Lake Highlands: The 292-unit asset, located on a unique site that is just over 14 acres in what is a highly accessible yet secluded Lake Highlands neighborhood.at 9855 Shadow Way in Dallas, Texas. Acquisition financing for the transaction was arranged for the borrower through NorthMarq’s in-house Fannie Mae team with a 10-year term on a 30-year amortization schedule. Read more about the transaction.

McCallum Communities: The asset, located in a premier location at 7740-7777 McCallum Boulevard in Dallas, Texas, totals 419 units. Situated just south of the George Bush Turnpike, McCallum Communities is located directly in the path of progress and one of DFW’s most rapidly growing submarkets and near many major employment hubs. NorthMarq arranged acquisition financing for the borrower through as an Optigo lender with Freddie Mac. The transaction was structured with a 10-year term on a 30-year amortization schedule at 80 percent loan to purchase price. Read more about the transaction.

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Dallas Q2 Multifamily Market Report: Strong Renter Demand Outpaced by Deliveries

Highlights:

Dallas-Fort Worth Multifamily market report snapshot for Q2 2020
  • The Dallas-Fort Worth multifamily market has been marked by rapid demand growth and steady additions to supply in recent years. During the first half of this year, the pace of renter demand slowed as the coronavirus dragged on the economy. Heading into the second half of the year, demand should gain momentum.
  • The multifamily vacancy rate ended the second quarter at 5.7 percent, up 80 basis points year over year. Vacancy is only 50 basis points higher than the market’s five-year average.
  • Asking rents ended the second quarter at $1,184 per month, 2.5 percent higher than one year ago.
  • Sales velocity in Dallas-Fort Worth slowed during the second quarter, following a strong start to the year. Activity has already shown signs of picking up early in the third quarter.

Read the report

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Dallas Multifamily Market Report: Nation-Leading Job Growth Drove Absorption in 2019

Highlights:

  • Rapid growth in the Dallas-Fort Worth area supported improving apartment property performance in 2019. With additional growth forecast for 2020, similar multifamily performance is likely in the year ahead.
  • Dallas-Fort Worth led the country in job growth in 2019, with employers adding 126,100 new workers, a 3.4 percent pace of growth.
  • Vacancy fell 30 basis points for the year, reaching 5.2 percent as of the fourth quarter. This was the second straight year where the local vacancy rate tightened.
  • Rent growth outpaced gains from recent years. Asking rents rose 4.6 percent in 2019, reaching $1,175 per month.
  • The Dallas-Fort Worth market posted consistently strong investment performance in 2019. The number of property sales ticked higher, prices rose, and cap rates compressed. With strong property performance forecast going forward, investors are likely to remain active in 2020.

Read the report

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Congratulations to Jeffrey Erxleben on being named a Rainmaker by GlobeSt. Real Estate Forum Magazine

Jeffrey Erxleben, executive vice president – regional managing director, was named one of GlobeSt. Real Estate Forum Magazine’s 2019 Rainmakers. Erxleben oversees the firm’s regional offices and leads the company through his various contributions, while remaining managing director of the firm’s Dallas office.

He works diligently to coordinate with the firm’s new investment sales team and its existing financing team to execute beneficial transactions for clients. The Dallas office, under Erxleben’s leadership, is consistently recognized as the firm’s top producing office. His annual production volume personally earns him a consistent place on NorthMarq’s Top 10 Producers list, as he delivers relationship-based outcomes for valued clients.

Integral to the firm’s continued success, Erxleben is a member of the executive committee and council for the firm’s Associate Producer Program. In this role, he works closely to train the emerging generation of industry leaders and producers, while serving as a valuable resource and mentor for others to hone their skills. He additionally leads the firm’s Equity Advisory Group as co-chair, during which the company has nearly doubled its equity transaction volume from the previous year. In addition, Erxleben serves as a thought leader, contributing to numerous publications and panels.

GlobeSt. Real Estate Forum selects its Rainmakers based on their contributions to the industry, their success in loan production, and the innovation and best practices they have introduced to the business. See the full list of this year’s Rainmakers here

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Dallas-Fort Worth Q3 Market Report: Demand Outpacing Supply Growth, Pushing Rents Higher

Highlights

  • Multifamily conditions in Dallas-Fort Worth strengthened during the third quarter. The pace of job growth accelerated, apartment vacancy improved for the second consecutive quarter, and rents rose at a steady rate.
  • Absorption of apartments totaled approximately 9,600 units during the third quarter, and renters have moved into a net of nearly 24,000 units year to date. The strong renter demand drove vacancy down 40 basis points in the third quarter to 4.5 percent, the lowest rate in four years.
  • Asking rents rose 1.6 percent during the third quarter, reaching $1,174 per month. Current rents are up 4.7 percent from one year ago.
  • While sales of apartment properties slowed slightly from the second quarter to the third quarter, activity thus far in 2019 is ahead of last year’s pace. Prices are trending higher, and cap rates have compressed in each of the last two quarters.

Read this report.

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Dallas Q2 Market Report: Job Gains Push Absorption Totals to New Heights

Highlights:

Dallas market Q2 snapshot
  • The Dallas-Fort Worth multifamily market benefitted from robust levels of job growth and a spike in the net absorption of apartment units during the second quarter. The outlook for the remainder of the year remains positive.
  • Net absorption totaled more than 11,600 units in the second quarter, driving the vacancy rate down 90 basis points to 4.9 percent. Year over year, vacancy is down 30 basis points.
  • Rent growth accelerated during the second quarter. Asking rents reached $1,155 per month, rising 4.7 percent from one year ago.
  • Investment activity picked up during the second quarter, while prices rose and cap rates compressed. Through the first half of this year, the average cap rate in transactions where pricing data was available was 5.2 percent, while the median price had risen to $118,800 per unit.

Read the report

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Bobby Weinberg joins InterFace Panel: Dallas industrial market poised to withstand recession

On September 4, Bobby Weinberg of NorthMarq’s Dallas office spoke on the lenders and investors panel at InterFace DFW Industrial.

The panel, titled “Dallas Industrial Market Poised to Withstand Recession,” covered such topics as market evolution, tailwinds from e-commerce and direct-to-consumer models, and lenders’ increased appetite for the industrial properties.

Central to the panel’s discussion as to why the Dallas-Fort Worth (DFW) industrial market is likely to weather severe economic storms was the notion that the metroplex is simply a different market today than it was in the recent past.

“Even as recently as 2010, this was still considered a secondary market,” said Weinberg. “International investors and big pension funds that got crushed buying in Dallas in the ‘80s or ‘90s still view the market similarly, but it’s different. Yields are lower because more investors are targeting this market, but it’s really an exciting time to be positioned where we are in DFW.”

Read the full story here.

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Texas Multifamily Finance Updates: Population growth of 14 percent spurns apartment activity

As regards new construction, what is the biggest point of optimism for the multifamily finance market in major Texas cities right now, and what is the biggest point of concern? 
Demographics and costs. Demographics continue to support the current construction pipeline as people and corporations continue to move to Texas given favorable business environment and low cost of living. Since 2010, the population has grown by 14 percent with the DFW adding over one million people.

Costs are always a concern for developers and the uncertainty from the trade war and tariffs has created a tough environment for general contractors to lock in pricing. However, lumber prices on garden-wrap and podium product has allowed general contractors to keep costs inline minimizing the net effect to developers. On the Chicago Mercantile Exchange, lumber futures contract prices have fallen by nearly 45 percent from highs in the summer of last year to around $350 per thousand board feet. 

What kinds of leverage ratios and terms are we currently seeing with Class A multifamily construction projects, and how that the needle moved on that lately? 
We continue to see efficient capital markets for multifamily construction. Depending on the experience and strength of the developer, lenders continue to provide 65-75 percent of construction costs. Floating rate spreads over Libor are attractive especially considering the market is pricing in an additional 50-75 basis point decrease from the Federal Reserve in 2019 with no increases in the forward curve for the next 10 years. For borrowers, this means that rates will likely decrease during construction and lease up.

Construction loans have been made more viable by the availability of multiple exit scenarios. The sales market has been robust with recently completed projects selling at competitive cap rates. In addition to a sales exit, lenders have been willing to refinance out construction loans during lease-up “Pre-Stabilization” providing developers an avenue to own projects long term and in certain instances return a portion of the equity. Life companies are providing permanent loans for projects in lease up with minimal premium in the rate compared to stabilized projects.

How significant have the effects of Federal Reserve policy in 2019 been on demand for construction financing for multifamily projects?
Very limited effect. The cost of capital remains attractive to borrowers and is not driven by the Fed’s decisions to cut the target rate.

The inversion of the yield curve caused and the dramatic decrease of the 10-year treasury has created a flurry of activity from borrowers and lenders for fixed-rate loans. Given that short-term rates, i.e., the Fed Funds rate, is not directly correlated to the long end of the curve, permanent financing remains very attractive for our clients.

Life companies are providing long-term construction financing in the four’s for 50-65 percent of cost loans with the ability to upsize the loan upon stabilization. 

How much growth have you seen/experienced in demand for construction financing for affordable housing, and how do you see that growing in the future?
It is still a small part of the market. Obviously, there is plenty of demand for the product across the country and the capital markets are extremely efficient on existing work force housing product. Unless a project is significantly subsidized, construction costs do not support the equity returns required to build for affordable renters (80 percent or less AMI).

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Dallas-Fort Worth Q1 Multifamily Market Report: Job Growth Gains Momentum, Fueling Renter Demand

Highlights:

Dallas-Fort Worth Multifamily market indicators Q1 2019
  • Many of the trends in the Dallas-Fort Worth multifamily market that prevailed in 2018 carried over to the first quarter of this year. Employers accelerated their pace of payroll growth, fueling demand for apartments. Construction of new units remained active.
  • Employment growth in Dallas-Fort Worth accelerated in the 12-month period ending in the first quarter, with 105,900 net new jobs added, a 2.9 percent gain.
  • Rents are on the rise, advancing 4.4 percent in the past 12 months to $1,131 per month at the end of the first quarter.
  • Investment activity has been very consistent in recent quarters. Sales activity during the first quarter closely tracked levels from one year earlier. The median price and average cap rates were similar to figures from 2018.

Read the report

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CoStar presents NorthMarq with 2018 Power Broker Awards for Top Sales Broker and Top Sales Firm

CoStar recently announced its 2018 Power Broker Awards, celebrating the top CRE firms and brokers in the United States. NorthMarq’s Shane Shafer, managing director of NorthMarq’s Los Angeles office and Taylor Snoddy, managing director of NorthMarq’s Dallas office were recognized as Top Sales Broker in their markets. NorthMarq’s Phoenix and Dallas offices each earned a place in the ranks of Top Sales Firms in their markets.

Shafer and Snoddy were recognized for achieving high levels of sales transaction volume in their regions. The Top Sales Broker award distinguishes individuals based on the CoStar market in which the individual is located and is calculated using pricing information from closed sales transactions contained in CoStar’s COMPS database.

See Shafer’s listing here.

See Snoddy’s listing here.

The Phoenix and Dallas offices were listed due to their high levels of sales transaction volume in 2018. The Top Sales Firm award is bestowed upon recipients based on the CoStar market in which the company is located and is calculated using pricing information from closed sales transactions contained in CoStar’s COMPS database.

See the Phoenix listing here.

See the Dallas listing here.

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Dallas Q4 Market Report: Expanding Payrolls Fueling Multifamily Market

Highlights:

Dallas 4Q2018 market indicators
  • The Dallas-Fort Worth multifamily market posted a strong year in 2018. Employers in the area were particularly active in expanding payrolls, fueling renter demand for apartments.
  • Rents rose 4 percent in 2018, ending the year at $1,123 per month. Rent growth is being supported in part by the delivery of new, more expensive units to the market.
  • The local investment market has remained very consistent in recent years, and sales velocity was steady throughout 2018. A broad mix of properties have changed hands, and there have been wide ranges in per-unit prices. Cap rates compressed by approximately 30 basis points in 2018, averaging in the low- to mid-5-percent range.
  • Vacancy ended 2018 at 5.5 percent. The rate rose 70 basis points from the third quarter to the fourth quarter, but vacancy is lower than one year ago. Vacancy has remained in a fairly tight range since year-end 2016. Vacancy increased at the end of the year in response to a high number of new deliveries in 2018.

Read the full report

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Steve Ashworth celebrates 20 years with the company

Steve Ashworth in our Dallas office celebrates 20 years with the company this month. Thanks for being part of the team, Steve!

Steve Ashworth in our Dallas office celebrates 20 years with the company

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Ron Reese celebrates 25 years with the company

Ron Reese in our Dallas office celebrates 25 years with the company this month. He’s a fan of the TCU Horned Frogs and an avid golfer, though he’s discovered the slots produce more wins than hitting the links. Thanks for being part of the team and “the best partner ever,” Ron!

ReeseR_Anniversary_LI

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Trends in Dallas Senior Living in 2018

By: Ruth Davis, vice president

With a plethora of new senior living projects popping up all over the Dallas MSA and beyond, those that really stand out are offering something different in addition to top-notch care. As noted in the recently held Bisnow Dallas Senior Living conference, the trend is still for profit luxury products that appeal to more discerning baby-boomer adult children of incoming residents.

Costly amenities from past developments, such as the fountain at the entry, are now designed for better functionality, such as a playground with an adjacent café and cozy outside patios, spas and therapy open to the public, all warmly welcoming family members and friends to encourage better interaction with happy residents. A state-of-the-art development outside of Dallas is incorporating such features, which also serve as a marketing tool. Since the playground, café, salon/spa, and therapy businesses are open to the public, this is designed to promote this community as the best in town and the place to send mom or dad when the time comes.

Another trend involves active adults (empty nesters) who are looking for larger units in central locations, perhaps near universities, culture and arts, golf courses, as well as fine dining choices. These seniors are active and social and demanding. They don’t want to be cooped up in their large suburban homes, but they do want sufficient well-designed space with all the bells and whistles in an entertaining area where they can enjoy the company of other like-minded active seniors. They want a new fun residence that feels like home. The university setting allows for continuing educational experiences where young and old can learn from each other. Older adults are still valuable as guest speakers. Multigenerational consideration will be a continued trend as the baby boomers step into the seniors world.

So is there room to grow for more seniors projects in Dallas? While some areas appear to be oversaturated in locations with low barriers to entry, others are still viable. Those who have thoroughly done their homework on market demand, feasibility, project design, with a best-in-class operator will reap the benefits, as will their residents.

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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.”

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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.

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Shifting Stack: Lender Competition Heats Up Amid Fewer Deals

NorthMarq Capital’s Jeff Erxleben was featured in the Capital Markets Issue of Commercial Property Executive.  The article, titled “Shifting Stack: Lender Competition Heats Up Amid Fewer Deals,”  explained that while investment volume and lending activity are showing signs of a spring rebound,  a “comeback” will be complicated to say the least.

Takeaways from the article included:

  • Lending activity rebounded heading into the second quarter of 2017, with CMBS leading the way.
  • Abundant capital and a shortage of deals have lenders rethinking their strategies to win deals.
  • Borrowers looking for higher leverage are tapping into the mezzanine space to fill the gap.

Read the full story here.

 

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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.

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Steve Whitehead featured in Texas Real Estate Business

Stephen Whitehead, senior vice president/managing director of NorthMarq Capital’s Dallas office, was a featured contributor in a Texas Real Estate Business article titled “Green Loan Market Heats Up.” The story focuses on how the financing programs offered by GSEs reward apartment owners with lower interest rates for reducing water and energy usage. Check out the full article here.

 

The article originally appeared in Texas Real Estate Business, May 2017. ©2017 France Media Inc.

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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.

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Jeff Erxleben interviewed by National Real Estate Journal

NREI“Now is a good time to be a borrower,” said Jeff Erxleben in the recent National Real Estate Investor story “Carpe Diem: Where is Debt Capital Coming From and Going To in 2017?” In the interview, Jeff discusses the current financing environment and the outlook for the rest of 2017. Read the article here.

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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.

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A Look Inside the Federal Reserve Bank of Dallas

Bobby Weinberg, vice president of NorthMarq Capital’s Dallas-based regional office, authored a web post for The Real Estate Council (TREC) titled “Inside the Federal Reserve Bank of Dallas.” In the post, featured in the December edition of TREC Wire,  Weinberg discusses a recent tour he took of the Dallas Fed that provided him a refreshing take on the federal reserve system and one of Dallas’ most iconic real estate assets.

Read the full story here.

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Patrick Minea, Jeff Erxleben promoted to Executive Vice President/Regional Manager

MINNEAPOLIS (Dec. 12, 2016) – NorthMarq Capital Presidents Jeff Weidell and William Ross announced today two promotions to the company’s executive team. Patrick Minea, managing director-Minneapolis, and Jeffrey Erxleben, managing director-Dallas, were promoted to the new position of Executive Vice President/Regional Manager, becoming permanent members of the company’s Executive Committee.

Both Patrick and Jeffrey will retain their local production roles but will add more oversight of NorthMarq Capital’s regional offices, primarily in achieving hiring, development, and production goals. Both will join the company’s Executive Committee, which includes Presidents Weidell and Ross; Jay Donaldson, president-Fannie Mae and FHA Platforms; Travis Krueger, chief financial officer; Mike Myers, chief operations officer; and Eduardo Padilla, chief executive officer.

“Both Jeff and Pat have excelled in diversified production experience, working with multiple capital providers, and uphold the NorthMarq values of quality, fairness and teamwork,” said Weidell.

“We are pleased to have such strong leaders to add to the Executive Team as we position our company for continued success,” said Ross.

Pat has been in real estate finance since 1987 and joined NorthMarq Capital in 1992. He is a proven producer who is highly experienced in all areas of debt and equity finance, and has been a Managing Director of the Minneapolis Office since 2000. He is a member of the Minnesota Multi-Housing, Minnesota Shopping Center Association, ULI and the MBA. He served as Treasurer for the NAIOP Minnesota chapter and on the NAIOP Board for three years. He obtained his undergraduate degree from Saint John’s University.

Jeffrey is responsible for managing NorthMarq’s Dallas office and for originating debt and equity transactions throughout the United States. He currently serves on NorthMarq’s DUS/FHA Advisory Board, Freddie Mac’s Seller Servicer Advisory Board and has served on NorthMarq’s Producer Council. He is also vice-chair for the Mortgage Bankers Association’s (MBA) Originations Council, an active member of within National Multifamily Housing Council (NMHC) and active within the Folsom Institute for Real Estate. He joined NorthMarq in 2002 and obtained his bachelor of arts from Southern Methodist University.

About NorthMarq Capital
NorthMarq Capital, the largest privately held commercial real estate financial intermediary in the U.S., provides debt, equity and commercial loan servicing through its 36 offices across the U.S. The company has built long-term relationships with life companies, CMBS platforms and local, regional and national banks and has a long track record of multi-family loan origination through Freddie Mac Program Plus™, the Fannie Mae DUS program and through FHA, resulting in nearly $13 billion in annual production volume and a loan portfolio of more than $47 billion. For more information please visit northmarqcap.wpengine.com.

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A Look Inside NorthMarq Capital

Jeffrey Erxleben, senior vice president/managing director of NorthMarq Capital’s Dallas-based regional office was recently interviewed by The Real Estate Council (TREC). The article, titled “A Look Inside NorthMarq Capital” appeared in the July 19 edition of the TREC Newswire.

Read the full story below to find out what separates NorthMarq Capital from the competition, as well trends in the Dallas CRE industry.

What sets NorthMarq apart from other companies in investment banking?
NorthMarq is the nation’s largest privately held servicer and provider of commercial real estate debt and equity. As a direct lender, we provide creative financing solutions through Freddie Mac, Fannie Mae, FHA, as well as our correspondent life company relationships. We are known for our deep relationships with our lenders and borrowers, our commitment to the life of the loan and our certainty of execution.

What is something we might not know about NorthMarq?
Our ownership, the Pohlad Companies based in Minneapolis, is a diversified holding company that started with a 60-year focus in banking and finance. The organization now spans several sectors: sports and entertainment, which includes a movie production studio, a radio station and a Major League Baseball team, the Minnesota Twins; commercial real estate, which includes investment and development firm United Properties, commercial mortgage banking firm NorthMarq Capital, and two companies affiliated with Cushman & Wakefield serving Minnesota, Idaho, Nevada, Washington and Utah; and the automotive sector, owning with more than 20 automotive dealerships. The Pohald Companies also has a significant presence in private investing with strategic investments through PFCF (the Pohlad Family Capital Fund) and PFEF (the Pohlad Family Energy Fund). These investments generally range in value from $5 to $40 million.

More than 2,500 professionals are employed in more than 30 companies operating across the United States. Marquette Companies serves as the holding company for many of our operating businesses. In addition to its business interests, the Pohlad family has a long history of community involvement and charitable giving through the Pohlad Family Foundation. Our businesses contribute at the local and community level as well.

What trends are emerging in Dallas for investment banking? Are those trends the same across the country?
Consolidation of investment banking firms is a well-established trend in Dallas. It is most efficient for a borrower to employ a firm with experts that source the entire capital markets on a direct basis. We see that same trend nationally as well.

How has working for NorthMarq benefited your career?
Throughout my career at NorthMarq I’ve been fortunate to be mentored by the leadership within our company. NorthMarq has been focused on growing our company and largely committed to growing organically. Equally as important, NorthMarq’s culture has always emphasized working collectively as a team where all of our knowledge combined is far more effective than any single individual.

NorthMarq employees have been engaged with TREC since 2002 through numerous leadership positions and many are graduates from the ALC program, including yourself. What about TREC not only engages you personally, but also NorthMarq as a company?
In addition to the connections within our industry, TREC provides a way for us all to have a meaningful impact on the lives of others within our city. The work TREC does makes a difference!

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