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New Jersey Lenders Locked in Competition for Multifamily Assignments | The Commercial Observer

http://commercialobserver.com/2013/03/new-jersey-lenders-locked-in-competition-for-multifamily-assignments/[5/3/2013 12:04:11 AM]

BETABEAT POLITICKER GALLERISTNY COMMERCIAL VSL POLITICKERNJ

Mortgage Observer

New Jersey Lenders Locked inCompetition for Multifamily Assignments

The Garden State has become fertile ground for developers, and commercial real estatelenders both large and small are looking to get in on the action, while others are looking toretain and expand the market share they already have.

Competition among lenders is quickly growing as more people look to rent in New Jersey, themost urbanized state in the country, 94.7 percent of whose population is centered in urbanareas, according to 2010 figures from the U.S. Census Bureau. That abundance ofmultifamily properties just west of the Hudson River coincides with university expansions, newretail and office properties and other large real estate projects throughout the state.

Brian Whitmer, a senior director in investment sales for the New York tristate area atCushman & Wakefield, works out of northern New Jersey and went through the pipelineof multifamily developments he sees in the works there. Of the 22,968 units he found in the

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NJ Multifamily Harvest

pipeline in northern New Jersey, 59 percent, or 13,538 units, are in the Gold Coast—areasalong the Hudson River like Jersey City, Hoboken and Weehawken.

“Over the last two years there has been anunprecedented number,” Mr. Whitmer said ofdevelopment of multifamily properties in the area.He added that several factors are driving it, chiefamong them improving employment conditionsthat have driven up occupancy, but also peoplelooking for an alternative to Manhattan andBrooklyn rents.

“Right now multifamily in New Jersey is anextremely hot property,” said RussellMurawski, first senior vice president at ValleyNational Bank, which has been lending formultifamily and other commercial real estateprojects in New Jersey for over 20 years.

“Younger couples in the state look at their abilityto buy a house, particularly in central to northern New Jersey where prices remain steep, andvery often they realize that No. 1, they may not be able to afford it, and No. 2, owning realestate now isn’t the same as it was 15 to 20 years ago, when there was a guaranteedappreciation,” Mr. Murawski told The Mortgage Observer.

“All of the bankers know that this is a very strong market, and they’re all sharpening theirpencils,” said Mr. Murawski. “We compete with the smaller community banks, and we alsocompete with the big banks—the M&Ts, the Chases and the Investors—on a consistentbasis.”

Valley National’s commercial real estate department oversaw about $1.5 billion in assets forNew Jersey as of December 31, 2012, roughly half of its total volume for New York and NewJersey combined. About one-third of the bank’s New Jersey portfolio is made up of multifamilyloans.

“There are a lot of prime areas throughout the state,” Mr. Murawski said. “We’re starting tosee growth in Newark, Jersey City, Carteret and other places near the port. Our majorfootprint has always been northern New Jersey, and we’re continuing to see strength in thatregion, especially in Essex and Morris Counties.”

The Wayne, N.J.-based bank closed on a large mall acquisition in western New Jersey and atownhouse project in Morris County in January 2013, among other transactions. ValleyNational declined to give the names of those properties, due to client confidentiality. Mr.Murawski said the bank plans to increase its lending for multifamily developments in the stateby at least 10 percent this year.

“We brought in a couple of new people that have contacts outside of the contacts we’ve beenworking with historically,” he said. “In addition to that, we will continue to ramp up anaggressive sales culture, understanding that we’ve got competition and we need to be therefirst.”

Mr. Murawski said the bank would remain competitive on interest rates while focusing on theneed to build lasting relationships with its present and future clients. “We’ve grown from asmall local community bank into a fairly large institution, but we try to keep the principles of a

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community bank, where we know our customers, know their accountants and lawyers andeveryone that’s involved,” he said. “We try to stay with the more local developers, owners,operators and managers, and we try not to get out of our own market.”

Thomas Didio, a senior managing director at mortgage brokerage HFF, said that as thegrowth in the number of lenders focusing on multifamily outpaces the rate at which newdevelopments get completed, banks and mortgage brokers are being forced to compete forthose deals by offering the best incentives to borrowers.

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topics: 1401 Hudson Street, 290 George Street, 300 Bunn Drive, 300 Somerset Street,Berkshire at The Shipyard, Brian Whitmer, Copperwood, Cushman & Wakefield, GinoMartocci, HFF, Harrison Station, Hartz Mountain Industries, Hillier Properties, Hudson CitySavings Bank, Investors Bank, Israel Schubert, Jack Morris, Kevin Cummings, M&T Bank,Meridian Capital Group, Mortgage Beat, Mortgage Observer, PNC Financial Services Group,Roseland Property, Russell Murawski, Rutgers University, SJP Properties, The Sheffield atEnglewood South, The Vanguard at The Shipyard, The Woodmont Company, Thomas Didio,U.S. Census Bureau, Valley National Bank, freddie mac, wells fargo

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