Student Housing Business

NOV-DEC 2017

Student Housing Business is the voice of the student housing industry.

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CAPITAL MARKETS November/December 2017 StudentHousingBusiness.com 76 Strength in Numbers The continued vitality of the student housing sector bolsters a steady volume for capital markets activity. By Randall Shearin R Refinancing, permanent financing and construction lending continue to keep capital markets players busy within the student housing sector. In addition to banks and government-sponsored entities, the maturation of the sector has allowed institutional foreign capital and insurance company lenders to become options available to borrowers, widening their availability of debt financing possibilities. "It looks like we are about to finish up another strong year in student housing," says Stephen Whitehead, senior vice president and manag- ing director for Northmarq in Dallas. "Rates are at historically low lev- els and very favorable loans are available for acquisitions. More portfo- lio lenders have added student housing as a standard product type for their programs versus doing them on a selective basis." A blip in the Treasury rate stalled many deals after the 2016 Presiden- tial election, but the market quickly rebounded and regained any lost ground. "Debt financing remains readily available for experienced owners and developers," says Ryan Welsh, vice president, multifamily, at PNC Real Estate. "Lenders from a variety of capital sources aggressively compete to finance the right projects. Well performing properties and new develop- ments in markets that show a need for new or revitalized student housing can generally obtain financing." While new lenders have entered the sector, the tried and true banks and government- sponsored entities (GSEs) — Freddie Mac and Fannie Mae — are still the go-to sources for most financing activity. "Fannie and Freddie are still the leaders in permanent financing," says Whitehead. "Borrowers are requesting either long term permanent loans or they may want to have the flexibility to sell in the next 12 months and are putting on floating rate agency debt." Freddie Mac is forecasting 2017 as a record STEPHEN WHITEHEAD SVP and Managing Director, Northmarq

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