Detroit – GMAC Commercial Holding Corp. (GMACCH), which was recently acquired by an investor group, has changed its name to Capmark Financial Group, Inc. The name change is being made effective in the second quarter of this year.
GMACCH/Capmark focuses on real estate finance, investments, and services (including multifamily housing). General Motors Acceptance Corp., the financial services subsidiary of General Motors Corp. (GM), sold 78 percent of its equity in GMACCH to a group of investors led by affiliates of Kohlberg Kravis Roberts & Co.; Five Mile Capital Partners, LLC; and Goldman Sachs Capital Partners. The transaction totaled almost $9 billion in a combination of cash and repayment of inter-company loans.
The sale helped GM add to its cash hoard at a time of unprecedented problems at the automaker that have made some observers fear it was in danger of bankruptcy. GM’s problems were also dragging down the credit rating of GMACCH, something that won’t happen with the new Capmark, which also announced that it had secured a $10.8 billion loan facility from a syndicate of banks.
“With increased access to capital, a new name and investment-grade ratings, the company can build on its many strengths,” said Dennis Dammerman, the former vice chairman of General Electric and chairman and CEO of GE Capital Corp. who was appointed independent chairman of Capmark.
Fannie Mae names new risk, audit leaders
As Fannie Mae prepared itself for the release of the Office of Federal Housing Enterprise Oversight’s final report on its three-year investigation into the mortgage finance company’s accounting practices in late May (see page 10), the government-sponsored enterprise (GSE) shuffled some top posts.
Fannie named Enrico Dallavecchia as its executive vice president and chief risk officer. Dallavecchia had previously served as JPMorgan Chase & Co.’s head of market risk management for investment and retail financial services.
In addition, Dennis Beresford joined the GSE’s board of directors and will chair the board’s Audit Committee. Beresford has served as a professor of accounting, an executive at Ernst & Young for 25 years, and chairman of the Financial Accounting Standards Board.
In memoriam: Jane Jacobs
Jane Jacobs, an urban planning pioneer and advocate for smart growth, died in April at the age of 89. New Urbanism, smart growth, and HOPE VI redevelopments of public housing received much of their inspiration from her writings.
Jacobs was internationally renowned for books such as The Death and Life of Great American Cities, which was published in 1961. That book was a critique of the urban renewal policies in the United States in the 1950s.
Rosenberg leads Place Properties
Place Properties, a real estate company specializing in the university and military housing markets, appointed Jim Rosenberg president and chief operating officer in late April. He has more than 30 years of experience in hotel and multifamily real estate.
Previously, Rosenberg was managing director for a Fortress Investment Group entity that acquired and managed apartments in Germany. He was also president of the Charles Smith division of Archstone-Smith.
Post hires Harris
Post Properties added Jeffrey Harris to its management team as senior vice president of investments. He will be located in Charlotte, N.C.
Harris had served as executive vice president of Grubb Properties, a North Carolina-based multifamily and mixed-use developer.
Greystone hires West Coast director
Hal Rose has joined Greystone Servicing Corp., Inc.’s Fannie Mae team as managing director of West Coast production.
Rose has more than 35 years of experience. He most recently led the income lending group of First Federal Bank of California, a subsidiary of FirstFed Financial Corp. He was also an executive vice president for ARCS Commercial Mortgage Co., LLP.
Improving cash flow
I am an attorney-at-law specializing in real estate and have a large landlord-oriented practice. A wonderfully successful cash flow strategy that I have implemented for my clients is the Automatic Rent Debit Program.
When a new tenant signs a lease, have that tenant give the landlord access to the tenant’s bank account so the landlord’s bank can automatically withdraw rent from the tenant's account on the first day of each month. This obviously eliminates the vast majority of nonpayment scenarios. However, numerous advantages exist for the tenant as well.
By participating in the automatic debit program, the tenant is relieved of the administrative inconvenience of writing rent checks, addressing envelopes, affixing postage stamps to those envelopes, and mailing the envelopes. Furthermore, the tenant is protected from the possibility of rent checks being lost by the U.S. Post Office. In short, the automatic debit program protects the tenant from ever having to pay late fees, interest, and other delinquency service charges.
For these reasons, an automatic debit program is an accounting improvement that dramatically enhances the landlord’s cash flow while providing important and tangible benefits to the tenant.
– Marc Leonard Ripp, esq., Short Hills, N.J.
Apartment sales cool a little
Last year’s hot-hot pace of apartment sales cooled a little in the first quarter of 2006, according to a new survey by the National Multi Housing Council (NMHC).
“While investment activity continues at historically high levels, there has clearly been some pullback from the extraordinary levels of late 2005,” said Mark Obrinsky, NMHC’s chief economist.
He noted that higher interest rates had begun to take a toll on borrowers’ ability to leverage their properties, which could have an impact on the types of buyers in the market. “The big rate-driven advantage enjoyed by private buyers over institutional competitors appears to be diminishing,” said Obrinsky.
NMHC’s Quarterly Survey of Apartment Market Conditions rates market health on an index where a reading of 50 indicates no change, a reading greater than 50 indicates improving conditions, and a reading below 50 indicates deteriorating conditions. The sales volume index in the survey recorded 35 points, its lowest level since January 2002. Only 9 percent of the respondents to the survey indicated that sales volume was higher than it had been three months earlier.
Debt financing showed a dramatic drop in the survey, registering a reading of 21 points. That was the third-lowest level on record and the lowest since January 2000, according to NMHC. Meanwhile, the equity-financing index indicated little had changed in the previous three months, registering a reading of 50 points.
Despite the slight downward trend, the survey’s reading of market tightness (which tracks vacancy rates and rent movement) remained at 83, the fourth consecutive quarter that it registered 80 or higher.
Housing boom over, says Greenspan
New York – Former Federal Reserve Chairman Alan Greenspan declared in May that the housing boom is over.
“I think we can safely say that with a strong degree of confidence,” he said in a speech at a Bond Market Association anniversary dinner, according to The Associated Press. “This has been quite an extraordinary boom, [but] home sales are off, applications are off, everything is going in the same direction.”
However, there is “no evidence that home prices will collapse,” Greenspan added. He also said that it’s uncertain how housing price declines will impact consumer spending.
The housing market registered record-setting sales for each of the past five years. But interest rates on 20-year fixed mortgages hit 6.6 percent as of May 18, their highest level since 2002. The current median home price also fell to $217,900 in the first quarter of 2006 from $225,300 in the last three months of 2005, according to The National Association of Realtors.