Apartment Realty Advisors (ARA) has plunged into the debt financing market through a joint venture with CWCapital.
Under the new venture, called ARA Finance, the Atlanta-based ARA will offer its customers access to CWCapital’s multifamily agency lending platforms of Fannie Mae, Freddie Mac, and Federal Housing Administration loans.
In today’s credit-constrained environment, it’s become critical for brokerage and advisory firms to offer debt solutions. Holliday Fenoglio Fowler, for instance, is a top Freddie Mac lender, while Marcus and Millichap has relationships with several lenders.
The agreement expands ARA’s business model beyond the company’s brokerage and advisory services. The deal also expands CWCapital’s deal volume and footprint.
“ARA is really strong in some major markets that we don’t have a presence in,” says Don King, head of GSE lending at Boston-based CWCapital, citing Denver and San Francisco, specifically. “And being able to leverage off of their relationships with large and small multifamily owners to grow our debt platform is key.”
The strategy of the joint venture focuses on presenting buyers with ready-made financing packages. CWCapital gets involved early in the process, quoting loans on assets before they even hit the market. This allows ARA to present buyers with financing solutions once the property is marketed.
So far, CWCapital has quoted more than $1 billion in business through the venture, though no loans have closed yet in the early days.
The companies had been in talks for about a year. CWCapital’s Craig West, an Atlanta-based senior vice president, has had a longstanding business relationship with ARA’s Southeast-area brokers, which provided a foundation for the relationship to take hold.
A six-member executive committee will oversee the joint venture. Michael Berman, along with King and West, will represent CWCapital, while Marc deBaptiste, Blake Okland, and Jeff Pritchard will represent ARA. Additionally, ARA chairman Gary Kachadurian will serve in an advisory role.