In an effort to expand the depth and breadth of its agency lending operations, Bethesda, Md.-based Berkeley Point Capital has added Mark Van Kirk, director of HUD's Office of Asset Management. Van Kirk will be responsible for Federal Housing Administration (FHA), seniors, affordable, and student businesses at Berkeley Point.
Berkeley Point’s emphasis on these business lines results from changes in federal housing policy.
“To the greatest extent, it’s a function of the FHFA [Federal Housing Finance Agency] mandate and focus on affordable housing and ensuring that the government guarantee is used for appropriate mission-based purposes,” says Jeff Day, CEO of Berkeley Point. “To the extent that we can do more FHA, seniors, and affordable, that’s very directly in line with their [government] requests. It’s important for us to be in alignment with their strategy.”
But Day downplays the uncertainty surrounding the future of Fannie Mae and Freddie Mac as driving the Van Kirk hire and Berkeley Point’s diversification.
“We feel very consistent that the government guarantee supporting multifamily rental and associative products will be around for an extended period of time in some form,” Day says. “This is really of a function of an implementation of strategy around making sure that we are relevant to our clients, that we are a strategic partner to our clients, and that we are a solutions provider. In order to do that, you have to have all of the products and services that your clients are seeking. It’s more an opportunistic play than a defensive play.”
The Van Kirk addition comes more than three months after New York-based Cantor Commercial Real Estate (CCRE) completed the acquisition of Berkeley Point. The purchase is another in a long line of major banks buying agency lenders, such as Capital One Financial's purchase of Beech Street Capital last November. Since both the Berkeley Point and CCRE management teams are well versed in the mergers-and-acquisitions process, Day says the transition to CCRE has gone well so far.
In fact, Day says it has been business as usual for Berkeley Point, which has seen its business remain on pace with last year’s numbers even though the agencies have seen a major decrease in volume in 2014. But the acquisition expands the range of Berkeley Point's offerings, giving it more bullets in its arsenal.
“We now have the availability of short-term bridge financing and acquisition and rehab financing,” Day says. “We also have [commercial mortgage-backed securities] CMBS financing and a larger footprint. There are 15 offices and 300 people on the ground marketing our GSE [government-sponsored enterprise] products.”
And even more offerings could be coming in the future. “We’re looking very closely at preferred equity and equity,” Day says. “It’s not to compete with our clients but to complement our first mortgage financing
In addition to banks buying agency lenders, another big trend is lenders hitching their wagons to brokerages. Berkeley Point is also “very interested” in the multifamily investment space as well.
“We have a strategic plan that’s a multi-year plan that contemplates building out the full spectrum of products and services for our multifamily clients,” Day says.