When 2008 began, multifamily professionals were hopeful the credit crunch, which started in mid-2007, was beginning to turn around.

But as the year wore on, it became clear that 2008 would proceed not with a bang, but a whimper.

Fannie Mae and Freddie Mac were the lone bright spots in multifamily fi nance this year, but their prospects became clouded after being seized by the government in early September amid fears of insolvency. A string of collapses, including Lehman Brothers, Wachovia, Washington Mutual, Merrill Lynch, and AIG, to name a few, sent Wall Street limping into the fourth quarter.

Given the ties between fi nancing availability and transaction volume, it's not surprising that property sales were signifi cantly down this year. Commercial property sales in the second quarter were down 68 percent year-over-year, and apartment sales were down 45 percent through Sept. 1 compared to 2007, according to Real Capital Analytics.

Some of the year's biggest deals were closed in its fi rst fi ve months, before lender spreads began to erupt and lenders grew increasingly cautious. Notably, some of 2008's most signifi cant deals were in niche markets.

The largest public deal of the year, the $1.71 billion sale of an 86-community portfolio from UDR to a partnership between Steven D. Bell & Co. and DRA Advisors, closed in March. UDR was so concerned about fi nancing availability, it helped pre-arrange the debt, a $1.35 billion credit facility from Fannie Mae, before it had found a buyer (see "Advance Financing").

Another huge deal was the sale of Simpson Housing Solutions, a 270- property, 27,000-unit portfolio, to a partnership of MacFarlane Costa Housing Partners and Avanath Aff ordable Capital. The deal was in the works for about two years and refl ects the maturation of the aff ordable housing industry from niche market to a recession-proof desirable asset class (see "The Value of Affordable Housing").

American Campus Communities' $1.4 billion acquisition of GMH Communities Trust's student housing portfolio refl ected that market's continued evolution, and it accounted for the secondlargest deal of the year (see "Sitting Pretty").

Springhill Lake Apartments, the largest single garden community in the Mid-Atlantic region, was bought for $275 million in June after the original owners scrapped plans to build condos on the site (see "One Big Repositioning"). And despite the credit crunch, a partnership of Carlyle and Extell pulled off the largest construction loan of the year, at $613.6 million, for two luxury high-rises on Manhattan's Upper West Side (see "Under Construction").

AvalonBay furthered its transit-oriented development strategy when it broke ground in July on Avalon Walnut Creek at Contra Costa Centre, a $400 million public/private development that will include 422 residential units and 100 condominiums. Urban Partners broke ground on University Gateway, a 421-unit student housing development near the University of Southern California. The deal had been held up for three years as rival student housing owners mounted an aggressive campaign. But Urban Partners prevailed and procured a $167.5 million construction loan from Wells Fargo's Merchant Banking Group.

The year also saw a rash of failed condo deals being scooped up by apartment operators, and a notable mention goes to Laramar Group, which snatched three failed condo deals in Florida at nearly half their value by assuming the original note and taking the properties through foreclosure (see "Setting a New Course").

Finally, Freddie Mac's $548 million tax-exempt bond securitization (TEBS) deal with Citi Community Capital could also be called a deal of the year. The largest TEBS transaction in Freddie Mac history closed just one week after it was taken over by conservators and proved to a skeptical market that it was indeed open for business.

In all, 2008 saw creative deals refl ecting that no matter how tough things get, opportunities are born from a crisis.