PNC Real Estate originated $7.2 billion in debt for the multifamily industry last year, claming the top spot on the Mortgage Bankers Association’s (MBA) annual origination rankings.
The jump to No. 1 was a big leap for the Pittsburgh-based bank as it more than doubled its origination volume from the year before when it produced $3.4 billion. The company’s 2008 numbers were helped greatly by its acquisition of ARCS Commercial Mortgage in July 2007 as well as its acquisition of Red Commercial Mortgage last year.
PNC says its record year is also a result of its large increase in credit facilities for real estate investment trusts (REITs). “Repositionings by REITS and other large operators moving from unsecured to secured financing structures accounted for a great deal of the production increase,” says Timothy White, president of PNC ARCS.
PNC was followed in the rankings by Wachovia ($6.8 billion) and Wells Fargo ($6.1 billion). Wachovia’s fall to the second spot was a precipitous drop for the once high-flying firm. In 2007, the company originated more than $20 billion in multifamily debt—about $10 billion more than the No. 2 ranked lender, Washington Mutual. Compare that to the 2008 figures, and that’s a whopping 67 percent decline for Wachovia, year-over-year.
The rankings are based on a voluntary survey completed by each firm, so it’s not as complete as the MBA’s origination rankings released in the fall, which is based on federal Home Mortgage Disclosure Act data.
While Washington Mutual did not participate in the survey, chances are that the company saw a hefty drop in production last year as well. The buzz in the lending community is that Washington Mutual’s multifamily platform, now part of Chase Commercial Term Lending, is a dwindling presence, lending less and less for the past year.
PNC’s rise is all the more impressive when you consider the economic environment facing lenders in 2008. “For the year, we saw big declines in originations, and those declines continued and grew larger as the year went on,” says Jamie Woodwell, the MBA’s vice president of multifamily research. “Originations were down 80 percent in the fourth quarter of 2008 compared to the fourth quarter of 2009: That’s the environment in which firms were operating last year.”
Among life insurance companies, Prudential was again the top multifamily lender, producing more than $3.2 billion in 2008, with Pacific Life Insurance Co. coming a very distant second at $464 million.
Overall, Capmark Financial Group originated more than $6 billion in 2008 to claim the fourth spot, followed by Deutsche Bank Commercial Real Estate, at more than $4.8 billion. It’s no surprise that the top five lenders all had strong agency lending platforms, with Fannie Mae, Freddie Mac, and the FHA accounting for an overwhelming majority—about 90 percent—of the multifamily debt market last year.
According to the MBA, PNC (including Red Mortgage Capital) was the top Fannie Mae lender in 2008, originating $5.6 billion last year, while Capmark claimed top Freddie Mac honors, producing $3.9 billion in 2008. Capmark was also the top FHA lender last year, to the tune of $464 million, with PNC close behind at $450 million.
Top 10 Multifamily Lenders of 2008 (in millions)
1. PNC Real Estate - $7,269
2. Wachovia - $6,854
3. Wells Fargo - $6,121
4. Capmark Financial Group - $6,021
5. Deutsche Bank Commercial Real Estate -$4,845
6. Prudential Mortgage Capital Co. - $3,235
7. CBRE/Melody - $3,099
8. Grandbridge Real Estate Capital - $1,844
9. NorthMarq Capital - $1,414
10. M&T Realty Capital Corp. - $1,405
Top Five Fannie Mae Originators of 2008(in millions)
1. PNC Real Estate - $5,618
2. Deutsche Bank Commercial Real Estate -$2,469
3. Prudential Mortgage Capital Co. - $2,373
4. Wachovia - $2,197
5. Wells Fargo - $1,889
Top Five Freddie Mac Originators of 2008 (in millions)
1. Capmark Financial Group -$3,926
2. CBRE/Melody - $2,584
3. Deutsche Bank Commercial Real Estate -$2,241
4. Wachovia - $2,177
5. NorthMarq Capital - $1,414
Top Five FHA Originators of 2008 (in millions)
1. Capmark Financial Group Inc. -$464
2. Prudential Mortgage Capital Co. - $307
3. Wells Fargo - $306
4. Capital Funding Group, Inc. - $172
5. PNC Real Estate - $163