Agencies Are The Best for Multifamily

Gary Tenzer is managing director and principal at George Smith Partners.

LOS ANGELES—“I think the agencies are better than the banks right now,” Gary Tenzer, managing director and principal at George Smith Partners, tells GlobeSt.com about the tremendous activity in agency lending. The agencies have become ideal for multifamily borrowers, thanks to competitive pricing and a lack of competition from other capital sources. “The agencies are really going gangbusters,” says Tenzer. “They are putting out money and are very active, and they have very aggressive pricing. Clearly, they beat CMBS, and for multifamily, it is really the way to go.”

Tenzer adds that the agencies really don’t have a lot of competition at the moment, especially following the collapse of CMBS and banking that occurred at the beginning of the year. That volatility left the agencies as an appealing choice for borrowers. “The real competition that they have are commercial banks, and for really big loans, commercial banks can’t do them,” says Tenzer. “If you are talking about the $1 million to $50 million price range, then commercial banks can do those. If they are priced competitively, they are either floaters over LIBOR with a cap or some banks will write a fixed-rate loan. But, I think the agencies are better than the banks right now.” Overall, Tenzer says that the agencies want A and B product, but may even take C+ in the right situation.