Prudential Johnson Apartment Capital Express will originate multifamily loans from $5 million and above in Arizona, California, Maryland, Washington, DC and Virginia. David Durning, senior managing director at Prudential Mortgage Capital, comments that the new partnership "not only expands our financing capabilities to Freddie Mac's Program Plus, but also highlights our commitment to multifamily financing." He adds, ""Our relationship with Johnson stretches more than 20 years" and that the new partnership will build on that.

Johnson points out that his firm "has been a Freddie Mac Program Plus lender for many years, and Prudential has been a robust multifamily lender for many years." Prudential is also a targeted affordable Freddie Mac lender, he adds.

"We've been in discussions with Prudential for a long time, contemplating different strategic initiatives that we could take to improve both of our businesses," Johnson says. Although the new strategic relationship does not require Johnson Capital to open new offices, he says that the Irvine-based firm was already staffing up existing offices and looking to open new locations in markets where it does not have a presence. The company is privately held and debt free, he says, so it "has a lot of flexibility" that enables it to grow whenever market conditions warrant.

The Johnson-Prudential partnership is launching at a time when multifamily financing is growing somewhat more competitive, according to Johnson, although the GSEs remain the main players. "Right now, for the first time in nearly two years, there are other sources of capital actually being competitive on non-recourse financing, particularly some of the insurance companies," Johnson explains. However, Freddie Mac, Fannie Mae and FHA, continue to dominate the multifamily sector as they have since about the middle of 2007, when they remained in the market to provide liquidity when other lenders disappeared. The GSEs have remained very competitive, engaging in underwriting that "is generally more like what real estate financing traditionally was," he says.

Johnson Capital is one of the largest real estate investment banking and commercial mortgage brokerage firms in the nation. Since its inception in 1987, its aggregate transaction volume has grown to over $25 billion and it has expanded to 15 domestic offices.