Former Chief Executive Officer of Freddie Mac, David Brickman, who stepped down this month, takes the helm of a new agency lending platform supported by mortgage broker Meridian Capital Group and investment firm Barings.
"We have a significant opportunity to create one of the leading lenders in the commercial apartment building market," Brickman said in an interview. "The combination of low interest rates and a hopefully recovering and stabilizing degree in 2021 with the vaccine and additional incentives should result in a strong year with a total volume of more than $ 300 billion."
Freddie Mac and Fannie Mae's multi-family loans were capped at $ 70 billion each for that year.
The new platform, yet to be named, will acquire the assets and liabilities of Barings Multifamily Capital LLC, pending approval from federal government sponsored companies. It is expected to benefit from Meridian's efforts to create it, the company's president, Yoni Goodman, said in an interview. In 2020, Meridian raised nearly $ 40 billion in commercial real estate loans, of which more than $ 25 billion was multi-family debt. More than a third of this was done by Fannie Mae and Freddie Mac.
The two real estate giants play a crucial role in the real estate market. They buy mortgages from lenders and then package the loans in securities with guarantees that are sold to investors. The US took it over during the 2008 financial crisis, and Congress and two successive governments have failed to agree on a plan to end state control.
Brickman, who has been with Freddie Mac since 1999, announced his planned departure to the board in November. In addition to his role as CEO of the credit platform, he will become Executive Chairman of Meridian and Senior Adviser of Stone Point Capital, a private equity firm that has acquired a minority stake in Meridian in New York. The proceeds will be used to fuel the company's expansion into new areas such as agency contracting and the development of its existing businesses such as mortgage brokerage, investment sales and retail leasing, Goodman said.
Securities backed by multi-family mortgages have largely held up during the pandemic, unlike other commercial mortgages such as those for retailers and hotels, Manus Clancy, senior managing director at data provider Trepp LLC, said in a recent interview. Apartment building owners are unlikely to find themselves in similar hardship, Clancy said.