Greystone Seeks Multifamily Senior Loan Sales to Banks After Fed Cut
After years of a slowdown in commercial activity — the trend might finally be breaking, at least for the multifamily sector, according to Greystone CEO and founder Steve Rosenberg.
"We're definitely seeing more private capital going in and competing with the agency business," he told GlobeSt., while further noting that banks in the recent past were a little more hesitant about their holdings but are now starting to open up to lending once again.
The change comes as the Federal Reserve began this month what is expected to be the first of multiple rate cuts for 2025. That, coupled with the loosening of regulations such as on loan ratios, is bolstering activity, Rosenberg admitted.
Selling Off Seniors While Keeping Junior Pieces
That's creating opportunities for Greystone, which holds $5 billion in capacity for bridge loans. Specifically, Rosenberg sees a fit with banks, where loans get originated, while Greystone sells off a senior piece to a financial institution and the company keeps the junior part.
"It gets the bank what they want. It gets the client what they want, and we end up holding a junior piece," Rosenberg explained, adding that banks want to compete with agencies.
"Hopefully, the yield that is [at] market [value]," he said.
The asset manager overall is on pace to complete $12 billion in origination volume in 2025.
Keeping Tabs on B Piece Acquisitions and Affordable/Workforce Housing
In addition to lending, Greystone also sees opportunities from an acquisition standpoint. Particularly, the company wants to target B pieces on bridge loans in the multifamily segment. Another focus is on workforce and affordable housing opportunities nationally, according to Rosenberg.
Rosenberg said that the company thrives at its best inside markets where its balance sheet is needed more or where he describes as places that it's needed to get "creative" in. Currently, Greystone is analyzing where those are. In 2021 and 2022, when interest rates were low, Rosenberg noted that networking at high-end venues such as restaurants made a difference. Now the advantage has shifted to those who have the most equity and flexibility to deploy capital, he added.
Generally, for multifamily, most of the interest right now is concentrated in the Southeast, Southwest and Mid-Atlantic, according to Greystone. "We're not seeing as much in the middle of the country," Rosenberg admitted.
Sunny Year Lies Ahead as Construction Slows
Overall, Rosenberg forecasts positives for the multifamily space as we approach the end of 2025 and head into 2026. He noted that construction has been slowing in the Sunbelt (a place that has been overbuilt in the last couple of years or so to keep up with the demand), which should lead to better fundamentals.
"I think that people are generally feeling like rents for a large part of the country, [including the] southeast, the smile states, that rents will be going up, people are feeling that interest rates will be coming down. So I think there's generally a pretty optimistic view about transactions," he said.
The bullishness also extends to affordable housing. The recently passed One Big Beautiful Bill Act provides a 12 percent permanent boost to the nine percent annual amount that states can allocate for the Low-Income Housing Tax Credit, starting in 2026.
"Between the increase in tax credits, the new opportunity zone legislation (also, in the OBBB) and cities needing affordable housing, I'm very bullish on the affordable housing industry," Rosenberg emphasized.
Source: GlobeSt/ALM