Multifamily Deals Multiply

As the pace of commercial real-estate sales grinds almost to a halt amid financial-market instability and concerns about property values, deal activity is still brisk in one corner of the industry: multifamily housing.
Fueling the deals and buoying apartment values is the rare availability of financing, thanks to government-sponsored Fannie Mae and Freddie Mac. Prompted by their mandate to provide market liquidity and funding for affordable housing, but also driven by a fresh opportunity for profit, both firms are expanding in the multifamily market to fill a vacuum left by private lenders.
"It's a good time in our business," says Thomas Toomey, president and chief executive of UDR Inc., a Denver-based multifamily real-estate investment trust. "We have access to capital."
UDR recently benefited from that capital availability in its $1.71 billion sale of 25,684 apartments -- nearly 40% of its portfolio -- to a joint venture of DRA Advisors LLC and Steven D. Bell & Co. Fannie provided the vast bulk of financing, reflecting its new aggressiveness in the sector. Mr. Toomey says six months ago the deal would have been impossible because of the dearth of financing...more