Government Sponsored Organizations

Published: Jan 22, 2015
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What role are government-sponsored organizations playing in the real estate market today, and does that represent more of the same or a change in what’s been going on? Tom Fink stresses that government-sponsored agencies are still very important factors in today’s real estate marketplace, and the multifamily market, Freddie Mac and Fannie Mae, are still the primary source of capital. “We continue to see a lot more of private capital from insurance companies, equity funds trying to buy and invest in the multifamily space,” he says, “but they still provide a huge chunk of the capital.”

Government-sponsored organizations still continue to issue a lot of securities. In fact, government-sponsored entity multifamily securities are now a new asset class in the Barclays performance indices, which are used to track the fixed income market. So, they are around to stay for a while.

Transcript

EISNERAMPER:It's my pleasure today to introduce Tom Fink, Senior Vice President and Managing Director of Trepp LLC. Trepp was founded in 1979 and is the leading provider of information analytics and technology to the commercial mortgage backed securities, commercial real estate and banking markets. Welcome. What role are the government sponsored organizations, the Freddies and the Fannies of the world, playing in the market today, and how does that represent... Does that represent more of the same, or a change from what's been going on?
Tom Fink: I think the government's sponsored agencies are still very important factors in the marketplace today. In the multifamily market, Freddie Mac and Fannie Mae are still the primary source of capital.

We continue to see a lot more private capital from insurance companies, equity funds trying to buy and invest in the multifamily space, but they still provide a huge chunk of the capital. I think the purpose and the program at the federal level is to ratchet back and dial back some of that activity, but they continue to be a major source of capital in the multifamily space. They still continue to issue a lot of securities and in fact government sponsored entity, multifamily securities are now a new asset class and the Barclays performance indices which are used to track the fixed income market, but they're around for the stay for a while.
EISNERAMPER: Tom, thank you very much for your insights and thought leadership.
Tom Fink: Aaron, it was my pleasure. I always liked working with you and the folks at EisnerAmper.
EISNERAMPER: Thank you. For more information go to EisnerAmper.com