Commercial real estate brokerage firm Marcus & Millichap’s financing subsidiary, Marcus & Millichap Capital Corporation (MMCC), has entered into a strategic alliance with M&T Realty Capital Corporation. The strategic alliance will enable MMCC to provide clients with increased access to M&T Realty Capital’s affordable and conventional multifamily agency financing through a streamlined process with dedicated resources. M&T Realty Capital is a Fannie Mae DUS lender and an approved Freddie Mac multifamily lender for Freddie Mac’s Conventional and Targeted Affordable Housing loans. MMCC closed $2.73 billion of multifamily financing in the first half of 2021 and with this alliance will become M&T Realty Capital’s largest origination partner by loan volume.
As part of MMCC’s ongoing expansion, the alliance includes a preferred stock investment in M&T Realty Capital and the ability for MMCC to indemnify M&T Realty Capital for 50% of the credit risk losses for certain loans originated by MMCC through M&T Realty Capital’s Fannie Mae DUS platform. The strategic alliance will enable MMCC originators to access M&T Realty Capital’s streamlined underwriting and efficient transaction execution in this critical capital markets segment. Under the agreement, MMCC originators will continue to have the ability to clear the market on behalf of each client. Additionally, they will have access to M&T Realty Capital’s dedicated tools, resources and expansive lending capacity, which are expected to significantly grow agency market share for MMCC’s sourcing business and M&T Realty Capital’s loan origination business.
In January 2021, MMCC named Evan Denner as executive vice president and head of business. Denner was instrumental in co-designing the partnership with Michael Berman, president and CEO of M&T Realty Capital, along with Beekman Advisors, which advised MMCC on the alliance, the company said. To further build MMCC’s ability to expand its clients’ access to agency financing, Paul Lewis, who spent nearly 20 years at Fannie Mae, joined in January. Lewis is a senior vice president and director of agency programs.
“MMCC is well-positioned to work seamlessly with M&T Realty Capital to expand agency financing for our multifamily clients with better tools and resources for our originators. Marcus & Millichap is the leader in multifamily brokerage and will better integrate agency financing with our client value proposition,” said Hessam Nadji, president and CEO of Marcus & Millichap. “The investment in this strategic alliance and willingness to indemnify M&T RCC for credit risk losses is driven by the agencies’ historically strong multifamily loan performance and very low losses, coupled with significant upside in growing our internal financing capture rate and M&T’s unique ability to enhance our client services.”
Lewis and M&T Realty Capital’s Mark Gould will co-manage the venture.
