High inflation, epic rise in interest rates, declining valuations, looming regulatory changes and a great divide between buyers and sellers—this cocktail of factors has created an unfavorable environment for multifamily transactions in 2023. And Stephanie Wiggins, managing director & head of production for agency lending at PGIM Real Estate, believes there’s not enough daylight left in the year to make up for the loss in volume that the industry has experienced, despite recent improvements in Treasury yields.
“We’ve had bad times before, but I can’t recall a time where there is just this absolute dearth, lack of transactions,” Wiggins said during the November episode of the Mission Success: Women in Multifamily podcast series. “I would say that this kind of pipeline fallout, especially if you look at the FHA numbers, is unprecedented,” she noted.
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Today, Wiggins leads loan originations for Fannie Mae, Freddie Mac, affordable and FHA multifamily loans, but she came into the multifamily business in 1988, so she has been through multiple downturns over the years. However, she admits that there’s never been so much volatility, and lack of predictability and stability. This hasn’t made her less optimistic, though. She believes that in 2024 the bid-ask spread between buyers and seller will mitigate as they become more realistic about valuations. She feels that experienced borrowers will change their mindset and adjust their expectations about interest rates.
“If all those things come together, 2024 should be better,” she said.
In the second part of her conversation with Multi-Housing News Senior Editor Laura Calugar, Wiggins also talks about how she followed in her family’s footsteps and chose a career in CRE originations. Despite the competitive environment that is specific to this industry, she had lots of Black and female role models who have showed her that working in multifamily originations can be fun and dynamic.
Tune in now to find out the secret ingredients of her long-term success!
Here’s a snip of what you’ll hear about once you hit the Play button:
- PGIM Real Estate’s activity in 2023 (1:15)
- How high interest rates and inflation have impacted agency lending in terms of volume (4:12)
- Is affordable housing still a priority? How are state and local officials addressing affordability? (8:12)
- Creative ways to structure a loan today (11:50)
- The Fed’s next move (13:05)
- What does the multifamily lending market need for a good start of the new year (14:49)
- What’s it like for Wiggins to work in multifamily originations (16:45)
- The secret of her success and long-term career in the industry (20:02)
- Diversifying the ranks of CRE originators (20:49)
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