Washington Mutual has been one of the most prolific lenders to the multifamily industry, originating at least $9 billion in debt annually for the last three years.
The company lent $9.2 billion in 2006, $10.7 billion in 2007, and around $9 billion in 2008 to the multifamily industry. What makes those numbers even more impressive is that the company specialized in small-balance loans as low as $500,000.
So when Washington Mutual was acquired by JPMorgan Chase last fall in a marriage arranged by the federal government, questions arose about the long-term prospects of its multifamily division. But the newly formed Chase Commercial Term Lending division wants borrowers to know that it’s open for business.
The division is headed by Al Brooks, who was the chief lending officer for Washington Mutual’s Commercial Group.
“From the beginning, Chase executives told us that they like our business and want to integrate it into the combined company,” says Brooks. “If anything, the Chase acquisition of Washington Mutual has strengthened our Commercial Term Lending division.”
The combined company has 5,000 branches in 23 states, and the acquisition gives Brooks a foothold in markets where Washington Mutual had hoped to increase its presence. While Washington Mutual dominated many West Coast markets like Los Angeles, Portland, and Seattle, it was less effective in New York and Chicago.
“Luckily for us, Chase is huge in New York and Chicago,” says Brooks. “We have bankers on the ground there with the expertise we need to make greater inroads in those markets. This is a big change for the better.”
Chase Commercial Term Lending will pick up where Washington Mutual left off, emphasizing smaller-balance loans that don’t contain legal fees or appraisal fees, a big consideration for borrowers with multiple transactions. The company also touts its deal cycle speed as a competitive advantage. “We can fund loans in fewer than 30 days, versus the industry standard of 60 days,” says Brooks.
In addition to its on-book lending efforts, Washington Mutual was a Fannie Mae and Freddie Mac lender and will continue to offer those agency executions as Chase Commercial Term Lending.
While the company may not reach $9 billion in loans again this year, citing a drop-off in demand, Chase Commercial Term Lending hopes to build on Washington Mutual’s historic success in the multifamily industry. And unlike many of its competitors, JPMorgan Chase’s balance sheet is still healthy, and the company is still profitable: Last month, the company reported net income of $5.6 billion in 2008.
“We are open for business, and we are using our balance sheet,” says Brooks.