Commercial Real Estate

5 Questions with Berkadia’s New Managing Director

Nathan Stone has joined Berkadia with a focus in multifamily, senior housing, and hospitality.

Nathan Stone

Berkadia, the joint venture of Berkshire Hathaway and Leucadia National, has a new managing director. Nathan Stone has been working in the debt space since 2003 at companies such as Seneca Investments and NorthMarq Capital. As of November, Stone, and two former NorthMarq colleagues—Brad Mason and Guy Griffith—joined Berkadia with a focus in multifamily, senior housing, and hospitality.

Why is Berkadia the right fit for you?

Berkadia is very dynamic, especially with regard to Freddie Mac and Fannie Mae. The technology—with being run by Berkshire Hathaway—and the investment in technology is appealing. There’s an understanding that to service clients property, the better we can be from tech standpoint, the better service we can provide. The internal structure of company, from a support standpoint, allows me to do what I do best, which is find business and service clients. Production has really good underwriting support. [Berkadia is] well-staffed and well-run.

How are you feeling about the multifamily lending market right now?

It’s still really strong. It has favorable rates. Values are still improving. We have a lot of new folks moving to town and a lot of those new people want to rent versus buy. I still see value-add properties available. There are always going to be properties financed with a permanent mortgage and had prepayment penalties, and now they’re coming to the end of their mortgage term. There’s a lot of competition for properties that fit that mold, though there are not as many opportunities as there were two, three, four years ago.

What about the hospitality lending market?

RevPAR (revenue per available room) and ADR (average daily rate) is at or near all-time highs, and that’s closely related to the economy. There was a lack of development through downturn, and some markets are playing catch up. The lending community is still reluctant to go all in on hospitality, so it continues to be lower leveraged business and underwriting standards are more stringent. But money is out there and the economics are good for new construction.

And senior housing?

The demographics are undeniable. Demographics show [senior housing] is needed, but sometimes there’s an education component that folks need to understand. There are a lot of options out there—age-restricted apartments, independent living, assisted living, memory care. I focus more on age-restricted apartments because I think that’s more similar to traditional apartments. When you get into property types that require licensure, it more of an operating business.

What keeps you up at night?

Interest rates. If they increase too much, it would be bad for commercial real estate finance. I’m OK with interest rates increasing, but I hope it’s moderate increases—not spikes. Rising long-term interest rates keep me up.