Prudential Financial Inc., the second-largest U.S. life insurer, hired Patrick McAllister and Laurie Morfin from Wells Fargo & Co. to bolster the unit making loans for multifamily dwellings.
McAllister will work in San Francisco and Morfin in a new Carlsbad, California, office, according to a statement today from Newark, New Jersey-based Prudential. They will focus on loans that will be bought or backed by U.S. agencies or taxpayer-supported firms such as Fannie Mae and Freddie Mac.
Prudential and New York-based MetLife Inc. are among insurers betting on apartments with near record-low interest rates limiting returns from bonds, and more families turning to rental properties after housing prices slumped. U.S. apartment vacancies fell to 4.7 percent in the second quarter, the lowest rate since the end of 2001, according to Reis Inc.
“The multifamily market has been a strong performer in the current economic climate as people choose to rent, putting off home ownership due to concerns about the job market,” Jim Hensley, a principal and agency production manager for Prudential Mortgage Capital Co., said in the statement. “We believe that will continue to be the case for the next three to five years.”
The Federal Open Market Committee said today it would probably hold the federal funds rate near zero “at least through mid-2015.” The U.S. unemployment rate has exceeded 8 percent since February 2009, the longest stretch in monthly records going back to 1948.
Prudential had $5 billion in apartment and multifamily mortgages as of June 30, about 15 percent of a commercial-mortgage portfolio that also covers office, retail and industrial properties. MetLife Inc., the largest U.S. life insurer, had $4.3 billion, the firm said on its website.
Before joining Prudential, McAllister and Morfin worked as directors and originators for Wells Fargo Multifamily Capital. Mary Eshet, a spokeswoman for Wells Fargo, the largest bank on the U.S. West Coast, had no immediate comment.
McAllister has held senior positions at Cohen Financial and Eastdil. Morfin has worked for Nationwide Insurance and Union Central Life Insurance Co.