Wells Fargo’s Alan Wiener: Massive Multifamly Biz and Unwelcomed Guests
Carl Gaines May 30, 2012, 12:03 p.m.
Alan Wiener called the whole thing “weird.” And for several reasons it was a somewhat unusual scenario—two bus loads of folks from the Bronx 99% Spring, an Occupy Wall Street offshoot, gathered on his lawn Saturday April 14, 2012, a beautiful spring day. The buses had pulled up to the private drive leading to his Rye home as men, women and children took the short walk to Mr. Wiener’s property (click through to the end to read the letter the group left him).
Heidi Hynes, a spokeswoman for the group, told The Mortgage Observer that they chose Mr. Wiener “because he’s in charge of multifamily mortgages and because the Bronx is filled with multifamily housing.” Also, she said, he lives in Rye, which wasn’t far to travel. According to Ms. Hynes, Mr. Wiener is part of the predatory banking system that had over-financed mortgages and then received bailout money from the government, even as programs for poor kids in the Bronx were cut.
Here’s where it gets weird, at least somewhat. Mr. Wiener, as group head of Wells Fargo Mulitfamily Capital and a 2012 Power 100 award winner, is inarguably part of a massive banking system. He’d be the first to tell you that the bank did roughly $6.5 billion of permanent multifamily lending last year, making it the largest such lender in the country.
The bank also sat atop the Mortgage Bankers Association’s list of commercial real estate/multifamily finance firms for 2011 in a vast number of categories, including the broad category of total originations. In the New York tri-state area, tucked among these originations are all the projects one would expect—like the $525 million Wells Fargo provided for Gotham West. It held $150 million.
But the bank also originated a $531 million Freddie Mac loan to refinance Starrett City in 2009, keeping 5,881 housing units affordable for another 30 years. Upcoming this year, in a deal that he anticipates will close by late summer, is an intended $600 million loan to refinance the Bronx’s Co-op City, which would keep its 15,000 units affordable for another 35 years.
Adding to the weirdness factor, Mr. Wiener served for several years in the late ‘70s and early ‘80s as the New York director for the U.S. Department of Housing and Urban Development, during which time the agency insured and funded over 50,000 new and renovated multifamily units.
As part of the Wells Fargo system, Mr. Wiener’s dominion is vast and the result of the bank’s long-standing role as a big commercial real estate lender. “We’re a huge real estate bank,” he told The Mortgage Observer recently in his office. “Our philosophy is who we lend to. If you look at the downturn in ’08, Wells fared fine. And why did it fare fine? Because of who we lend to. We actually like to get paid back.”
Today that means financing deals for the likes of the Gotham Organization, Starwood, Blackstone and the Related Companies—all organizations able to see an upside to building ever-popular multifamily housing in New York City, where the 421-a tax abatement means most rentals go up as 80/20 projects.
Mr. Wiener said that Wells Fargo has a large pipeline of 80/20 program developments going into 2012 and 2013 and that they’re “with the normal guys you’d think we’d do business with.”
The bank truly does do business with all the usual suspects in the New York City area. Being the largest means having the luxury of choice and the ability to be extremely selective. Mr. Wiener and Michael Kaczynski, a senior vice president at the bank whose focus is construction loans, said that they’ll consider new clients but only after a thorough vetting process.
“We’re very selective—top tier,” Mr. Kaczynski explained. “We don’t go too far down market.”
“It’s really about your history,” Mr. Wiener interjected. “If it’s a non-recourse loan and you say, ‘Here are the keys,’ we’re o.k. with that. But if you had a guarantee on a deal and you didn’t honor it, we’re not o.k. with that.”
This rarely happens, said Mr. Wiener, who couldn’t recall a time when the bank had been burned on a deal in the tristate area.
The sheer volume of the bank’s real estate lending activity is a topic that Mr. Wiener revisits again weeks later, over chopped Caesar salad and sort-shell crabs at a Bobby Van’s steakhouse near his office. He explained that it had its advantages.
“One, you’re consistently in the market,” he said. “So even in the down times we were in the market. If you look at some other banks—take a look at JPMorgan. Sometimes they’re in real estate, sometimes they’re not. Consistently, Wells Fargo has always been in real estate, and being in the market and being such a large player in the market gives us the opportunity to actually pick who we want to lend to.”
Like many lenders, relationships and character are a key factor in the decision-making process for Mr. Wiener and his colleagues. In fact, many of the big name developers currently on the bank’s roster of clients followed him to Wachovia when he sold his company, American Property Financing, to the bank in May 2006. APF was focused on financing and loan servicing for the multifamily sector throughout the United States. And in New York it was the top multifamily lender. Mr. Wiener, as founder and chairman, had built it to such a size that its loan portfolio was more than $10 billion. By comparison, at Wells Fargo, the multifamily lending portfolio is at $70 billion.
When Wells Fargo agreed to buy Wachovia for $15.1 billion in 2008, many of Mr. Wiener’s high-end, top tier borrowers once again followed him.
“Wells had never done business with a lot of them,” he said. “I’d been their permanent lender, many of them, for a while. And now Wells is doing a ton of construction lending to them as well.” He said that he brought Two Trees Management Co. to Wells Fargo to do balance sheet lending after doing its permanent lending through Wachovia. The same for Related and Gotham and Glenwood.
This led to financing for projects like Two Tree’s Mercedes House at 555 West 53rd Street, done in conjunction with JPMorgan Chase and the New York State Housing Finance Agency. It also led to upcoming pools of financings—like developer Jeffrey Levine’s the Ohm at 312 11th Avenue in Chelsea—a $120 million hold, out of $191 million.
Mr. Wiener was born in the Bronx, where his father owned a candy store and, later, a liquor store. He graduated from the University of Pennsylvania and got his law degree from Georgetown.
While at HUD in 1977, he helped to organize President Jimmy Carter’s iconic tour of the South Bronx, which drew attention not only to the blight there but also to the issue of urban decay throughout the country. Three years later, in 1980, he received an award from President Carter, in recognition of his public service and work at the agency.
From HUD, he went to financial services firm Integrated Resources, where he worked as a vice president, directing the acquisition and financing of multifamily real estate, including affordable apartment units.
“I did real estate tax syndications—doing both debt and equity on apartments, including affordable,” he said of his time at Integrated Resources. He told The Mortgage Observer that he thinks helping to provide affordable housing is important and that it’s something that he believes in.
Integrated Resources went belly up in 1989 and Mr. Wiener stayed on until 1991 before leaving to found American Property Financing.
At Wells Fargo, it’s clear that he’s managed to carve a core, close-knit group of employees in the midst of a bank whose overall size, as he concedes, makes it “pretty depersonalized.” A name yelled from his corner office, where might be found typing with one finger, yields that person’s presence in rapid fashion. He calls people “kiddo.” “Capiche” is used to check the comprehension of a topic he’s explaining.
He’s affable, yet clearly demanding. “I encourage smart people to work for me—I appreciate it,” he said one afternoon in his office. “My attitude is as follows: The more I get involved in your business, that’s not a good thing for you. I don’t like surprises.”
That no-nonsense attitude coupled with his knowledge of the industry has made him an invaluable resource outside of the bank. He’s on the board of the Phipps Houses Group, a nonprofit affordable housing advocacy group, and has been on the executive board of the Real Estate Board of New York for many years.
REBNY president Steven Spinola, who has known Mr. Wiener for 25-plus years, said he regularly draws on that knowledge. “Alan is the kind of person who, once he meets you, makes every effort to get to know you well and stay in touch and so he just started to get more and more involved in REBNY’s activities and became somebody that I would go to regularly, and continue to go to, for advice and input on issues,” Mr. Spinola said when reached by phone. Asked the nature of that advice—what topics Mr. Wiener was most valuable at doling out advice on—Mr. Spinola cited the nexus of his finance and policy experience.
“Obviously in terms of financial issues—of loans and what it takes for a project to get financing,” Mr. Spinola said. “Throw in his knowledge from his days at HUD—so the information that he’s got stored in that head of his about housing and financing housing—and then you throw in his city days as well as his federal HUD days. He also brings a good political sense to those discussions and to the advice that he gives.”
Those HUD days seem to be particularly useful for advancing affordable housing projects like Co-op City. Mr. Wiener said that he called New York Gov. Andrew Cuomo—a former HUD secretary—and got him to agree for the state to take the first loss position.
“Andrew understood completely, because he used to be HUD secretary and he saw the dynamics of this deal,” Mr. Wiener said. “He agreed that the state would take a first loss—that doesn’t mean they’re putting up cash. But in the event of a loss to HUD, the state and city take the first $70 million. That makes all the difference in the world.”
For the immediate future Mr. Wiener said that he’d stay at the bank. He said that he thinks their business is really well run, that they know what they’re doing and that they’re extremely well respected.
“What I tell the people at Wells is,” he said, “if I’m having fun, if I like what I do, happy to stay.”
- 312 11th Avenue
- 555 West 53rd Street
- Alan Wiener
- American Property Financing
- Andrew Cuomo
- Blackstone Group
- Bronx 99% Spring
- Co-op City
- Freddie Mac
- Glenwood Management Corporation
- Gotham Organization
- Gotham West
- Integrated Resources
- J.P. Morgan Chase
- Jeffrey Levine
- Mercedes House
- Michael Kaczynski
- New York Gov. Andrew Cuomo
- New York State Housing Finance Agency
- Phipps Houses Group
- President Jimmy Carter
- Real Estate Board of New York
- Related Companies
- Starrett City
- Starwood Capital Group
- Steven Spinola
- the Ohm
- Two Trees Management Co.
- U.S. Department of Housing and Urban Development
- University of Pennsylvania
- Wells Fargo Multifamily Capital