Multifamily Mavens: Wells Fargo’s Vanessa Rodriguez and Peter Cannava Talk Shop

As 2024 drew to a close, many professionals were busy tying ribbons on deals and assessing their upcoming pipelines before the calendar page turned to 2025. 

Wells Fargo (WFC) was no different. 

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Despite market volatility, the firm’s multifamily and affordable housing businesses tore through 2024 — a year that Vanessa Rodriguez, head of community lending and investment (CLI), characterized as “dynamic” when she chatted with Commercial Observer in mid-November. 

“The reason I love real estate is its cycles,” Rodriguez said. “We’ve been in a dynamic period in which we’ve needed to be nimble in our strategy and responsive to challenges at both the portfolio level and the deal level. We’ve had to be innovative, and on our front foot, for our clients.” 

Interest rate uncertainty was a lingering black cloud over much of the industry last year, and while affordable housing — Rodriguez’s purview — hasn’t been immune to rate anxiety by any means, it’s been more sheltered than other parts of the industry. For that reason, deal activity has continued, and her team has been able to focus on doing what they do best, from ground-up construction to rehab transactions to resyndications. 

“I always tell my team to count their blessings that they’re in this space,” Rodriguez said. “Higher operating expenditures and development costs, and softening in LIHTC [Low-Income Housing Tax Credit] pricing are ongoing issues that the industry faced in 2024, and they put pressure on our developers in terms of capitalizing deals. But it was an opportunity for us to deploy our various capabilities in the space and show the power of Wells’ platform.” 

With capital hopping on and off the sidelines at various points throughout the year, 2024 called for some ingenuity as well as creativity. Wells  Fargo leaned into the multiple levers it can pull to get a deal over the finish line — levers that will likely prove necessary again as residual uncertainty trickles into 2025. 

Fortunately for Wells’ affordable housing borrowers, when private capital pulled back at various points in the year, government subsidies were still largely available, with different jurisdictions around the country continuing to deliver programming and dollars. That paired nicely with Wells’ appetite for LIHTC, new market tax credits and historic tax credits, and its myriad solutions on the debt side, from bridge loans to cash-collateralized financing structures. 

A transaction highlight came in June, when Wells Fargo provided $256 million as part of a $332 million package to renovate an affordable housing complex in Staten Island. The transaction was Wells’ first under the New York City Housing Authority’s PACT historic tax credit, a program focused on private-
public partnerships to renovate public housing sites. 

Rodriguez’s CLI group provided an $86 million historical tax credit investment, a $55 million construction bridge loan and a $27 million letter of credit in the deal. Then, the Wells Fargo multifamily capital team — led by Peter Cannava — supplied an $88.1 million permanent loan comprising a $79.3 million Freddie Mac-backed piece and an $8.8 million New York City Housing Development Corporation enhancement.

“It was a joint execution with Pete and his team, and is illustrative of … the platform and our ability to execute when things get a bit choppy,” Rodriguez said.

Don’t worry, darling 

Multifamily has long been the darling of commercial real estate, and Cannava described affordable housing as “the darling within the darling” during the same mid-November interview. Still, his realm, leading capital for the, well, mama darling, wasn’t without its struggles in 2024.

“It felt a little bit like a tale of two cities,” he said, recalling the fervid fire of excitement back in January 2024 when the talk of all of the industry conferences was — what people thought would be — a more accommodative interest rate environment, with some hopeful souls even predicting seven cuts, bless their hearts. 

“There was a lot of positive momentum, then the air quickly got sucked out of the room when the 10-year Treasury went north of 5 percent. With that went all the volume,” he said. “We were extremely busy, quoting transactions, submitting deals to the agencies, the agencies were doing their job in providing quotes and providing liquidity in the marketplace — but nobody was executing deals. When I look at the first five months of 2024, our volumes were down tremendously, and we weren’t alone in that, it was across the street. Then, all of a sudden, a light went on.” 

The illumination came toward the end of May. Clients were more willing to transact, and deals started closing. 

“I think there were a lot of reasons for that,” Cannava said. “Obviously, rates started to move lower, and the bid/ask spread between buyers and sellers on appropriate cap rates started to be determined. We had a gangbusters June, July, August, September and October. We executed just under $2 billion with the agencies in the month of October alone, and we haven’t seen volume like that, frankly, since pre-COVID.”

The uptick in volume still came with a side of volatility, and new uncertainty in the marketplace following the November election. 

“We saw the 10-year Treasury move tremendously higher shortly after the election results, but most economists that I’m listening to are talking about more inflation,” Cannava said. “Who knows what’s in store as we move into 2025? But, personally, I think we’re going to still see a lot of volatility, a lot of headwinds and a lot of the challenges that Vanessa talked about.”

The good news for affordable housing in 2025 lies in the demand equation. 

“We’re short about 4 million affordable homes in this country, give or take, depending upon which study you look at,” Cannava said. “Because of that, I think regardless of what side of the aisle that’s being talked about, our businesses will continue to flourish, and we’ll be able to continue to finance important affordable housing in 2025.” 

A well-dressed man

It takes a village to accomplish the aforementioned feat, especially at times of market dislocation, but thankfully Rodriguez and Cannava have a partnership and friendship that goes back 15 years. 

“Pete was the best-dressed person in the room,” Rodriguez said of their first meeting. “He’s always dressed to impress.” 

Cannava was an investment banker at the time, and claims not to remember what he was wearing that particular day. 

“A sharp suit and pocket square,” Rodriguez interjects and laughs. 

Cannava started his career financing affordable housing — both single-family and multifamily — on the investment banking side. He sat in Bank of America Merrill Lynch’s municipal finance group for almost 10 years before joining Wells Fargo in 2009. His vision at the time was to create an affordable housing platform that transcended more than just the bank’s municipal finance group, but instead partnered with Wells’ CLI and multifamily capital group. 

“I saw a real need for people to think creatively about the problems we were dealing with in this space,” he said.

Rodriguez got her finance start in San Francisco after attending the University of California at Berkeley. She spent a decade in New York following the Global Financial Crisis, which is when she met Cannava. Cannava had attended New York University, where he got his bachelor’s degree in finance. While Rodriguez is one of five, Cannava has one brother. “I was also the best dressed one growing up,” he said and laughed. 

When they met, Rodriguez was financing some of the biggest affordable housing developers in New York. Cannava brought up the concept of taking tax-exempt bonds, putting them on Wells’ balance sheet, and financing them in a more capital-optimized and more profitable way. That would lower the cost of funding to the bank’s borrowers while also mitigating a lot of risk via public market transactions. 

“Those conversations morphed into a business, and were the foundation not only of the building of our relationship, but also the fact we’re now uniquely situated more than any other bank, with all of our affordable housing practices sitting in one business vertical in the corporate investment bank,” Cannava said. 

Rodriguez and Cannava report into Kara McShane, Wells Fargo’s global head of real estate, and have agency lending, construction lending, debt, equity, and new market tax credits all within their universe.

“Our teams have worked together for lots of years, and there’s a lot of deep expertise in our teams,” Rodriguez said. “We roll up through Kara, we’ve got all the tools under us, and it really promotes collaboration. It aligns incentives, it allows us to best serve our clients. And we foster strong partnerships.” 

Nine lives 

The year 2009 was an interesting time for the two to begin their partnership, with the world largely figuring out which way was up following the GFC. At the time, Wells’ banking competitors were foundering and there was stress in plenty of portfolios, but it was also the beginning of a new cycle of real estate — and for Wells Fargo, which the year before had acquired Wachovia. 

As such, it was a great time for Rodriguez and Cannava to put their stamp on the affordable housing and mixed-income space in New York City with a blank canvas before them. 

“I think that the reason it worked really well with our teams coming together is we take a team approach to everything. It’s a very inclusive environment and very collaborative, and I think clients see that,” Cannava said. “The client always comes first, and always sees the team coming together to try to drive a solution. We’re product agnostic, and I don’t care if you know you need to use my business for this or Vanessa’s business for that. At the end of the day, we want to get to the right solution for the client.” 

Cannava remembers an example of this approach in 2023. 

At the time, banks were still grappling with Basel III changes in the regulatory environment. An important client of Wells’ was doing a deal in Manhattan’s Inwood, and looking for a five-year forward — a challenging, interest-rate-focused product to execute in the marketplace. 

“We came up with a structure that allowed us to use our balance sheet for the construction debt as a drawdown bond, and then we committed to a perm loan at the construction loan’s closing — a 15-year perm with a five-year forward, so a 20-year maturity,” Cannava said. “We also got Fannie Mae to provide enhancement to us at closing that would come in at conversion. 

“In order to do this structure, Vanessa’s team couldn’t be the LIHTC investor because of an esoteric rule in the tax law, so we actually partnered with another bank that had a relationship with this client, and brought them in as the equity,” Cannava added. “It was a great execution, and the project is being constructed as we speak. It was a unique project, too, because it was a 50-50 market-rate and affordable project.” 

“The deal took a number of turns initially but ultimately it ended up where it needed to be. It was an example of us sitting down with our partners, the muni finance group, my equity team, my debt team, our agency team and asking: ‘What’s the best execution for the client?’ and saying, ‘OK, we’re going to stand down here, partner there, and bring this in here.’ It was interesting to watch that deal get structured,  because where we started isn’t where we ended, but where we ended was the right place,” Rodriguez said.

Despite much of the industry being aflame the past five years, the focus on preserving and creating affordable housing thankfully hasn’t waned, Rodriguez said. 

“Frankly, what I’ve seen is more institutional players coming into the market and buying up portfolios,” she said. “I’ve seen more firms raising impact funds focused on affordable housing, preservation, sustainability and climate solutions. Affordable housing is in crisis. Any city you go to in America has a version of the challenge, and it’s big. When times get rough, you could see capital move away, but I just didn’t see that at all.” 

Instead, Rodriguez has witnessed multiple forces rowing in the same direction, with stakeholders trying to be innovative with new programs and funding, and participating on boards, in conferences and in think tanks. 

“Then, you see things like the Greenhouse Gas Reduction Fund, $20 billion of capital that has been awarded, much of which to some of our clients,” Rodriguez said of the federal program. “Many of our clients are part of the larger ecosystem that will deliver these funds, benefit from these funds, and try to deploy these funds. Examples like that are reassuring, frankly.” 

Affordable housing was a key issue debated in the run-up to the presidential election, too, but only time will tell what changes in policy will be implemented under President Trump. 

“I think that regardless of what side of the [political] aisle you are on, affordable housing is going to be something that we have to tackle now,” Cannava said. “The ongoing debate is how to tackle it.

“The tool that has been utilized the most, and it’s really probably the best public-
private partnership that has ever been created, is the private activity bond, which came out of the 1986 Tax Reform Act,” Cannava said. “It’s what’s driven LIHTC investment, tax-exempt financing and private developers working with government agencies to finance affordable housing. But it’s a limited tool.”

Private activity bonds are allocated state by state, based on population, and the maximum amount of tax-exempt bonds a state can issue each year is capped. The federal government could increase that cap, or reduce the 50 percent test — which requires that at least 50 percent of a rental property’s financing come from tax-exempt bonds — but “that’s not necessarily a panacea,” Cannava said. “All you’re doing is creating more tax credits to be sold, and there’s only a limited tax credit investor base. So, you’re basically going to just drive down pricing, and then who knows what happens with the corporate tax rate?” 

There have also been discussions in the past about not just increasing “capital A affordable” — housing made affordable through subsidies provided by the government or another organization — tax credits, but also a middle-
income-type tax credit.

“With this election and everything changing in real time, it remains to be seen if one of these [ideas] gets put forward, pushed forward, picked back up,” Rodriguez said. “But I do agree with Pete — you’ve got to address the supply and the demand sides, and there has to be discussions around the corporate tax rate changes and just putting more supply in the market.” 

Housing honey 

More generally speaking, multifamily remains the apple of many investors’ eyes today, and that trend shows no sign of abating. 

“If you listen to all the major CEOs and CFOs at various banks, multifamily is not a place where people have been pulling back,” Cannava said. “If anything, people are looking to try to find ways to add and grow their portfolios. It’s been challenging, because there’s not been much built. The number of new multifamily properties under construction is far less than it was in 2019, 2020 and 2021. There’s undersupply and the need to build more. The banks are going to be a big part of that solution.” 

For Wells Fargo, multifamily has always made up a very large percentage of its book, and Cannava sees that trend continuing.  

“Developers are positioning themselves to bring product online in 2026 and 2027 because there’s going to be a demand, and not many units online,” Cannava said. 

The two big two elephants in the room — currently plodding in circles— are interest rates and the regulatory environment. 

“It’s no secret that Basel III Endgame [which increases capital requirements on major banking institutions in the U.S, resulting in less credit availability and higher financing costs] in its original form was very punitive for banks to lend construction dollars — and we saw what happened to some of the regional banks in 2024,” Cannava said. “So, regulatory reform that makes it easier for banks to lend construction dollars will only help some of the issues that we’re talking about.” 

For now, there’s still plenty of work to do. 

 Last month, in New York, Rodriguez’s CLI team closed a $24.9 million letter of credit for 1760 Third Avenue. The deal partially finances the repositioning of a 513-unit former college dormitory on Manhattan’s Upper East Side into a 434-unit affordable building with 260 units set aside for formerly homeless individuals. A vital step forward in helping to address some of New York City’s homelessness crisis,  the city and state also provided $200 million in subsidy towards the trasaction.

Elsewhere, the team is celebrating other successes, including some with historically Black colleges and universities (HBCUs). 

“It’s been a sector that we’ve spent time on, and we’ve built a bit of a practice around it with different segments of Wells,” Rodriguez said. “We worked with one of the largest HBCUs to deliver a health care building on one of the campuses, to deliver services to [those] medically underserved, and also education opportunities in nursing. We’re in a time where we need this more than ever, especially in low- to moderate-
income communities.”

Wells has also provided grant funding to strengthen housing access and affordability in native communities across Arizona, Montana, New Mexico, the Dakotas and Wyoming.

Then, in Birmingham, Ala., it helped to deliver educational opportunities for both skilled trade careers and eventual homeownership. BuildUP Community School in Birmingham was one of six organizations to receive a grant of up to $3 million to expand programs aimed at making homeownership more accessible.

“This is a space where we can reach different pieces of the financial system and the ecosystem beyond affordable housing. It’s work that we’re really proud of,” Rodriguez said. 

Year in review 

The past year has put even the most unflappable financiers through their paces and laid bare weak spots, but it’s also underscored teams’ strengths. 

“This might sound a little cheesy, but I mean it, because it was really a challenging year,” Cannava said. “The proudest thing for me this past year was my team, and how dedicated they were to navigating such rocky waters and working together and collaborating. It’s not been easy.” 

And as the Wells teams get deeper into 2025, they’re leaning into what they do best again, and keeping the goal in clear sight. 

“I’m a pretty glass-half-full individual,” Rodriguez said. “I’ve got an 8-year-old and a 6-year-old, so I have to be positive. I feel that affordable housing touches too many communities, no matter what community you live in. You can live in a rich suburb, or you can live in a very blighted community in an inner city. We all see affordable housing impact this in different ways, whether we want our kids to be able to afford to buy homes in the neighborhoods that we live in now, or whether it’s dealing with the immigration issue in inner cities. It’s touching everybody, and I think that everybody realizes something needs to be done.” 

Cathy Cunningham can be reached at ccunningham@commercialobserver.com.