Real estate investment trust Annaly Capital Management Inc. has formed a subsidiary that plans to provide warehouse financing and other origination services starting in the first quarter of next year.
Bruce Watterson, who was most recently managing director at Lender Processing Services' LPS Capital Markets, will lead the new subsidiary, according to Annaly.
Annaly executives realistically noted at the recent NAREIT meeting that origination prospects are limited in the current market. But the contraction in providers on the production side of the business has created what the company sees as an opportunity to step in at a time when loan quality is good and competitors are relatively scarce.
"There's an opportunity there," managing director Jay Diamond told this publication, noting that the company sees small- to medium-sized originators as particularly underserved. The company said it is looking for ones with strong track records as well as good loan quality.
"Those are the kinds of relationships you want for when things get better," he said.
Diamond said the unit would start by handling agency-eligible product, a market considered "still relatively robust."
