Umpqua Bank shuts multifamily lending operation on West Coast

Bank had $7.1B in construction, multifamily loans on Q1 books

Umpqua Bank CEO Clint Stein

Umpqua Bank CEO Clint Stein (Columbia Bank, Getty)

UPDATED JUNE 29 at 2:40 p.m.:

Umpqua Bank is scaling back on multifamily lending on the West Coast, The Real Deal has learned. 

The Lake Oswego, Oregon-based bank is shutting down its multifamily division, a spokesperson told TRD. An email from an employee detailing the firm’s plans was sent to some clients on Wednesday morning, saying the bank “will be winding down” multifamily loan production.

“We will continue to lend on the multifamily asset class to relationship-based borrowers — typically those with depository, treasury management and other services at the bank,” a spokesperson for Umpqua Bank said in an email.

“Current loans with our multifamily division will continue to be serviced by the bank,” the spokesperson added.

At the end of the first quarter, Umpqua Bank had about $5.6 billion in loans secured by multifamily properties on its books and a further $1.5 billion in real estate construction loans, according to an earnings release. In total, multifamily loans made up 15 percent of Umpqua’s portfolio. 

Umpqua had increased its exposure to multifamily lending from 2021 to 2022, according to financial reports. 

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The bank upped its multifamily loan book to $4.8 billion in the second quarter of 2022 — a 34 percent increase from the same period in 2021, according to earnings announcements. Its total real estate loan book increased 17 percent to $11 billion.

“We had a really strong second quarter in multifamily,” Umpqua President Tory Nixon said during an earnings call last year. “Some of that is just a result of borrowers getting financing done and in place before this continued rise in interest rates.”

In March, the bank merged with Columbia Banking System, bringing its total assets under management to $50 billion. 

In Los Angeles, Umpqua has done between 150 and 200 multifamily loans since June 2022, after interest rates started to rise, according to an Umpqua spokesperson.

The step back from apartment lending follows the collapse of First Republic, which has left a hole in the multifamily space. 

Umpqua Bank is also known for offering construction loans with a mini-perm loan at maturity — a short-term loan with typically longer terms than bridge financing. 

Clarification: This story has been updated to include a statement from an Umpqua Bank spokesperson and corrected to state Umpqua has issued multifamily loans since June 2022.

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