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It is critical for private real estate equity investors to keep a close eye on what is occurring in the debt capital markets to best understand pricing nowadays, writes Justin Curlow, global head of research & strategy, AXA Investment Managers – Real Assets.
Since March, consultancy CBRE has monitored a set of lender sentiment metrics to gauge the response in the debt market to the covid-19 crisis. Here, Paul Coates, head of debt and structured finance at CBRE Capital Advisors, discusses the findings.
The specialist UK lender is aiming to provide more than £250m in situations where other lenders are struggling to maintain liquidity.
Syndication is slow and capital value forecasts are bleak, but CMBS transactions remain liquid and real estate is expected to retain relative value.
digital real estate
With commercial properties shuttered and daily life shifted online, data-centric real estate has thus found itself higher on investor wish-lists.
The business school’s end-year 2019 survey results show defaults were on the rise pre-covid-19, but that the market entered the crisis in a nonetheless stable state.
After a lofty point in the investment cycle saw the definition of prime real estate become flexible, investors are now unwilling to tolerate extra risk without additional rewards.
The pandemic will make it difficult to invest capital during the first half of the year but declines in asset pricing are expected to help deal volumes rebound in H2 2020.
Sentiment among Germany’s real estate lenders has plummeted, although those closing transactions are reported to have raised loan margins.
Last month’s real estate debt fire sales at the outset of the covid-19 outbreak in the US were just the tip of the iceberg for private real estate.
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