I feel like whenever there's a major dislocation in a market there's money to be made from the most liquid, well capitalized players.
The commercial real estate market has clearly been oversaturated in the past 10 years.
Where do you make money from operaters with weak balance sheets?
There’s still too much liquidity for anything bad to happen. Everyone and their mother has a debt fund or secondaries fund waiting to pounce on “distress”
I don't think you understand how much of that liquidity has dried up overnight. It doesn't exist anymore.
Yeah I don’t understand because it’s not the case. Lenders are still being very aggressive on rate, pushing down their spread to adjust for the forecasted benchmark rate increases
Depends on what you're looking to pounce on.
Everyone and their mother with a debt fund may not be looking to buy distressed assets in the $25-50mm range.... the same as they weren't willing to look at that deal size 2 years ago.
Anyone trying to pull a fast one on Carlyle or whatever is going to have a bad time. Finding opportunities around the margins and in the slippery nooks that fall outside the mandates of major funds can be lucrative.
You're title is analyst 1 for an investment bank. What Intel do you have on real estate capital markets.
Dude it's a fuckin title on WSO. I work on at a REPE Fund that invests across the capital stack. You must have a shitty deal or something because good deals with strong operators are still getting plenty of bids. We have lost deals because people are going so low on rates / equity splits. We also send a lot of deals to the trash bin but that happens all of the time.
Starwood and blackstone prob just reviewed your shitty deal and thought "here's a good chance to quote L+9 because these guys have no other options". We do this as well
Obvi not working with BX or Starwood if quoting anything over Libor
Yeah we use SOFR but L+ still rolls off the tongue
STFU. I make 4-5x than you.
My brother in Christ, if you were interested in an analyst position at related’s debt fund just a couple years ago, that most certainly is not true lmao
Also analyst at massive debt fund (top 3 player) and we are being beaten by randos on quotes. They're coming in 30-50bps lower than we are. No idea what they are looking at. Maybe they see a better asset, haven't looked at rates, or just are pricing that low and will eat losses in the future.
The comments in this thread went south quickly. Very cringe.
We put out to bid three deals last week. Still getting very aggressive terms. Looks like debt providers are willing to cut their net interest margins to make quality deals happen. Talking with these guys, the debt providers still need to make deals happen to pay bills. In their mind, I guess a small profit is better than waiting for rates to change and make more money. Unfortunately many lenders dont have the luxury of sitting around doing nothing because each day not lending is one where they lose money.
Just like someone else above stated, there is tons of liquidity out there. Its all competing for deals.
Good rule of thumb on this forum is that the longer a thread goes on, the higher the likelihood of the conversation turning to naming big players that everybody and their mother knows and/or a debate over what actually constitutes real estate private equity.
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