The wave is building……
Warehouse lenders underwriting their lines
Bridge lenders inspecting their CLO and balance sheet books
LP’s kicking out GP’s
Agencies avoiding exposure to sponsors with lots of bridge in the portfolio
Things are starting to percolate… is anyone else hearing anything out there?
Once warehouse lines get reeled in it will be interesting to see how much forbearance gets done in debt fund world. Non recourse? Yes but look at the loan agreements- completion guaranties 🤷🏻♂️🤷🏻♂️😳
We’re having to fund big shortfalls to cover carry costs for deals with no liquidity in sight.
If you own office in a gateway market, you’re lucky if you can sell for the amount of your loan balance rn. Capex is no longer accretive. Leasing is non-existent unless you’re class A or trophy.
Developers can’t get deals out of the ground bc you can’t find capital. Financing is 50% LTC. No new loans unless you have minimum deposits with lenders.
We will be ok. Lenders would rather not take the keys. There will be defaults, no doubt. But give it 2-3 years and things will be back on track.
What makes you believe that? Are you guessing the FED is bluffing?
Put some money on it, VNO looking like a whole snack with that >9% yield.
Disclaimer: I am a moron and lose a lot of money buying shitstocks.
Didnt they suspend dividend payouts?
Buckle up... Special servicers may be more than willing to take the keys (same for investors buying CRE notes at a discount) and many lenders may be forced to act by their warehouse lenders.
The Fed may have paused rates after increasing by over 500 bps since Feb-2022 but Quantitative Tightening is ramping up. They are not bluffing about "breaking" inflation. They want to break shit and will. It does not take much for controlled demolition to get out of control.
We will be ok . . . once the market has adjusted to a high rate environment.
The wave is building....
How much are they going to off load per month? What is there total goal to off load bonds? Any good articles?
Sounds like what someone who prob has a major stake in office or value add multi would say.
Office will get slaughtered. It'll be more about when leases are coming due. Majority of the tenants will not renew. As for multi, anyone that bought within the last 3 years at sub 4 cap and couldnt get enough rent growth to juice the top line will be hurting. Multi fundamentals will be fine, but that massive valuation runup is going to hurt quite a few people.
Asset dependent & basis dependent.
I am not saying let's raise a value-add office fund, but a true bi-furcation is happening between Class A and everything else. Values have dropped across the board as they should, but I was surprised to see in some of these smaller secondary and tertiary markets, some of these deals are actually performing ok to quite well. I would have nightmares if I had a looming bridge loan on some class B commodity-based product.
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