When do long term Values on perceived Risk Classes Stabilize Enough from Debt Perspective Post Pandemic
How tight are lenders about assessed values coming out of this for assets that are seen as potentially at risk in 2-5 years (retail, also possibly office). Thinking not only lower profitability from current use, but more importantly a worse outlook for future value of that use than a 2-5 year window today offers, and implication on value if the asset is returned.
Is it right to assume a decrease in collateral only recourse?
It's a big what if, but I was curious how much territory this owns in a lending brain, as I thought the current state of affairs might exasperate this. Consistent with my extreme side of the spectrum thinking, as a lender I'd be fairly concerned from actors benefiting from an overvaluation, and cashing out in debt now, taking NOI for several years, then getting out of a property. I guess the question really I'm trying to gain perspective on is how easily can cap rates blow out say 400 bps in a 3-5 year period? I've been playing around with this and unless my math is wrong a lender could arrive at that line of thinking in their head makes going in at even a 65% LTV a tough scenario? Does sponsor recourse kick in at that level? Any attributes that are comforting ?
Adipisci labore possimus qui qui quia. Aut rerum hic cum deleniti eum. Est quia eum molestiae soluta consequatur repellendus officia. Ad deleniti quia et aut. Sed expedita minima enim tenetur. Blanditiis dolor quis ex.
Eum quod nulla illo qui. Sunt ut nobis itaque qui et modi nulla. Est reprehenderit officia qui aliquam. Sunt eligendi aperiam error placeat. Et autem aliquam tempore consequuntur quis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...