Digest this stark statistic: a Collateralized Loan (CLO) portfolio with over 300 loans is showing a weighted average debt service coverage ratio of just 0.63. It is basically a disaster and one that my guest today is shorting – heavily.
Gabe Bernarde is co-founder of Viceroy Research and has written a report called “Slumlord Millionaires”, that covers a well-known bridge lender who has been doing a lot of lending to multifamily sponsors. The report reveals an entire portfolio of multifamily loans that appear to be underwater and that are wrapped up in CLOs.
In theory, CLOs are bullet proof because the lender who owns/manages them can swap out poorly performing loans for better performing ones, protecting the integrity of the entire portfolio. It’s a bit like having a fund with apartment buildings in it where the sponsor can swap out sub-performing assets for others to keep the funds’ finances healthy.
What Gabe's research concludes is that this structure is fine until all the loans in a portfolio, or a substantial majority of them, are bad. Then you have nothing good to replace the bad.
I've been researching CLOs ever since I spoke to James Eng of Old Capital for the podcast a few weeks ago. He reported having brokered $2 billion and told me 90% were underwater. Then I spoke to Dan McNamara at Polpo Capital, who is famous for having successfully shorted malls in 2020 who also thought that some CLOs were in dire straits and ripe for shorting.
Look, there are multiple ways to make money in a real estate downturn.
You can buy discounted assets from sponsors who are forced to sell or buy non-performing loans or REO from banks. You can provide rescue capital or set up a debt fund.
Or you can short the stock of real estate companies you think are overvalued and that is exactly what my guest today, Gabe Bernarde at Viceroy Research, is doing.
Learn what he is doing, how he's doing it, what he sees, why he thinks there is a very significant likelihood that multifamily real estate assets are going to hit rock bottom in the next few months, and discover his angle to making money in this market.
****
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our free newsletter here.
Today’s guest, Jeremy Roll, president of the Roll Investment Group, is a seasoned multi-cycle real estate and alternative asset investor who is a voracious reader and analyst of market conditions, what's going on in the market, what's going on in the broader macroeconomic world, and in the industries that he invests in.
I've known Jeremy for a long time, and what you're going to hear from him today are some insights into just how conservative he is in his investment approach, what he has been doing for the last few years and what he has not been doing, where he sees the market going and where he sees opportunities emerging over the next few years.
Jeremy talks about how the market transitioned around 2016, prompting investors to adopt value-add strategies due to soaring property values. He shares why he chose to step back from value-add deals, preferring stabilized, more conservative investments.
You’ll hear why prudent investors exercise caution particularly towards the tail end of economic cycles and why Jeremy believes this is the most perilous time to engage in higher risk/return strategies like value-add – and why he thinks it’s like an aircraft running short on take-off runway, highlighting the risks when market prices are at their peak, and an economic downturn is on the horizon.
Jeremy discusses the challenges he faced finding opportunities during 2021 and 2022, a period dominated by floating-rate, value-add apartment deals and why his unwavering preference for ten-year fixed-rate debt meant walking away from deals others were piling into as they chased high, short-term returns.
You are going to hear insights about the current state of the market, the importance of positive leverage, and why now is the time to wait for sellers to adjust their price expectations.
If you are like Jeremy and me who prioritize protecting invested capital over chasing high risk, higher returns, you’ll find the conversation today makes a lot of sense. And if you are now facing capital calls on deals you’ve invested in, Jeremy’s insights, though too late for this cycle, will help you prepare to make money in the next cycle – and to be better prepared for its ultimate, inevitable downturn.
****
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our free newsletter here.
My guest today is Brian Pascus, finance reporter at Commercial Observer. Brian wrote a detailed article comparing CMBS (commercial mortgage backed securities) with collateralized loan obligations (CLO) as ways to finance real estate and so I asked him if he would talk about the differences between these two financial instruments, and what has been the impact on them of interest rate increases and other market forces over the last couple of years.
You’re going to learn about the difference between CLO and CMBS, how both are being hit with significant defaults, and that the market for both has pretty much collapsed, creating a liquidity crisis for CRE.
Brian provides a detailed explanation of both types of finance, explaining their structures, risk profiles, and how they differ in the commercial real estate market. He explains the impact that economic factors, particularly the rise in interest rates, have had on the attractiveness and issuance of these securities and how this has led to changes in borrowing costs and influenced the overall dynamics of the commercial real estate market.
This episode is an advanced discussion about real estate finance where you’re going to gain a thorough understanding of the complexities and challenges associated with these financial products, as well as discovering who invests in CMBS and CLOs, including pension funds and high-net-worth individuals.
Plus, you’ll also learn what is the single most important thing in commercial real estate finance that will bring the market back to some semblance of normality.
This is an important episode for anyone tracking opportunities in the market and who wants a deep dive into how we have got to where we are today, and where we are headed in the coming months.
****
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our free newsletter here.
Today’s guest, Lew Feldman, is a prominent figure in real estate crowdfunding and the founder of Heritage CRETech. Lew shares insights from his time in the world of real estate crowdfunding and his role on major advisory boards, discussing its current state, trends, and future prospects.
Lew begins by examining the challenges and adaptations within the real estate crowdfunding industry, especially under the pressure of rising interest rates. He discusses on the performance of leading platforms like Fundrise, RealtyMogul, and CrowdStreet, highlighting how their business models and investor bases have responded to the fluctuating market conditions. This discussion provides a view of the sector's resilience and adaptability in the face of economic shifts.
Our conversation then pivots to the broader real estate market, exploring the impact of increased interest rates and liquidity issues on financing options and Lew discusses the struggles facing sponsors and investors due to these challenging conditions.
A significant portion of our conversation covers governmental interventions in the real estate industry. Lew elaborates on historical and current government programs, emphasizing their role in supporting and stabilizing the market during downturns. Additionally, he touches on the transformation of crowdfunding entities into broker-dealers, bringing more fiduciary responsibility and transparency to the industry.
Venture capital's influence on real estate crowdfunding is another critical topic Lew addresses. He explores how this type of investment shapes the business strategies of crowdfunding platforms. Moreover, he provides predictions for the future of the sector, considering the ongoing economic and regulatory changes.
Lew also discusses sustainable development initiatives and contrasts publicly traded REITs with private real estate markets, highlighting their differences in liquidity, transparency, and market responses.
Concluding with his predictions for the commercial real estate market in 2024, Lew offers a unique and informed perspective on navigating the complexities of today’s market. This podcast is a must-listen for anyone interested in real estate crowdfunding, market analysis, and strategic investment planning in the real estate space.
****
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our free newsletter here.
My guest today is David Moret, founder and president of Highline Real Estate Capital. David brings a wealth of experience and a unique perspective especially in the wake of the Federal Reserve's rate hikes.
His insights are particularly timely as we weave our way through a market that's shifting from its previous exuberance to a phase marked by strategic caution and adaptation.
David discusses the launch of Highline’s Real Estate Fund One, set up as a direct response to the current market dynamics. He talks about the fund's objectives and strategies, emphasizing the need for agility and foresight in today's economic climate, and discusses how the fund is positioning itself to capitalize on market dislocations.
You’ll learn about Highline’s take on the current significant decline in deal flow and transaction volumes and why owners are reluctant to sell at this point in the cycle. David discusses the 'extend and pretend' strategies adopted by banks, a trend that's creating a unique set of challenges and opportunities for investors.
David's approach to sourcing deals is a masterclass in strategic thinking and adaptability. He talks about leveraging a network of brokers, forming strategic partnerships, and using advanced search tools for targeted acquisitions.
In this episode, you'll gain a comprehensive understanding of the current commercial real estate market dynamics. David's expertise offers insights into managing investment portfolios, adapting strategies in a fluctuating economic environment, and the art of identifying and capitalizing on investment opportunities in a market that's constantly evolving. Join us for a deep dive into the world of real estate investment with one of the industry's most astute investors.
****
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our free newsletter here.
Today’s guest Ian Ippolito, a seasoned investor known for his conservative investment strategies, discusses his take on the real estate market's first significant recession since the advent of real estate crowdfunding.
Ian draws parallels between the initial impact of COVID-19 on multifamily properties and the current challenges facing the office sector. He discusses the office market's decline as a direct result of the remote work revolution leaving a surplus of vacant office space and a swatch of struggling deals, and talks about the impact on multifamily of the end of the rent increase era and the ensuing strain on investment models that failed to anticipate the current trends.
You’ll hear about the importance of taking a conservative investment approach and how fixed vs. floating rate debt and leverage levels measured against value (LTV) are used to protect principal as a priority to the lure of exponential but risky returns.
In light of the recent troubles CrowdStreet has had, Ian talks about the critical role of due diligence for investors even (or especially) when investing via a platform. He reflects on the recent incidents of fraud within the industry, stressing the need for investor vigilance and the responsibility platforms bear in maintaining transparency and integrity.
Offering advice to sponsors, Ian encourages a conservative approach, focusing on long-term survival and stability rather than short-term gains. His message is clear: in a market bracing for a potential massive repricing of assets and grappling with the implications of a high-interest rate environment, prudence is key.
****
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our free newsletter here.
My guest today is Dan McNamara, co-founder and chief investment officer at Polpo Capital, who famously and very successfully shorted malls in 2020 and who is now training his sights on the office market.
Dan shares the story of his mall short and how similar strategies are being applied to the office sector. He also talks about the multifamily market's current state, discussing the challenges and potential investment opportunities that he sees in that asset class.
You’ll learn which resources Dan uses to conduct his market analyses, and you’ll hear more about how he and his team underwrite risk, how they use data to do that, and what he’s seeing as the market faces a significant maturity wall of debt.
Dan explains how banks’ common practice these days for ‘extend and pretend’ helps him hedge his investments, and he provides a nuanced view of today’s commercial real estate market dynamics, including the potential for a massive repricing of assets and the implications of a high-interest rate environment on his investment strategies.
In today’s episode of The Real Estate Reality Show, you’re getting a comprehensive understanding of the current commercial real estate market, will learn about the delicate balance required in managing investment portfolios, the timing of short positions, and the strategic maneuvers employed by seasoned investors like Dan to thrive in this challenging economic environment.
****
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our free newsletter here.
Today’s podcast guest is Nate Trunfio, who is chief revenue officer at Lima One Capital, a bridge lender backed and owned by a REIT, MFA Financial.
Nate talks about the kinds of terms Lima One has been and continues to offer borrowers, he describes the trends in bridge lending he's been seeing over the last three years, and he talks about where he sees the market going through the end of 2024.
Nate also discusses the degree of distress the multifamily market today, where the distress is occurring, and he describes the characteristics of sponsors facing the hardest challenges to get out of this high interest rate environment.
Nate brings a wealth of lending experience and a unique perspective on navigating the current market’s complexities, emphasizing the importance of strategic asset management and realistic underwriting.
You’ll learn how lenders like Lima Capital are mitigating risk, how they are identifying opportunities as the market evolves, and you’ll gain a deeper understanding of the intricacies of commercial real estate market lending during this downturn.
**
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our free newsletter here.
Today's podcast guest is Brian Underdahl who is Chief Analytics Officer at Nuvo Capital Partners, a family office backed rescue capital shop with a difference.
Much of the so called 'rescue' capital you see in the market today is preferred equity. Pref equity typically comes into deals charging mid-teen returns, takes a senior position to existing GP/LPs, takes no share of the upside, and keeps the existing ownership in place, subject to performance hurdles.
Nuvo's model is to buy distressed multifamily deals outright at fair market value and then provide the selling entity's existing general partners and limited partners a share of the upside in the new, buying entity.
In today's episode you'll learn how this kind of rescue capital works and what kinds of deals it looks for.
Of particular interest today is that Brian has personally vetted over 500 sponsors nationwide in direct conversations with them, and shares his insights into what makes the good stand out from the bad.
Lastly, a note of thanks to Brian for having contributed (kind of) to my latest book, Capital Calls and RESCUE Capital. Brian and I recorded a Q&A session where he answered my questions about advanced real estate syndication terminology.
It's what I call 'real estate syndication 2.0' and is the language of a downturn.
Brian fields over 25 advanced questions from me and you can get free access to the entire series as a bonus for buying my latest ($7) book, Capital Calls and RESCUE Capital, here: https://learn.gowercrowd.com/rescue/
**
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
My guest today is Alex Nicoll, reporter at Insider, who penned an article earlier this month (September 2023) headlined ‘Real Estate Crowdfunding is a House of Cards.’
How could I resist but to give him a call, as real estate crowdfunding is my lifeblood these days, and ask him more about what he was writing about, what he discovered, and what was the background to the article.
Well, the article was focused on the PeerStreet bankruptcy that emerged over the last few weeks and was not an indictment of the entire online real estate syndication industry and what you are going to learn today from Alex is how he did his research into that bankruptcy, the kind of documents that he looked at, and the people he spoke to.
Alex shares insights into what he discovered and his thoughts about real estate crowdfunding in general and you’ll also learn about the business model of Peerstreet, how they raised venture capital, and how much venture capital they did actually raise to put their business plan together.
It is a mind-boggling number.
We also discuss the various factors that have impacted this particular niche in commercial real estate crowdfunding, which is the single-family home fix and flip market, and the factors that have driven Peerstreet to their unfortunate demise.
It was a pleasure talking with Alex and, although the sounds quality is not the best, I’m sure you’ll find the conversation and his insights of great interest.
**
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
What you are going to hear in my conversation with today’s guest, CRE debt expert James Eng of Old Capital Lending in Texas, is going to make you wonder if we aren’t facing the GFC 2.0 – but this time in commercial real estate, especially multifamily, instead of residential real estate in the post 2007 downturn.
Having done over $2 billion in lending during 2021 and 2022 combined, you will be shocked by the percentage of those loans projected to fall into default without significant new injections of cash, or that could face forced sales, or be foreclosed on by their lenders.
James explains how debt sources shifted from early 2021 in a way that changed lending standards, adjusted loan to value ratios, and competed on pricing that led to, and I’m not sure if he uses the term, but led to a bubble in asset pricing.
Not only that, but you’re also going to learn how these loans get packaged up into tranches that are rated AAA to Bbb, and are then sold off to institutional investors who, in turn and in many cases, then sell them back to retail investors who end up being the final resting place for all risk.
If you’ve not read The Big Short by Michael Lewis, don’t bother. Just listen to my conversation with James today. If you have read it, listening to James is going to get you excited about the possibilities of being ahead of the curve this time around – and for multifamily real estate no less!
If you want to know how to shore up an existing deal or want to discover where to find multifamily deal flow as pricing resets, this podcast will provide you with guidance on where to look and what to look for.
**
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
In today's commercial real estate news update with guest Dave Saxe of Calvera partners, we cover these topics and articles:
1. Interest rate lag and the inevitability of more distress to come
https://www.globest.com/2023/08/29/maybe-secret-distress-is-behind-cre-market-performance/
2. The housing market is frozen
3. Is crowdfunding for CRE dead?
https://newrepublic.com/article/172775/grant-cardone-hustle-culture-real-estate
https://www.propmodo.com/will-crowdfunding-for-commercial-real-estate-ever-catch-on/
Today’s show is with guest Sean Burton, Chief Executive Officer of Cityview, a seasoned institutional private equity professional in multifamily real estate. Sean shares insights gained from over 20 years running Cityview that have spanned the Great Financial Crisis of 2008+ and the lessons he learned successfully navigating that downturn.
I reached out to Sean to ask him to guide me through an article he wrote, ‘Multifamily Reckoning: Repricing Risk Amid Higher Interest Rates’, one of the best written articles I’ve seen on the topic for a while – see link at the bottom of this page.
In our discussion, Sean sheds light on the challenges faced by the industry, especially with the rapid rise in interest rates and the aftermath of the Covid pandemic. His approach, rooted in hands-on experience and strategic vertical integration, offers a fresh perspective on navigating these challenges.
What you'll learn from today's episode is how successful sponsors remain close to the real estate through diligent hands-on management – an observation we are increasingly hearing from sponsors best positioned to capitalize on the distress caused by those, now facing existential challenges, who have simply outsourced this crucial role.
You’ll hear how cap-rate compression in secondary markets reveals how to separate the winners from the losers in multifamily, what are the real multifamily fundamentals, and a discussion about rediscovering Alpha, what it is, and how it will determine the winners who will emerge from the current cycle.
You’ve heard about all the institutional capital sitting on the sidelines. Sean Burton at Cityview is among those with that capital, patiently waiting in the dugout for their turn to play.
Sean's insights, backed by partnerships with giants like Blackstone and Blackrock, provide a roadmap for investors in this ever-evolving market. Prepare to be enlightened by someone who has not only witnessed but also actively shaped the multifamily real estate market's trajectory.
**
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
In today's commercial real estate news update with guest Dave Saxe of Calvera partners, we cover these topics and articles:
https://www.reuters.com/markets/us/fed-registers-gains-powell-may-take-lay-low-approach-2023-08-25/
https://www.investmentnews.com/its-time-to-start-looking-at-private-real-estate-again-241004
https://www.ft.com/content/2d304e88-f99e-4b3f-bc39-0debd937675b
Today’s show is with guest Henry Lorber, distressed real estate debt expert and one of the only people you will likely come across whose experience goes back so far he remembers the REIT downturn of the 1970’s!
I contacted Henry because he was quoted as saying that ‘Crowdfunding for real estate is a disaster waiting to happen’ in a recent Real Deal article (see link at the bottom of the page) and, rising to the bait, I figured such a statement could not go unchallenged.
Apart from our discussion on that topic (Henry’s approach comes from his classic institutional perspective) I discovered that he has deep experience in commercial real estate banking and finance going back even before my time (the early middle ages).
What you’ll learn today is in what ways ‘crowdfunding’, as a term used to describe ‘general solicitation’ or online syndication in general, can lead to misinterpretation of this industry. Plus you’ll also hear insights firsthand from someone who has lived through more real estate downturns than anyone else you likely know.
**
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
Each week I look at three of the top stories dominating the news, this week with my regular guest, Dave Saxe of Calvera Partners and I cover:
1. Increasing talk of the impact of rate hikes on multifamily
https://www.cityview.com/urban-land-multifamily-reckoning-repricing-risk-amid-higher-interest-rates/
2. More consolidation from the world of real estate crowdfunding platforms
https://therealdeal.com/national/2023/08/15/yieldstreet-closes-in-on-deal-for-cadre/
3. Banks increasing their charge offs
https://www.globest.com/2023/08/10/banks-increase-their-cre-loan-charge-offs/
Everything's sellable. In today’s market, it's just a question whether seller expectations are reasonable.
My guest today, Jon Winick, CEO of Clark Street Capital a bank advisory and asset disposition firm specializing in loan sales, both performing and non-performing, explains how elevated interest rates are posing challenges for banks on how their loan portfolios are sold.
As defaults rise and a potential banking crisis looms, a hurdle the industry faces is in balancing appraised values that are backward looking (mandatory for banks per regulations), with today’s reality – especially as buyers are forward looking in both their underwriting and expectations.
Lenders are treading with caution, meticulously analyzing their portfolios while fully aware of the growing cloud over the commercial real estate markets, particularly office and, increasingly, multifamily.
But it's not all about cautionary tales; it's also about opportunities and understanding the market's pulse. In today’s conversation, Jon emphasizes the essence of realism in the loan sales market, especially when outdated appraisals come into play.
Despite these and other frictional hurdles in finding price equilibrium while balancing buyer and seller expectations, opportunities beckon for investors eyeing real estate through discounted loan purchases.
Join us for a comprehensive look at how banks are navigating the rising interest rate environment as their CRE portfolios tank in value, and learn how to identify opportunity through the markets’ current fog of uncertainty.
**
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
Tune in to hear updates and commentary from Adam Gower Ph.D., GowerCrowd, and David Saxe, Calvera Partners, about the major news stories this past week (week ending August 11, 2023) in the commercial real estate industry:
Stories we cover today:
1. Urban doom loop.
2. New deals on offer at 24% IRR's - you've got to be kidding!
3. Even multifamily is facing peril
Articles we refer to:
https://www.realtymogul.com/investment-opportunity/2485683?sfmc_id=20436034
Tune in to hear updates and commentary from Adam Gower Ph.D., GowerCrowd, and David Saxe, Calvera Partners, about the major news stories this past week (week ending August 4, 2023) in the commercial real estate industry:
Stories we cover today:
The real estate market is witnessing a shift where many stakeholders are grappling with the changing dynamics. One of the significant concerns is the valuation of properties. Many banks are hesitant to offload their real estate collateralized non-performing loans (NPL) due to uncertainties in their values. This uncertainty is causing a delay in the stabilization of the bid-ask spread, with some predicting stabilization won’t come much before 2025.
Office spaces are undergoing a transformation and with the rise of hybrid work models, there's a need to rethink the utility of office buildings. Some suggest converting parts of these buildings into residential spaces, while others believe that certain structures might need to be demolished.
Apartments, on the other hand, have seen a surge in supply in some regions. However, the challenge lies in the maturities on bridge loans or apartment debt taken with variable rate loans. Many of these were financed without anticipating significant world changes, leading to potential financial pitfalls. That said, while distressed deals are emerging, they are not (yet) in the volume that one might expect.
Discover the transformation of office spaces, the intricacies of distressed deals, predictions for market stabilization, and the implications of the A/B loan structure in this conversation with workout specialist, Bert Haboucha at Atlas Capital Advisors.
Whether you're an investor, a seasoned professional, or a sponsor, this episode is designed to equip you with the knowledge to make informed decisions. Don't miss out. Tune in now and stay ahead of the curve in the commercial real estate world. Your next big opportunity might just be a click away.
**
In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
Tune in to hear updates and commentary from Adam Gower Ph.D., GowerCrowd, and David Saxe, Calvera Partners, about the major news stories his past week (week ending July 28, 2023) in the commercial real estate industry:
Stories we cover today:
https://commercialobserver.com/2023/07/cre-loan-distress-up-70-of-largest-metro-areas-in-june/
https://fortune.com/2023/07/24/housing-market-robert-shiller-home-price-prediction-outlook/
"It's not the most upbeat environment right now even though there is a lot of capital out there."
As a consequence of ongoing real estate distress and related tightening of capital markets, many sponsors are facing refinancing hurdles, especially if their initial plans lacked sufficient reserves to weather economic storms. Alarmingly, by the end of 2025, we're looking at a maturing commercial mortgage debt of approximately $1.3 trillion. From 2025 to 2027, another almost $1.2 trillion is on the horizon, with half being multifamily.
But there's hope. Focusing on projects with solid foundations can offer a buffer against these market shifts which means banking solely on rent growth and other uncontrollable factors is a gamble.
My guest today on The Real Estate Reality Show is Scott Larson, Managing Principal at Pangea Mortgage Capital. Scott sheds light on the broader economic landscape and capital movements. He is optimistic, emphasizing that while challenges are real, dedicated stakeholders can carve out paths to success.
There will be distress and sell-offs in multifamily presenting opportunities to investors, but Scott does not anticipate not a catastrophic drop in values.
In this sea of challenges, the silver lining is the vast capital reservoir available – but while it remains standing on the sidelines distress property values will continue to decline. Hear more from seasoned professional lender, Scott Larson in this episode of The Real Estate Reality Show.
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In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
Tune in to hear updates and commentary from Adam Gower Ph.D., GowerCrowd, and David Saxe, Calvera Partners, about the major news stories his past week (week ending July 21, 2023) in the commercial real estate industry:
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In this brand new podcast series at GowerCrowd, The Real Estate Reality Show, we take a realistic view of commercial real estate investing, providing pragmatic insights for passive investors who are looking for sponsors they can trust and distressed opportunities they can invest in.
You’ll find no quick fixes or easy money ideas here, no sales pitches, big egos or hype.
You’ll learn how to build your wealth while protecting your capital investing as a limited partner in commercial real estate investments, even and especially during an economic downturn.
Subscribe to our YouTube channel here.
Join me, your host Adam Gower, and Dave Saxe of Calvera Partners as we discuss the week's news for week ending July 14, 2023.
Main highlights are:
The Real Deal Article we refer to is here.