Samantha Rowan

Commercial real estate debt funds in North America raise $2.97bn in Q1 2023, showing resilience amid shifting market conditions.

Despite a surge in institutional allocations to commercial real estate debt in 2022, the first three months of 2023 saw a sluggish start, with just $800m committed to five funds in North America.

The strategy is growing in the US, but it lacks a real catalyst to drive change.

A key driver of activity in the multifamily sector is support from Fannie Mae and Freddie Mac for stabilized and pre-stabilized assets.

The Starwood-owned portfolio’s appraisal value has risen 35%% since December 2021.

The New York-based agency saw a loss severity of 48.4% in 2022, versus a loss severity of 56% in 2021. 

The sale comes after PacWest sold another substantial portfolio to Kennedy Wilson earlier this month. 

Carlos Slim’s Banco Inbursa funded the senior mortgage.

The firm compared the leverage and yields on the B-piece with similar metrics for preferred equity or mezzanine debt investments.

Alternative lenders are expecting to increase their market share as regional banks pull back.