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Higher interest rates continued to stall the US commercial real estate market in 2023, but alternative lenders and their investors are hopeful that opportunity will knock in 2024.
The wave of maturities and refinancings looming over commercial real estate in 2024 poses critical challenges for a market still reeling from last year’s rates and valuations shocks, says Teresa Zien, managing director, capital markets at Invesco Real Estate.
While other firms sought to weather 2023’s turmoil by shoring up their businesses and concentrating on asset management, Bravo Capital is expanding its lending activity, say Aaron Krawitz and Gabi Moshayev.
The commercial real estate market, which has been in a value correction cycle for the past two years due to higher interest rates and cap rates, will see this correction continue until interest rates settle.
Yarbrough said he believes the market is coming closer to bottoming out and this creates strong investment opportunities
The financing is notable given the paucity of capital allocated to the office sector as well as a decline in construction lending over the past year to 18 months.
JPMorgan has originated a $500m senior loan to help build the mixed-use development One Beverly Hills.
CBRE IM and Hillwood will use the funding for Phase 1 of speedway conversion into a 6.6 million-square-foot industrial complex.
The optimism comes as the commercial real estate debt markets gear up for an estimated $930bn of refinancing.
As banks seek to address commercial real estate exposure, alternative lenders are stepping in to acquire or help restructure loans.