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Goldman Sachs, US Bank, Franklin BSP executives anticipate more stress and higher debt costs.
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.
-80x80.jpg "Cain strikes deal to acquire $1.2bn New York-area loan portfolio from PacWest")
The sale comes after PacWest sold another substantial portfolio to Kennedy Wilson earlier this month.
The firm compared the leverage and yields on the B-piece with similar metrics for preferred equity or mezzanine debt investments.
Difficult market conditions are causing challenges for US real estate, but Schroders Capital’s Michelle Russell-Dowe and Jeffrey Williams argue alternative lenders are set to benefit as embattled US banks withdraw from lending.
Banks’ withdrawal from the market as loans mature has opened a lending gap for private debt managers to fill.
Debt funds and alternative lenders step into the space left by banks, Real Estate Capital USA data shows.
Greystone arranged the financing package for 1057 Atlantic Avenue.
The financing funds the first phase of Sterling Bay and Harrison Street’s collaborative $650m project.