For a comprehensive understanding of current market conditions in commercial real estate, Allen Matkins partner William Ahern provides an invaluable perspective. As the moderator for the ‘Financing Deals in an Uncertain Climate’ panel at VEA | Newport Beach Marriott on Sept. 27, 2023, Ahern has been able to observe and analyze what he’s seen as CRE lending slows down.
When it comes to completing financing transactions during this uncertain climate, clients have identified high costs of borrowing as well as caps needing replacement that can be expensive – making it difficult for some apartment owners to stay cash flow positive. This pullback began about a year and a half ago when bankers hit their bonuses and saw no need to deploy more money until early 2023; however regional banks having problems caused further delays with bridge lenders stepping in slowly but surely since then.
Ahern’s diverse client base is seeing fewer deals overall but still managing existing assets while preparing for the next cycle by raising capital where necessary; his advice is simple: you can never buy too much real estate in a down market – this issue will eventually recover so long as work habits haven’t permanently changed (office projects may face headwinds).
