CRE Finance Market Expert Panel Takeaways

CRE Finance Market Expert Panel Takeaways

bonds-vs-mortgages

The MBA held a webinar yesterday that included a variety of lenders on a panel talking about real-time impacts of the Coronavirus on our business. They had good representation for each segment of CRE finance (GSE, Bank, Life Co, and CMBS). Here were some interesting points that were made:

  • The intersection of low rates and health pandemic is very problematic for Life Cos
  • Corporate bond yields continue to blow out (ie, McDonalds AAAs went from 70 bps to 190 bps in the matter of a week)
  • Hotels, Student Housing, Senior Housing, Assisted Living are all vulnerable right now and will be very tough to finance
  • The term of the day is “selective” – meaning ALL deals are being more heavily scrutinized
  • Until there is some clarity on the scale of this pandemic, there will be an “uncertainty premium” priced into the market for nearly all lenders meaning floor rates aren’t likely to go away
  • The lenders who rely on secondary capital markets for their lending appetites (CMBS and GSEs) are set to have a very turbulent couple of months
  • Supply chain disruptions will have large impacts thru Q3 if not further
  • Everything right now hinges on how much longer this lasts
  • Lenders are distracted right now making sure they are caring for their personnel and reviewing portfolios to evaluate concentrations in asset classes and geography

Contact us today if you are looking for additional market intel or to discuss any of your individual projects.

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