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Mezzanine
Preferred equity investments are gaining momentum in a market where equity investors are looking for lower risk.
The Seattle manager this week originated its first mezzanine loans.
The funding is split into a $67.6m mezzanine loan and a $147.5m senior loan.
Inflation, supply-demand imbalances and the war in Ukraine are making their impact felt while investors shift capital out of public markets, say Richard Spencer, Lee Levy and Andrew White, senior real estate credit investors at Goldman Sachs Asset Management.
Washington manager aims for majority mezz, preferred equity plays in SMILE markets.
Attributing factors include heightened loan complexity and growth of the SASB market, co-heads of the firm’s Capital Markets Group tell REC USA.
The Chicago boutique is steering clear from large-cap office markets as it evaluates more industrial plays.
Rent compromises, amenities are keeping occupancy afloat with room for mezz opportunities.
The firm is also seeing increased borrower focus on speed of execution.