Following on and an update from last Wednesday.
Our key observations over the last week:
- The bias remains to debt capital tightening, in particular we have seen some non-banks tighten credit criteria or pause lending rather than price for risk.
- That said we remain encouraged by the amount of debt capital remaining at play for real estate, particularly sub $20mill loan amounts.
- Lenders, and banks in particular, are aware of the hardship of some borrowers are facing either through their direct business or tenants and pressure on rents. We are working with our clients to actively manage stress with their lenders and have been pleased by the collaborative responses to date.
- Valuation of assets is increasingly a challenge, we have seen reports a few weeks old called back with valuers looking to adjust amounts down. Management of valuation is really a case by case story as it relates to the property asset type, income profile, size, location and other factors.
- Unlike post GFC there is a lot of capital in waiting, a lot. We think the challenge post COVID may be more demand than capital supply related.
Again all Stamford State offices remain open but working remotely.
We have spent much of the last week working with our clients and their lenders to navigate these times. If you are experiencing tenants in hardship please reach out as we can assist to navigate the discussion with your lender.
Wishing you all well
Your certainty in commercial property capital
