The supply of credit from traditional lenders is likely to remain limited, creating a meaningful opportunity for alternative debt providers to participate in the reconstitution of the capital stack, according to CenterSquare in its recent real estate debt outlook report.
CenterSquare highlights the following for the asset class this year:
“Blend and extend” strategy — 2023 was the year of the “blend and extend” strategy, n with an elevated number of loans maturing through 2025. Additionally, while more than $700 billion in loans were set to mature in 2023, many of those loans have been modified through a “blend and extend” strategy, whereby lenders asked for additional collateral from the sponsor, adjusted the interest rate, and provided some short-term modifications to the loan. This has simply pushed more of these maturities into 2024 and 2025 with hopes of a friendlier refinancing environment.
Traditional lenders are struggling — Tradi
