Refinancing activity is shaping today’s commercial real estate lending market, as borrowers reach the end of loan extensions and lenders bring previously troubled assets back to market. Although liquidity has returned, many deals are more complex than they were before rates rose, often requiring mezzanine debt, preferred equity or other sources of capital beyond a traditional first mortgage. Don MacKinnon, head of commercial real estate credit and a portfolio manager at Sound Point Capital, said the market is moving through a slow recovery, with enough capital on the sidelines to support price discovery. But in today’s environment, he said, the central question is not whether capital is available — it is whether the deal can be made to work.
How is deal complexity shaping commercial real estate lending today?
Complexity is the name of the game today.
Deal activity is much lower than it was before rates began rising, and much of today’s
