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From the Current Issue

The distress around distressed debt funds

by Steve Bergsman

The COVID-19 pandemic has introduced dislocation within real estate markets, and lending markets have experienced some shake-ups. That has meant potential debt-investment opportunities. “The current commercial real estate lending market is favorable and offers attractive risk-adjusted returns for investors who are well capitalized and able to respond nimbly to what we expect will be an evolving opportunity set,” says Matt Salem, partner and head of KKR’s real estate credit business. In mid-autumn 2020, the Federal Open Market Committee warned small- and medium-size banks could face stress from defaults on loans to commercial real estate if consumers continued to avoid traveling and shopping. That was also a concern for the real estate debt–fund industry; in the aftermath of the great financial crisis, more stringent banking regulations were put in place, and since then, banks have been underwriting the most secure property loans. In short, the banks had the best pricing and the best transactions. So, if the banks were stressed, where does that leave other types of lenders?

From the Current Issue

Data centers going green

by Sheila Hopkins

It wasn’t very long ago that a data center was simply a corner cubicle where an employee input data into the company’s database — which was often just multiple excel worksheets or perhaps the buggy Filemaker program — for eight hours a day. If anyone needed that data, they had to ask the data inputter to find the appropriate pages, print them off and deliver them to the requester. Rarely was this accomplished within the hour or even several hours. If it was an external request, those pages had to be faxed or mailed. Things moved at a slower pace in those days.

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