A NEW NICHE: ADVISING DEBT FUNDS ON REAL ESTATE
In the wake of the 2008 real estate crash and subsequent economic downturn, access to bank loans for commercial real estate tightened significantly, giving rise to a new capital source: debt funds.
Many of these funds were formed to serve specific real estate segments, such as multifamily, mixed-use development, or hotels. The funds have long provided short-term capital to developers and other real estate parties in the form of bridge loans, construction financing and redevelopment loans.
Today, particularly in certain sectors, these funds are starting to see a series of defaults among borrowers, leaving the lenders in control of various real estate assets. These may include:
- Undeveloped land
- Partially completed construction projects
- Income-generating properties with unstable or low occupancy
DWC Advisory Services for Debt Funds
The specific challenge these funds face is that they are not day to day real estate experts. They are experts at lending, but don’t have the infrastructure or the in-house expertise to directly operate and manage the real estate that was lent on. When it comes to real estate advisory, we provide expertise including:
- Entitlements and re-entitlements
- Underwriting financial models
- Updating market studies
- Strategic planning
- Lease negotiations
- Project management
- Due diligence oversight
“Debt funds are finding themselves in the position of owning assets and we can provide the expertise they are lacking. We have the institutional history having acted as advisors to banks and pension funds for many years and we are prepared to supplement and augment their in-house staff as they can outsource these services more efficiently to DWC,” says DWC Chairman and CEO Douglas Wilson.
We stand ready to support our existing and new clients with efficient and best-in-class business remedies. For additional information please contact Douglas Wilson at 619-906-4312.