Commercial real estate lending

Raising the capital gains tax and code changes could have more of an impact on the public debt market than rising interest rates, according to a panelist at the Urban Land Institute's Spring event.

STWD 2021-FL2 is pricing a $1.27 billion managed commercial real estate commercial loan obligation that allows the issuer to reinvest principal proceeds.

Credit investors are stepping into a void left by banks and insurance companies and providing debt financing for top-quality hotels in a bet on a post-pandemic recovery, according to a report from the real estate services firm JLL.

About $4 billion in value was erased from 118 retail-anchored properties with commercial mortgage-backed securities debt after reappraisals triggered by payment delinquencies, defaults or foreclosures.

Nearly all of the loans were originated by affiliates of Prime; a majority of the loans were for property acquisitions (26, 72.6%), with the remainder for refinance.

Already contending with stressed retail, hotel and restaurant loans, bankers are beginning to view office lending — historically a safe bet — as increasingly risky as companies of all types rethink their space needs.

Ares Management is among five issuers to have sponsored CRE CLO transactions so far in 2021; Starwood REIT's collateral advisor has also launched a CDO for project finance and corporate infrastructure loans.

Declining month-over-month delinquency levels and the rollout of COVID-19 vaccinations potentially give hope to more normalized economic activity.

Reports indicate distressed owners would rather surrender their hotel or retail properties instead of negotiate workouts on delinquent loans as the pandemic spread carries on.

Demand trends were mixed in the third quarter, with consumers showing more willingness than businesses to take on new debt, according to the Fed’s most recent survey on bank lending practices.