The Pacific Club in Newport Beach, CA, was a packed house on February 21, as Southern California’s real estate professionals came together to hear an in depth discussion about the current capital markets from both a panel of active lenders and a panel of equity providers.
The debt panel unanimously acknowledged increasing competition to place loans. “For the major balance sheet lenders, the capital issues are behind us,” noted Jennings. “Now, it’s all about revenue growth, which means we need to lend money, grow our balance sheets, and earn interest.”
An abundance of capital chasing core deals has lowered yields on the safest assets and is forcing equity providers to venture further out on this risk scale. The specifics of the strategies varied, but all of the investors on the panel noted they are having to look further off the beaten path to achieve target yields.