Property debt investors raising money but still looking for distress

With banks hesitant, companies amass dry powder for real estate plays

National /
Oct.October 28, 2020 10:15 AM
Blackstone's Jonathan Gray, Madison Realty Capital's Josh Zegen (Getty; Madison; iStock)

Blackstone’s Jonathan Gray, Madison Realty Capital’s Josh Zegen (Getty; Madison; iStock)

For a few months, real estate debt investors have been raising money and looking for opportunities to spend it.

Now it seems things are coming to a boiling point as competition grows to put that cash to work. Borrowers are getting desperate as loan extensions start to expire on malls, hotels and offices, according to Bloomberg.

“So much money has been raised and most was raised for distressed returns but there hasn’t been much distress,” Dave Karson, vice chairman at brokerage Cushman & Wakefield, told the publication. “It gets expensive to not invest money that you’ve raised.”

While banks and other major lenders remain cautious, Blackstone, one of the world’s largest real estate investors, closed an $8 billion property-debt fund in September.

The debt fund is looking for opportunities created by Covid-driven market dislocation, Jonathan Pollack, global head of Blackstone’s real estate debt strategies, told Bloomberg.

Madison Realty Capital, which has raised more than $900 million since March, recently closed a $173 million construction loan for a rental building at 214 West 28th Street.

[Bloomberg] — Sasha Jones


Related Articles

arrow_forward_ios
Real Estate EFTs See Investment Amid Pandemic Recovery
Why investors are rushing into real estate ETFs
Why investors are rushing into real estate ETFs
Blackstone's Kathleen McCarthy and Ken Caplan with 31-30 Hunters Point Avenue in Long Island City (Blackstone, Google Maps)
Blackstone picks up LIC warehouses for $37.5M
Blackstone picks up LIC warehouses for $37.5M
Blackstone’s Jon Gray and Skyview Mall at 40-24 College Point Blvd (Getty, Shops at Skyview)
Blackstone lands $285M CMBS refi for Flushing’s Skyview mall
Blackstone lands $285M CMBS refi for Flushing’s Skyview mall
Mynd CEO and co-founder Doug Brien and Invesco Real Estate CEO Scott Dennis (Mynd, Twitter via CBRE)
Invesco-backed Mynd to spend $5B on single-family rentals
Invesco-backed Mynd to spend $5B on single-family rentals
Starwood CEO Barry Sternlicht and Blackstone CEO Stephen Schwarzman (Getty)
Blackstone, Starwood up bid for Extended Stay America
Blackstone, Starwood up bid for Extended Stay America
Asking rents for labs or research buildings have been on the rise (iStock)
Investors pour $10B into life sciences real estate this year
Investors pour $10B into life sciences real estate this year
From left: Jrue Holiday of the Milwaukee Bucks, Andre Drummond of the Los Angeles Lakers, Kyle Lowry of the Toronto Raptors and Andre Iguodala of the Miami Heat (Getty)
NBA players invest in $1B Harvard mixed-use development
NBA players invest in $1B Harvard mixed-use development
Joe Riggs, principal at Hudson Companies. (Getty, Hudson)
NYC pension funds make $250M bet on new housing
NYC pension funds make $250M bet on new housing
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...