Few people know the private credit real estate business like Josh Zegen and Adi Chugh.
“When we started 22 years ago the word private credit didn’t exist,” said Zegen, who co-founded Madison Realty Capital in 2004. “We had to kind of create the market in many ways.”
Chugh, by contrast, is a relative newcomer. But he’s made a big name for himself in a short amount of time. He made one of the biggest office loans in Miami history in 2024 when he lent $565 million to refinance 830 Brickell, and last year cut a $1 billion check to finance Gary Barnett’s 655 Madison office tower in Manhattan.
Chugh went from being a broker to launching his TYKO Capital in 2023 with backing from Paul Singer’s Elliott Investment Management. He said the lending side of the business may seem more glamorous than the grind of being a broker, but in reality they’re just two different skills.
“I don’t think either side of the business is less sexy or more sexy,” he said. “I think that’s just a preconceived notion that being a lender is so much more fun than the other side.”
As a broker Chugh realized that the deal flow he was seeing was a commodity, and decided he could make the jump to lender and create value.
The two lenders discussed trends in the real estate lending space Wednesday at The Real Deal’s annual New York City Forum.
Zegen noted the cracks in the corporate credit space, which have been in the headlines recently with Blue Owl’s funds limiting withdrawals.
“Real estate I would say was really beaten down for five or six years and if anything corporate credit kept chugging along,” he said. “We do think there will be a recycling opportunity or a shift where some of the capital that went to corporate credit and private credit [will go] into real estate credit and other asset-based lending opportunities.”
When it comes to projects, Zegen said there’s been a lot of business lending on office-to-residential conversions. But he said owners are starting to have conversations about keeping buildings they had planned for conversions as offices as the leasing market has rebounded.
Chugh said he’s focused on avoiding one of the “fundamental mistakes” of chasing yield, adding that when he started his business he adopted Zegen’s model of being user-friendly.
But Zegen said being flexible with borrowers isn’t as easy as it sounds.
“Every lender in the private credit space says ‘flexibility, speed, certainty,’ and at the end of the day not everyone is created equal,” he said.
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