Bisnow/Samantha D’Angelo
UMTB USA’s Oliver Anderson, Westwood Financial’s Juyuan Wei, Turner Impact Capital’s Roshan Sonthalia, Palladius Capital Management’s Afshin Kateb, Avison Young’s Marion Jones and Sheppard Mullin’s Peter Ballance.
Capital markets professionals are starting to see more lenders throw their hats in the ring, even on office properties, as a broad variety of lenders make their way back to the table.
“There’s greater diversity in the lender environment right now,” Avison Young Executive Managing Director Marion Jones told attendees at Bisnow’s Southern California Capital Markets and Dealmaking Conference.
Jones has observed increasing activity from banks and life insurance companies, along with private credit vehicles.
Private credit stepped up the last couple of years as banks that had traditionally been frequent lenders to commercial real estate had taken a step back, Jones said at the event, held at the DoubleTree by Hilton Los Angeles Downtown.
Bisnow/Samantha D’Angelo
Arc Capital Partners’ Brad Weinberg, DWS Group’s Nicholas Zaharov, TruAmerica Multifamily’s Ash Baraghoush, Whitman Peterson’s Vaib Vijaykumar and Greenberg Traurig’s Ankush Israni.
Palladius Capital Management Chief Financial Officer Afshin Kateb said his firm has had “the opportunity to truly become a solution provider to a lot of borrowers” that otherwise wouldn’t have been able to get their projects off the ground.
As a provider of private credit, banks being conservative was good for his business. Now, he is seeing a shift as some banks begin to test the waters again.
“Some smaller banks, regional banks are beginning to compete for the right product with the right sponsor, the right quality in the right place,” Kateb said. “So we’re beginning to see more competitive pricing for them.”
Uncertainty and volatility came up often among speakers at the event, whether geopolitical uncertainty, a lack of clarity about interest rates or lingering questions about international trade.
After the June meeting where Federal Open Market Committee officials voted to maintain the federal funds rate in the 4.25% to 4.5% range, in part because of uncertainty on tariffs, a debt and equity professional told Bisnow the decision kept the market in “a kind of purgatory.”
Bisnow/Samantha D’Angelo
Pearlmark’s Kelly Nealis, Tryperion Holdings’ Greg Rollman, PACE Loan Group’s Ina Montejo, IPA Capital’s Anita Paryani Rice and Eisner LLP’s Michael Puleo.
All those things are impacting deals in Southern California, panelists said.
Trade wars have kept offshore capital cautious, Jones said. That group would usually be next to come into a market after private buyers to scoop up properties at a low basis, especially in a gateway city like Los Angeles. But so far, those buyers haven’t materialized, and Jones chalks it up to the lack of a clear path forward on trade and tariffs.
“We’re seeing less foreign capital, offshore capital deployment into this moment in this cycle,” Jones said.
A second-quarter report from Newmark found that private buyers have been the most active purchasers of office properties in the Los Angeles market this year. Major reported deals, such as Uncommon Developers’ $210M purchase of the 601 S. Figueroa St. office tower in Downtown, have involved domestic buyers.
“We have sometimes relied on that calibration of basis buyers saying, ‘I want to come into U.S. gateway cities at a good price per pound,’ but they’re a little bit less robust in their capital deployment right now,” Jones said.