Mezzanine lending is getting caught up in the same frenzy for yield that is sweeping the broader commercial real estate market.
Competition is ramping up as new players―and more capital―continue to enter the sector. “I wouldn’t label it as abundant, but there are definitely quite a few folks looking to make those investments across all property types,” says Jeffrey Erxleben, a senior vice president, managing director at NorthMarq in Dallas. In the past 12 months, NorthMarq has closed $250.2 million in mezzanine loans.
Even typically conservative lenders such as life insurance companies are pursuing mezz lending in order to capture higher yields. Life companies are making those investments on both existing assets and new construction. “We first saw that activity come in maybe 24 months ago, and we have seen more join the ranks, both for general account money for their own balance sheet and for their third party accounts,” adds Erxleben.
Read more...Mezzanine Lenders Face Greater Competition | Bridge & Mezzanine Finance content from National Real Estate Investor
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