Trends Watch: Navigating Special Situations in Real Estate Debt

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.   

This week, Elana talks with Chris Brunner, CEO, Spectra Capital.  

What’s your outlook on special situations real estate debt investing? 

Right now, the opportunity in special situations real estate debt is unlike anything we’ve seen in recent years. We’re looking at a perfect storm—banks are pulling back from commercial real estate lending due to regulatory pressures and balance sheet constraints, just as the market faces a massive wave of debt maturities. We’re talking $1.2 trillion in commercial real estate (CRE) debt coming due by the end of 2025, followed by another $1.8 trillion through 2026. 

At the same time, rising interest rates have severely limited refinancing options, forcing many borrowers into distress. That creates a significant supply-demand imbalance, where traditional lenders are stepping away just as borrowers need capital the most. 

For firms like Spectra, this is an ideal environment.  

Where do you see the biggest opportunities right now? 

There are three major areas where we see outsized opportunities: 

1. Middle-Market CRE Lending – Banks have largely exited the $1 million–$10 million loan space, leaving a major gap in the market. These sponsors have strong projects but need a lender that can move fast and execute reliably. 
2. Rescue & Bridge Financing – A lot of borrowers are approaching loan maturities without clear refinancing options. With higher rates and tighter credit conditions, traditional refinancing isn’t always viable, which means short-term capital is in high demand.
3. Distressed Asset Acquisitions & Workouts – Not every distressed asset is a bad asset. Some properties just need creative capital solutions—whether that’s a recapitalization, sale-leaseback, or another structured approach. These deals often come with built-in downside protection, making them particularly attractive in this market. 

What’s exciting is that each of these opportunities is driven by fundamental market dislocations, not just short-term volatility. That’s what makes this such a compelling time to invest in special situations real estate debt. 

What are the biggest challenges you face? 

Scaling at the right pace while maintaining strict underwriting discipline. 

Over the past year, we’ve grown from $20 million to nearly $100 million in assets under management (AUM), which means we’ve had to expand rapidly and adapt to a higher transaction volume in a short span of time. Rapid expansion like this is challenging to do effectively while sticking to stringent underwriting principals without compromising on risk management. When deal flow is high and opportunities are bountiful, the temptation is to move faster to take advantage of all the opportunities we come across. However, sticking to our credit standards is non-negotiable and that has proven to be a positive differentiator for us. 

To keep up with our rapid growth, we’re making major investments in: 
✅ Underwriting talent – Expanding our team to ensure that we can give every deal the attention it deserves in evaluating whether it meets our stringent criteria. 
✅ Technology & risk models – Refining our proprietary credit analytics to assess risk more effectively. 
✅ Operational efficiency – Streamlining deal execution so we can move fast without cutting corners. 

At the end of the day, we believe the best deals come from discipline, not speed alone. That’s what keeps our returns strong while protecting investor capital. 

What keeps you up at night? 

My biggest considerations are ensuring our deals are structured with downside protection and maintaining a disciplined approach to underwriting.  

We protect invested capital through requiring conservative loan-to-values (LTVs) typically between 40-60%, first-position liens, and comprehensive collateral packages including personal guarantees. Our experience has shown that loans having these benchmarks tend to perform well, and in the event that an investment underperforms, these benchmarks ensure that we are sufficiently protected from default risks.  

As for maintaining a disciplined investment approach, we invest heavily in our systems and our personnel to ensure that we are able to expand our volume without sacrificing our core principals. For example, we continue to invest in technology and process improvements to streamline origination and portfolio management. Additionally, we strive to maintain a robust deal pipeline to give ourselves a broader deck of investments to choose from, as deal flow is the foundation of our success. Our marketing team is generating over $1 billion in deal flow per month, allowing us to be highly selective while still meeting our deployment targets.  

This disciplined strategy allows us to navigate market cycles with confidence, ensuring that we remain well-positioned regardless of economic conditions. At the end of the day, our focus is on preserving capital, delivering strong risk-adjusted returns, and building a resilient platform for long-term success.   

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.