What opportunities are in debt structure products across the capital stack?
December 14, 2016
With the economy in an active investment phase in debt and restructured products across the capital stack, panelists discuss opportunities they see, including transitional assets, different geographies, and non-traditional banking resources.
Samantha Davidson: As a group that has a chance to allocate capital and so is really trying to look for optimal risk adjusted returns, the ability to lend on transitional assets for all of the market dynamics that were just mentioned we think is really interesting. Particularly because what we're finding is that you're able to achieve net returns that are commensurate or even higher than what you can achieve when you are taking more risk as a value-add equity investor. So I think as we think of places, assuming that your cost of the capital allows for this, it's an extremely interesting market opportunity today.
Christopher Schlank: Over the past four years, three years we haven't had one bid from a traditional bank. I mean every bid that we have for financing the deals that we do are coming from non-traditional banking sources. And as David said, it's a lot of guys that are taking the whole stack and then parsing it out to two, three trenches. So it's just the whole paradigm of financing for what we do on the value add side completely changed. And I don't see that changing. I think it's going to get even better or worse. I'm not sure what to say.