Historically, the financing of commercial real estate has been dependent on investment banks and money center banks and their access to the capital markets. In 2008-2010, the record issuance of CMBS cratered with the credit crisis across multiple sectors with real estate vacancies increasing due to the soft economy and commercial real estate mortgage delinquencies. After a decade of recovering markets, recent turmoil from political tension, the global pandemic and domestic economic restrictions again resulted in constricted real estate markets despite the achieved diversification of new capital sources.
Now, even as markets reopen the various real estate assets are preforming unevenly with medical, distribution and warehouse/fulfillment accelerating; while certain multi-family, urban office and business-focused hotels continuing to lag. Other challenges include disparate capitalization rates, choppy debt markets and the uncertain outlook for economic constraints in the near future.
In private equity, the markets have generally remained robust as creative entrepreneurs discovered new markets, filled gaps, pivoted to new opportunities and some just muscled through. Deal flow had naturally contracted during 2020 but plenty of good opportunities rose to the top and as a new economy takes hold and further accelerates, this sector is expected to continue to provide unique opportunities to generate premium returns while diversifying risk.
Armet has the knowledge, experience and relationships to create solutions to meet the opportunities arising during these unprecedented market conditions.