News
Lending: A Firsthand Account
August 18, 2010
| Eighteen months ago, Wrightwood Capital's Bruce Cohen told his team that they were about to go through one of the more challenging periods they would see in their lifetime. After surviving the worst of it, Bruce says his team is starting to use the skills they gained during the recession to gain new momentum for growth. | |
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| Wrightwood's two loans totaling $6.7M on a Walgreen's development in Wheaton represent a recovery from 2009, when it looked at hundreds of opportunities but didn't do any transactions. Bruce says lending has moved back to fundamentals—really checking out an asset before choosing to invest. But another reason for the lack of lending has been lack of supply. With no new space coming online and few buildings changing hands, there's not a lot of reasons to make new loans. As businesses stabilize, however, leasing has begun to improve, asset values are gradually moving off of their lows, and a slowly growing number of attractive transactions are coming to market. | |
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| Something else the Wrightwood team recently noticed is that even senior-level real estate professionals are confused by today's capital markets, and without many forums for discussion, it's difficult to analyze what's happening. In order to facilitate a dialogue, Wrightwood started a blog called The Credit [r.e.]View. Wrightwood pros post about once a week on topics like debt fund management and why "pretend and extend" is perhaps an inaccurate description of lenders' behavior in this market. Like starting a large flywheel, the pace of business is slow to start right now, Bruce says, but the Wrightwood team is working to build that momentum and ultimately place debt and equity investments over the next year. |
