2023 Western States CMBA CREF Conference 

Helping You Navigate Today's Commercial Real Estate Financing Environment

Las Vegas, NV – Members of our team recently attended the 2023 Western States CREF conference. It was a major success as we gained valuable insight into the current state of the Commercial Real Estate market and further fostered relationships with our lending and capital partners.

Capital Seeking Yield: A prominent theme discussed throughout the conference was the abundance of capital waiting on the sidelines. With US Treasuries offering 4-5% and attractive yields on both corporate and CMBS bonds, many capital providers are limiting their exposure to direct real estate. As lenders remain cautious and selective, spreads have continued to widen out.

Market Outlook: Many participants agreed that while 2023 was a more difficult year than forecasted, the outlook for the industry remains optimistic. It is expected rates will begin to stabilize or decline in the first half of 2024, generating greater liquidity in the real estate markets and leading to an uptick in transaction activity.

Surge in Bridge Financing: Assets underperforming aggressive pro-forma projections has led to a spike in bridge financing originations. Many lenders are offering bridge-to-bridge solutions as well as Fixed-Rate bridge programs to create greater stability for borrowers.

The Emergence of Debt Funds and Credit Unions: Debt fund, private lender, and credit union lending activity has soared as these groups look to fill the void left by banks. Greater flexibility, customized solutions, and less stringent asset requirements have made this capital extremely attractive to borrowers.

Multifamily and Industrial Properties Remain in High Demand: Multifamily and Industrial properties continue to generate the greatest interest among capital providers. Multi-tenant Retail and Hospitality are beginning to see greater interest based on strengthening sector fundamentals. Location, property quality, and sponsorship remain key aspects to asset attractiveness.

As we are faced with a volatile commercial real estate market, Tower Capital remains committed to helping our clients navigate and succeed in this challenging environment. Please do not hesitate to reach out if you have any questions or if you would like to discuss how we can best be a resource for you going forward.

Thank you for your trust in Tower Capital.

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