Photo: Pixabay
Starting in 2022, it will become more difficult for U.S. private equity firms to make large real estate deals in Europe, in part due to a sudden shortage of bond funding from investment banks. Capital continued to flow relatively freely in some continental European banks, which sometimes facilitated small transactions.
Despite the current challenges faced by traditional real estate lenders in countries such as Germany and the United States, growing confidence in the availability of financing has led to some parts of the market seeing large investment bank-led Loans may be ready to be revived. Loan funds for jumbo transactions.
Loan-on-loan financing, in which banks underwrite the senior tranche of an entire loan arranged by a real estate bond fund, has gained importance in Europe in the second half of the last decade, reflecting a widespread increase in the importance of non-financial assets and tied together. -Continental bank lender.
Bond funds are now often even more important than banks in this space. The risk-return relationship in real estate lending is much less suitable for local commercial lenders, especially as real estate values continue to decline in some parts of the market.
For large U.S. investment banks, as well as larger and more international French and British banks, the desire to support the growth of these bond funds is likely to drive relationships with large private equity clients such as Apollo. It is in sync with the enthusiasm of the investment banking sector. Ares, KKR, and Starwood are not just in real estate, but across the entire investment banking business.
“we
