Two-thirds of investors and lenders expect a rise in demand for real estate debt during the coming two years, although a notable number believe the financial covenants on loans have become more restrictive.
Of more than 100 institutions quizzed by online property investment platform BrickVest, 80% expected availability of debt to stay constant or increase during the next 12 months.
Close to half of lenders named sourcing difficulties and costs as the biggest challenge they face in the current market, followed by interest rates and international debt market access.
Borrowers’ three most common obstacles were funding difficulties, financing costs and lack of access to international markets.
“While the market expects demand for real estate debt to remain strong, it’s clear that neither lenders nor borrowers are entirely satisfied with how the market is operating, and there is in many cases a disconnect between the buy side and sell side,” said Thomas Schneider, co-founder of BrickVest.
“Many borrowers are finding it difficult to obtain debt solutions matching their requirements in terms of speed and cost, while lenders face challenges in sourcing and bidding for opportunities presented by the right type of sponsors.”
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