GlobeSt. Quotes Manatt Partner on Dynamic Real Estate Interim Finance Market
"Something New for DC's (Low-Demand) Gap Finance Market"
GlobeSt.
July 29, 2013 - Manatt's Clayton Gantz, a partner in the firm's Real Estate & Land Use Practice, was interviewed by GlobeSt. for an article on the changing nature of the real estate finance market, particularly with regard to gap finance loans.
"It's surprising how quickly the gap financing market went from awful to fabulous," Gantz told GlobeSt. "Bridge financing is being provided in contexts where I am not used to seeing it provided."
Gantz also discussed the availability of mezzanine financing for construction, saying that "prior to this recent cycle I have never seen mezz debt in construction, and the fact that I am seeing it provided now leads me to believe that the pressure on these capital providers is greater than it ever has been."
The concern, he continued, is that competitive pressures will overtake caution and underwriting standards will start to erode.
"That, of course, is the subtext to all these transactions. It certainly was a major theme leading up to the crash-lenders get too aggressive, over leverage the properties, and then everyone pays a price if the economy turns or fundamentals change."