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An Outlook on Today’s Commercial Real Estate
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June 03, 2024
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Cynthia Nelson, Senior Managing Director and Co-Leader of Real Estate Restructuring Advisory, shares her views on the outlook of today’s commercial real estate market, what’s to come over the next few years and how FTI Consulting is uniquely positioned to support clients in this industry.
Full Interview Transcript:
Analysts are actually estimating now that something on the order of $400 billion is going to be required to bridge the gap in equity financing when loans come due in the next three years. There’s also a lot of concern about who holds all this commercial real estate debt. There’s about $5.8 trillion of real estate debt, commercial real estate debt; about half of that is held by banks. Importantly, two thirds of that 50% portion is actually held by small and regional banks, which we all know are facing their own challenges.
So, we advise our clients about what’s important to create and preserve value in their assets. Vitally critical is understanding the range of potential values and the capital needed, the magnitude of the capital and the timing of that capital over time. In this way, you can come up with a range of feasible solutions that you can talk with your lenders or with your borrowers. You need to understand what alternative uses are. You need to be realistic. You need to be creative about it, but you also need to be realistic, given the current market environment.
FTI [Consulting] is uniquely positioned to assist clients because we have seasoned real estate professionals who have been through many cycles. We really understand the range of possible outcomes when it comes to values. We understand capital sources objectives. We understand what it takes to get a deal done.
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Published
June 03, 2024
Key Contacts
Senior Managing Director, Co-Leader of Real Estate Restructuring Advisory