Early speaker responses to pressing questions in CRE

1. Is the current political environment changing your investment thesis? Not investment thesis but definitely underwriting and return requirements. We are underwriting higher expenses, higher cap rates and interest rates and more vacancy. We are concerned about a possible recession so we are only focusing on those "must have" properties.
2. What do you think of the distressed real estate opportunities out there today? We are still not seeing the level of distress in the sale market that we would have expected by now. We expect that it will materialize, but it will take another 6-12 months.
3. Tell us about your last acquisition or financing. We closed two deals in the final quarter of 2024, neither of which were distressed but were in markets we know well and were priced to clear market. We recently refinanced two properties, both of which had higher rates than the previous loan but both of which allowed us to distribute excess proceeds, in once case a significant multiple of original equity.
4. Do you think the Data Center investment thesis adds up? Don’t know.
5. Can you give us the why about why you are selling one of your buildings/investments? We are selling one asset in the LA market as we don’t see the performance materially improving over the next few years and in fact there is more downside than upside.
6. Any workouts can discuss? We act as an advisor on a significant student asset that we had to negotiate relief with the bridge lender. They accommodated.
7. How is it working with the secondary market liquidity providers? I have only heard of one successful recap, of a SF multifamily portfolio.
8. The latest family office you were talking with-How did it go? Haven't spoken with one for quite a while.

Is the current political environment changing your investment thesis?

NO…USING AI for investing can help overcome short term volatility and secure long-term performance

What do you think of the distressed real estate opportunities out there today?

AI can help identify markets that are not really as distressed as they seem, allowing investors to buy cheap and sell that much higher in 2-3 years.

Is the current political environment changing your investment thesis? Tariffs produce higher inflation in the short term and higher rates and more stress in retail and warehouse, so looking for opportunities there.

What do you think of the distressed real estate opportunities out there today? Not as much as you would think, and most of it in B/B+ office in CBD’s and fix and flip multifamily in overbuild southeast markets.

Tell us about your last acquisition or financing: bulk warehouses in Savannah.

Do you think the Data Center investment thesis adds up? Yes: short term volatility in demand due to AI bubble and grid issues, but long term a winner.

Is the current political environment changing your investment thesis? Yes, a large part of our strategy is focused on hotels in NYC. We have put a ground-up hotel development on hold due to the cost of materials and interest rate environment. Also locally, we have changed our NYC multi-family stabilized strategy aside as we no longer believe there is any margin for profit. We have been shifting our focus to outside of New York City.

What do you think of the distressed real estate opportunities out there today? In my firm's strike zone of hotels and multifamily, if you have connections to bring you a deal where the basis is low, then the last thing you will need is stable money along with deep pockets to carry for the next several years. Then it will be worth it.

Tell us about your last acquisition or financing. Several months ago we paid off our acquisition loan from a major bank by bringing in another investment partner for our 6th Avenue property.

Do you think the Data Center investment thesis adds up? This question does not apply to me, not our focus.

Can you give us the why about why you are selling one of your buildings/investments. As stated above, multifamily in NYC with a stabilized component becomes difficult to manage and to bring cashflow to all investment partners. Each year, operational costs are increasing, leaving less on the table for ownership.

Any workouts can discuss? As stated in your third question, we brought in new capital in the form of equity. By diluting our ownership, we also saved ourselves greatly by paying off the lender in perpetuity.

How is it working with the secondary market liquidity providers? This question does not apply to me.

The latest family office you were talking with-How did it go? We have continued partnerships and new relationships with joint ventures that are current and are mutual in interest level per project.

Is the current political environment changing your investment thesis? We have consistently high underwriting standards that do not change with the environment. Our operating partners appreciate knowing our standards as it helps them with their due diligence. We are not under any pressure to invest but remain active despite the uncertain environment.

What do you think of the distressed real estate opportunities out there today? We are not seeing many distressed assets that we would like to invest in. We anticipate some opportunities in the office sector but have not identified any to date.

Tell us about your last acquisition or financing. We made a preferred equity investment in a small portfolio of unanchored retail strip centers. The portfolio was purchased at an opportunistic cap rate because they were spun out of a larger portfolio of properties that were net leased to Town Fair Tire.

Do you think the Data Center investment thesis adds up? We do not invest in the sector.

Can you give us the why about why you are selling one of your buildings/investments. We are a preferred equity investor in a large portfolio of neighborhood shopping centers. The principal is selling for estate reasons and we are comfortable with our investment performance at the anticipated sales price.

Any workouts can discuss? We continue to see lenders willing to work with us and our partners to extend our loans until the markets settle down.

The latest family office you were talking with-How did it go?

1. Is the current political environment changing your investment thesis? No.
2. What do you think of the distressed real estate opportunities out there today? Strong pipeline with lots of distress.
3. Tell us about your last acquisition or financing. Lake Charles Grocery anchored center 8.5% cap new center with community bank debt on recourse.
4. Do you think the Data Center investment thesis adds up? Sounds too good.
5. Can you give us the why about why you are selling one of your buildings/investments. End of hold perio.

Is the current political environment changing your investment thesis?

Borrowing costs have become more volatile, but we remain constructive on the multifamily equity opportunity. One potential benefit is that cheaper capital from a lower 10-year Treasury would improve purchasing power for apartment investors. More market participants could also increase the volume of multifamily transactions. More volume could provide an outlet for pent-up multifamily buyer demand and investors looking for liquidity. In the event the Fed lowers borrowing costs because, the economy contracts, multifamily investment may act as safe haven.

What do you think of the distressed real estate opportunities out there today?

Fewer opportunities exist in multifamily than it might appear due to the long-term fundamental outlook, but we believe investors’ need for liquidity should create opportunities in the near term.

Can you give us the why about why you are selling one of your buildings/investments.

We are taking advantage of liquidity in a non-target market to trade into a target market investment.

1. Is the current political environment changing your investment thesis? No
2. What do you think of the distressed real estate opportunities out there today? There is a steady flow of quality deal flow today although I do not expect it to last much longer.
3. Tell us about your last acquisition or financing. We acquired 222 Broadway recently for $147M and plan to convert it to 784 apartments. MSD provided a $288M construction loan for the project.
4. Do you think the Data Center investment thesis adds up? Data Centers are not my space. It sounds like fundamentals are good but there is a lot of theoretical supply, so developers should be focused on projects that can be pre-lease.
5. Can you give us the why about why you are selling one of your buildings/investments. We aren’t selling anything, at the moment.
6. Any workouts can discuss? No workouts.
7. How is it working with the secondary market liquidity providers? We don’t operate in this space.
8. The latest family office you were talking with-How did it go? We speak with family offices of different kinds. I would say it depends on how they feel at the moment. We are close with MSD Capital, which has evolved from family office to more institutional.

Is the current political environment changing your investment thesis?

MACRO UNCERTAINTY HAS CAUSED FINANCING MARKETS TO PAUSE. DECISION TIMELINES ARE BEING STRETCHED SO DEALS ARE SLOWED TO SIGN UP AND FUND.

BACK DROP IS THAT ~ $1TR MATURITIES IN 2025 SO AT SOME POINT BORROWERS WILL NEED TO COME TO TABLE AND ACCEPT CURRENT COUPONS AND CRE RISK PREMIUM SPREADS. COST OF CAPITAL ACROSS BOARD FOR CRE DEBT IS HIGHER THAN IT ONCE WAS AND POLITICAL BACKDROP SUGGEST RATES WILL BE HIGHER NOT LOWER OVER NEXT 12 MONTHS.

What do you think of the distressed real estate opportunities out there today?

DISTRESSED REAL ESTATE OPPORTUNITIES ALWAYS EXIST.

TODAY THE OPPORTUNITY SET IS IN THEORY LARGER DUE TO LACK OF LIQUIDITY FOR CRE INVESTMENTS COMBINED WITH HIGHER RATE INTEREST RATE BACKDROP. UNFORTUNATELY BORROWERS WHO EXECUTED THEIR BUSINESS PLANS OVER PAST 2-3 YEARS MAY NOT HAVE CASH FLOW TO REFINANCE THEIR MORTAGE LOANS FROM 2021-22. DELEVERAGING WILL BE REQUIRED, VIA EQUTIY RAISE OR PREFERED EQUTIY INFUSION. THESE ARE OPPORTUNITES WE ARE FOCUSED ON.

Tell us about your last acquisition or financing.

MARATHON CRE LOOKS FOR INTERESTED SITUATIONS VS SECTORS SPECIFIC PROPERTY TYPES. BECAUSE WE FOCUS ON SENIOR SECURE PORTION OF CAPITAL STACK WE GET COMFORABLE WITH BORROWERES THAT HAVE EQUITY SUBORDINATE TO OUR POSITIONS. IN UNCERTAIN TIMES WE FOCUS ON CASH FLOW, STRONG SPONSORSHIP, NEWER VINTAGE PROPERTIES IN SUBMARKETS THAT CAN SUPPORT OUR LOAN EXIT ASSUMPTIONS AND DEAL LEVEL THESIS. MANY OF OUR LOANS ARE WITH REPEAT CLIETS, WHICH ALSO PROVIDES SOME COMFORT.

Any workouts can discuss?

BORROWERS NEED TIME, WE NEED DELEVERAGING

How is it working with the secondary market liquidity providers?

CRE MORTAGE LOANS ARE MORE LIQUID THAN PEOPLE THINK. THIS IS SOMETHING MARKET HAS WRONG. NORMALLY WHEN YOU WRITE A LOAN, YOU HOLD TO MATURITY BUT WE HAVE SEEN MANY LOAN POOLS FOR SALE, AS WELL AS ONE OFF LOAN SALES OVER LAST 24 MONTHS.

The latest family office you were talking with-How did it go?

HNW AND FAMILY OFFICE REALLY LIKE CRE LENDING SPACE. IT’S PERFECT HEDGE TO CRE EQUITY PORTFOLIO.

Is the current political environment changing your investment thesis?

No, but buying is even harder to do.

What do you think of the distressed real estate opportunities out there today?

Little that's appropriately priced is available.

Tell us about your last acquisition or financing.

312 units built in 1997 in Richardson, TX. Assumed FNMA fixed rate financing.

Do you think the Data Center investment thesis adds up?

Lots of volatility.Founder & President at DVO Real Estate

Can you give us the why about why you are selling one of your buildings/investments.

Still too close to bottom of the market and real activity which will need to value improvement, has been delayed by trade upheaval.

How is it working with the secondary market liquidity providers?

lots of questions, not so much desire to do things that are outside the basic vanilla

The latest family office you were talking with-How did it go?

taking a pause until trade issues subside.

Is the current political environment changing your investment thesis? Minimally, in short we view private real estate investing as being a long-term business and believe in investing through cycles. We view the current political environment as primarily short-term “noise.” We are doing whatever we can to mitigate tariff risk on in process developments but have not yet seen any actual impact that we haven’t negotiated away, only the fear/perception of price increases.

What do you think of the distressed real estate opportunities out there today? Other than office, the presence of true distress is sparse in my primary coverage area of the Carolinas. The office that has been distressed has generally been obsolete and likely needs government intervention to be converted or demolished.

Tell us about your last acquisition or financing. We are in the process of acquiring a 2013 vintage multifamily asset in Raleigh. There is a light value-add opportunity as well as an opportunity to utilize a property tax abatement program through the state of NC because the majority of residents are earning less than 80% of AMI. There was an existing HUD loan in place but we elected to retire the HUD loan and replace the debt with Freddie Mac.

Do you think the Data Center investment thesis adds up? I think there are select opportunities but it feels a bit like life sciences 5 years ago – we admittedly have not spent much time getting up to speed on this topic.

Can you give us the why about why you are selling one of your buildings/investments. We are trying to avoid selling unless we absolutely have to because we believe values will improve in the next 12-36 months.

Any workouts can discuss? No

The latest family office you were talking with-How did it go? I believe that family offices in general can align with our way of thinking but it’s also easy to throw family offices into a bucket and talk about them in generalities when in reality each one is very different. Some think very similar to private equity while others have very different goals and you have to truly get to know the individuals there in order to align your goals. It’s likely unrealistic to have a relationship with 100 family offices unless the sponsor has a very robust IR team.

Is the current political environment changing your investment thesis?

No, we are focused on multifamily and the premise for owning and investing apartments is not materially affected by the current political platform. More concern is increasingly prevalent local politics and rent control and pro-tenant friendly-restrictions.

What do you think of the distressed real estate opportunities out there today?

We see some distress in our space, but not a lot. There are a number of poorly and overly capitalized HNW syndications in less appealing submarkets that have become available. The real estate risk is too high (neighborhoods, costs to stabilize and cure deferred maintenance/neglect, etc.).

Tell us about your last acquisition or financing.

Acquired a stabilized asset in Golden, CO. Top tier demographics and jobs, high quality of life desirability. Secured a Freddie loan, fixed rate, 5 years, 130 Bps over 5 year, 3-years I/O. Balance sheet equity for 40%.

Can you give us the why about why you are selling one of your buildings/investments.

Nothing on market for sale currently, expect that will change by end of the year.

7. How is it working with the secondary market liquidity providers?

We have not had to go to secondary market to recap or find alternative financing for our portfolio.

The latest family office you were talking with-How did it go?

We speak with many FO’s looking to rotate from one asset class to multifamily or those seeking increased exposure to the asset class. A lot of investors want debt-neutral positions, day one, on their new capital. That is hard to do in the open market for better quality opportunities.

Is the current political environment changing your investment thesis?
Minimal impact; we focus on long-term fundamentals, not short-term noise. Still bullish in the multifamily and single-family rental space.

What do you think of the distressed real estate opportunities out there today?
There are definitely some real distressed opportunities surfacing—especially in office, select multifamily, and over-leveraged developments. But yes, a lot of "extend and pretend" is still happening, particularly where lenders are avoiding mark-to-market losses by kicking the can with short-term extensions

Tell us about your last acquisition or financing.
CoGP equity to an 82-unit BTR development in the affluent submarket of Houston

The latest family office you were talking with-How did it go?
Productive—high alignment on industrial strategy; next step is co-investment structuring.

Is the current political environment changing your investment thesis? No.

What do you think of the distressed real estate opportunities out there today?

I don’t think we are at the bottom yet. Transaction pricing cap rates vs. what we see from NCREIF ODCE managers are still a bit apart. ODCE managers continue to overvalue their properties. Now is the time to prepare and find the managers that you will feel comfortable investing into. Prepare for the next fund that can take advantage of discounted assets.

Can you give us the why about why you are selling one of your buildings/investments.

Nothing being sold at this time.

Any workouts can discuss?

A few of our underlying managers have gone through workouts, but those were short term bridge loan-based lenders so workouts are expected from time to time.

How is it working with the secondary market liquidity providers?

It’s not been a great experience. For the calls I have been willing to take, the sellers were very short on price details and then call back on a frequent basis and do not leave messages. I’d be interested in a secondary sale or purchase if they were more transparent in their pricing.

Is the current political environment changing your investment thesis?

Political risk is just one risk to study as part of your due diligence process. That being said you have to have the skill to determine a real threat from a perceived threat, or a transitory threat. A real estate deal is 5, 10 years or more. A 6-month period of political choppiness is not a reason to do or not do a deal. An investor with conviction uses market fear to drive better prices.

What do you think of the distressed real estate opportunities out there today?

I fall in the camp that you should buy good properties at fair prices. What people actually want are distressed sellers, not distressed assets. A great investor plays the probability game, in that they buy good things and make them better. You can get lucky in buying a dumpster fire, but, your odds of failing go way up. That’s not what Blackstone does, or Warren Buffet, or other great investors that have 50-year careers.

Tell us about your last acquisition or financing.

Our company, Bear Real Estate Advisors, www.bear-advisors.com, helps sponsors find single check common equity. We have been active in industrial, student housing, multi-family, retail and hotels this year. Most of the deals fall in the return range of 17 to 20% IRR (at the deal level) over a 5-year hold. It is submarket dependent on what deals get traction. This is micro business. Every street has a story to tell. You either like the ending or you don’t.

Do you think the Data Center investment thesis adds up?

I sure hope it works. The story sounds true, will it be actually true? These hyperscaler locations could have $Billion valuations. How many investors can buy them? It’s few. Be prepared to hold these assets forever. If you can’t revaluate your strategy.

Any workouts can discuss?

There are creative paths to help apartment sponsors refinance their properties. Most of them require ownership dilution and structured equity returns to the new investor. But the ownership gets to fight another day. The goal is to get to the other side with your reputation, some capital, and your team. Let go, move on, and do better next time.

How is it working with the secondary market liquidity providers?

The recycling of capital is under appreciated. Yes, you are taking a loss on your position, but you then get to reinvest in new vintage deals with realistic cost of capital models. A small loss can lead to a big gain. Your ego suffers, but you do better in the long run. And it is a long run business.

The latest family office you were talking with-How did it go?

People say they want to meet family offices, but what they really mean is they want to meet rich people. They want someone to write a check and get out of the way. That is a unicorn that doesn’t exist. It’s not a mistake to look for family offices it is a mistake to think it will be easier. No short cuts in raising capital and building relationships.

Is the current political environment changing your investment thesis?

No.

What do you think of the distressed real estate opportunities out there today?

We see more capitulation and distress now than last year. Borrowers are simply running out of time, creating opportunities.

Tell us about your last acquisition or financing.

We are doing Rescue Pref for broken cap structures on performing Multifamily assets.

Do you think the Data Center investment thesis adds up?

Not our area.

Can you give us the why about why you are selling one of your buildings/investments

Not selling at this time.

The latest family office you were talking with-How did it go?

We have a strong group of FO’s that we work with and they are on offense, much less concerned or risk off than many institutional LP’s.

Is the current political environment changing your investment thesis? Yes – rates drive everything and market turmoil making tough to lock in cost of debt. Also have a vast mix of tenants in our single tenant boxes greatly impacted by tariffs. From Ford and small manufacturers of medical devices.

What do you think of the distressed real estate opportunities out there today? Focus is single tenant so limited stress. Know names like Red Lobster, Walgreens. Industry bankruptcy’s popping up like Zips car wash and numerous franchise systems. For owners of single tenant not so much stress in portfolio performance – only looming debt maturity.

Tell us about your last acquisition or financing. Bought $140M investment grade build to suit 1.1M SF industrial w very complicated cap stack. Also closing on sandwich lease at airport w 38 years left. 2 very different type assets and structures.

Do you think the Data Center investment thesis adds up? Staying out of it for now and leaving to big boys with bigger checkbooks. Lot of investment and limited RE fundamentals. As push into tertiary markets and smaller credit operators think more risk is being introduced to RE market

Can you give us the why about why you are selling one of your buildings/investments One was obsolete office – dark but still had term on lease from investment grade tenant and term on debt – but wanted to move on from asset class. Also need to recap a large portion of one of our vehicles and went with asset level execution past 18 months

Any workouts can discuss? Recently went through Zips BK on 2 of our car washes I can discuss

How is it working with the secondary market liquidity providers? Been in the trenches with many different groups. Can be tough and pricey space. Have seen some efficiencies in the DST space. Also, people trying to broker deals were there is noise

The latest family office you were talking with-How did it go? Lot of groups have raised lot of money even in this market. Sold everyone on credit but need to put it to use. Specifically talking with people about equity investment in a very structure and targeted approach in the net lease world and going very well. Starting to turn term sheets.

Is the current political environment changing your investment thesis? It is indeed influencing our investment thesis given the tariff policy uncertainty and its impact both to consumers in general as well as the cost of materials. The biggest impediment isn’t generally the policy, but it is the uncertainty in which decisions cannot be made.

Do you think the Data Center investment thesis adds up? I think it holds up for the largest companies and developers, it does seem that it is getting overbuilt from the outside looking in when you factor in the needed power supply required in the future. My guess is the developers in prime locations will continue to succeed but there will be some groups that won’t be able to achieve the power generation they need to move forward with projects.

The latest family office you were talking with-How did it go? We strive to cater to families as we ourselves are an affiliate of the Fisher family in New York, so we know how to speak the same language as other family office investors. The family office world is much more personal than the traditional pension/insurance investing world and it is more dependent on trust at the personal level. Generally, we’re seeing family offices deploying given the lack of equity capital being deployed by institutions and they seem more willing to deploy capital.

Is the current political environment changing your investment thesis? Given that most of projects have a bespoke capital structure (many with government subsidy or municipal partnerships), we’re taking extra caution

What do you think of the distressed real estate opportunities out there today? In the Greater Boston area, they have really fallen into two main buckets and hitting the market very slowly, as driven by lender requirements: 1) Sale of distressed office buildings approaching debt maturity and 2) land deals where developers entitled projects that are not currently feasible without municipal assistance (i.e. tax deals, affordability relief, etc).

Tell us about your last acquisition or financing. Ground up 62-unit mixed-income project with 11 sources of federal, state and local funding

Do you think the Data Center investment thesis adds up? Our issue with the thesis is that the technology is moving so quickly, so by the time a data center is built, could the “guts” of the center be obsolete?

Can you give us the why about why you are selling one of your buildings/investments. Selling Class B/C multifamily and reinvesting into newer core+ projects – the 25-50% of additional yield to own older product is not compelling

Any workouts can discuss? Working with several regional lenders trying to solve land loans on entitled projects.

How is it working with the secondary market liquidity providers?

The latest family office you were talking with-How did it go? It is very dependent on who the decision maker of the family office is – the last project we did with a family office, we developed a 279 bed student housing/ co-living project next to Harvard and the partnership was exceptional because the patriarch of the family office was a pleasure to work with.

Is the current political environment changing your investment thesis? We aren’t changing our thesis, but we are cognizant of how tariffs may impact certain sectors of the real estate market.

What do you think of the distressed real estate opportunities out there today? we are seeing an increased flow of distressed opportunities including note acquisitions, lender forced sales and higher leveraged refinancings

Tell us about your last acquisition or financing. We are actively providing senior bridge loans on all property types, and last quarter we closed over $800MM of these transactions.

Do you think the Data Center investment thesis adds up? Yes, we continue to be interested in the space in a variety of capacities including powered land loans, pre-leased construction loans and acquisitions of triple-net-leased data center assets.

How is it working with the secondary market liquidity providers? We have seen strong demand from our back leverage providers but at slightly higher spreads in the last month.

1. What do you think of the distressed real estate opportunities out there today?
We’re seeing a growing number of distressed opportunities, particularly in sectors like office and now even some multifamily, as borrowers facing debt expirations are getting less flexibility from the banks.

That being said, we’re highly selective—distress on its own isn’t enough to justify an investment. We look for situations where our operational expertise can make an impact and where there’s a clear strategy to unlock long-term value.

2. Tell us about your last acquisition or financing.
Our most recent acquisition was a 227-unit multifamily community in Arlington, Virginia. The asset presented a unique value-add opportunity with significant upside potential through targeted renovations that will enhance the property’s appeal and overall performance. Its prime location in Arlington will allow the asset to benefit from robust market growth. The deal aligns well with our value-add strategy and long-term investment thesis.

3. The latest family office you were talking with—how did it go?
We work closely with institutional partners, including many family offices who value our disciplined investment strategy, hands-on operational capabilities, and consistent track record. Given our focus on high-growth, supply-constrained markets across the U.S., there’s strong alignment around how we approach risk, patience, and long-term value creation.

As a result,t we have successfully invested with several family offices over the last few years and continue to work with them as key strategic partners.

Is the current political environment changing your investment thesis? It is certainly a complex consideration, but our investment theses are rooted in asset classes / locations we believe will have mid/long term secular tailwinds. Certainly, near-term political impacts / policy are a consideration within each investment, but wouldn’t classify it as necessarily “changing” our theses.

What do you think of the distressed real estate opportunities out there today? Due to the sheer amount of capital availability, the truly distressed opportunities are less deep than I think many have expected. We have capital available / playing in this space, but have seen minimal amounts of true distress to date.

Tell us about your last acquisition or financing. Senior financing on a multifamily / mixed-use predevelopment site in Boston, Massachusetts. 18-month term, 35% LTV, 500s over SOFR.

Do you think the Data Center investment thesis adds up? Yes, we have a lot of conviction around data centers, being still in the very early innings of AI / cloud computing / etc. and belief again in the long term, secular demand as well as the strength of the institutions investing within the space. Like any investment, we have to be cognizant as an industry to not get over our skiis, but do believe still very early. On the debt side, we are mostly looking at short term powered land plays / bridge debt versus acquisition or construction financing.

Is the current political environment changing your investment thesis?

Undoubtedly. It has given us the opportunity to focus back on Southern California (port driven) markets that had heated up too much during the pandemic. With the drop in land pricing, and value-add opportunities, it has allowed us and our current capitalization structure to be competitive again. Our core markets continue to see the fallout from CA tenants. But we have been very focused on on-market and off-market opportunities for value-add acquisitions in Southern California as the reduction of imports has already started from the tariffs.

Do you think the Data Center investment thesis adds up?

It is not as easy as people think. Having land close to a substation is not all you need. In fact, it often doesn’t matter. The land speculators are clouding the market. Renewable and alternative sources of energy will be important along with the constant innovation in chips. The density is quickly changing the size of data halls and shrinking the footprint of what hyperscalers and operators need. I do think we will see a larger need for smaller pieces of land and power, ranging around 50MW.

Can you give us the why about why you are selling one of your buildings/investments.

We are in the market to sell a large piece of powered land. We had annexed, entitled, and permitted it for 1.7M SF of industrial. However, we found an opportunity to capitalize on selling it to a data center operator which is the highest and best use.

Is the current political environment changing your investment thesis? No, however we do believe that the current political environment is a contributing factor to an increase in non-performing loans available for purchase.

What do you think of the distressed real estate opportunities out there today? We are very excited about the current and medium term opportunities in distressed or non-performing loans collateralized by commercial real estate and investment properties.

Tell us about your last acquisition or financing – We restructured a $25+ million loan collateralized by two high-end single-family water front homes (investment properties) in Miami with a combined value of over $70mm, at an interest rate of 18% for one year with additional credit enhancements.

Michael Moreno

Partner, Executive Managing Director

Safe Harbor Capital Partners

Its our main business (we buy non-performing loans and restructure them into performing loans). Happy to discuss many on a no-name basis.

The latest family office you were talking with-How did it go? Very well. $50million commitment to our latest fund.

Is the current political environment changing your investment thesis? We remain bullish and Honestly, we are much more sensitive to state and local politics than federal politics. And thankfully, we can freely choose what states we operate in.

What do you think of the distressed real estate opportunities out there today? They are quietly trading, and it’s happening mostly prior to foreclosure along it a quiet but fruitful pool of opportunities. Land loan maturities are abundant and syndicated value add MF deals are ripe for restructuring. I’ve participated in both and I’m currently working on several. I love it, especially bc most opportunities don’t require for a total loss for the current investors.

Do you think the Data Center investment thesis adds up? We are not interested in assets that correlate with industries that evolve rapidly. It’s too risky for long term holders like us. Residential real estate, i.e. shelter, is the only essential good we need to survive that must be made by man.

Can you give us the why about why you are selling one of your buildings/investments. We are disposing of a master planned community as developed lots to a major homebuilder. This was always an exit option and today that provides liquidity to take advantage of distressed opportunities in our pipeline while providing great returns to our investors, driving business to our site contracting division, and deepening our track record and relationships with national homebuilders who are hungry for shovel ready lots.

Any workouts can discuss? I have a fun recap story that was v hairy and was close to a bad result and I can happily say it ended up being profitable. Happy to share what I can.

How is it working with the secondary market liquidity providers? ABUNDANT.

The latest family office you were talking with-How did it go? They have all been very excited about the opportunities that are coming to the surface, but a vast majority remain patient and very selective.