Iacono Talks Lending Gap with Real Estate Capital
Crescit Capital Strategies CEO Joe Iacono recently spoke with Real Estate Capital’s Stuart Watson on bridging the lending gap. Iacono believes that even in extension situations, borrowers will frequently need to bring something to the table to reduce the lender’s risk. He also believes that these market conditions are where private capital shines. Read the full story here.
“That will either be through contributing some of their own equity to pay down part of the loan, or by bringing in another lender to bridge the gap created because their interest reserve has to be resized or a value decline. Private lenders are more than likely the ones that will step in to meet those types of needs.”
In addition, alternative lenders playing an increasingly significant role in recapitalizing transactions, either by buying out the whole capital stack, or taking a junior position through mezzanine financing or preferred equity, so that traditional lenders can de-risk their positions. “Private capital shines in credit tightening situations like this,” says Iacono.