There are so many variables at play, and a lot of them are unpredictable. We know that a large portion of the real estate loans due in 2023 were extended for a year or possibly two. It's becoming increasingly unlikely that borrowers waiting for relief will see any this year, or even significant relief in 2025, as trends seemingly move in the wrong direction. Property values have taken a huge hit, and cap rates continue to rise. Rising costs in personnel, insurance, and taxes have added a significant burden. Operators are still adjusting to these higher operational expenses, making it even tighter on what they can offer for a property. The issue of supply in the near term is also key. Taking these factors into account, we've been underwriting multifamily deals (for us in Texas) and are finding that we are falling short of covering the existing debt by over 30% in some cases. Will these banks begin to recognize these losses, and what will happen if these losses crystalize on their balance sheets? https://lnkd.in/dQbA_rxM
GCM Capital
Real Estate
Los Angeles, CA 1,064 followers
GCM aims to provide investors access to unique real estate deals without the laborious duties of asset management.
About us
GCM Capital aims to provide investors access to unique real estate deals without the laborious duties of asset management. Every partner in GCM provides unique professional experience to help identify, acquire, and manage top tier investments from acquisition to sale. GCM is headquartered in Los Angeles, CA, and focuses their investments in high growth cities around the United States. GCM will act as the GP (General Partner) and be in charge of guiding the deal from pre-acquisition to implementing the exit strategy. The LP (Limited Partner) will be able to invest alongside GCM and experience the benefits of property ownership without being involved in the day in, day out activities of acquiring and managing the property. Real estate investing has many advantages including competitive risk-adjusted returns, attractive income streams, and the stability of owning a tangible asset. Most people don’t have the time and resources to search and find high quality real estate deals. GCM allows limited partners to take a passive approach while building a top-quality portfolio. GCM focuses on purchasing underperforming properties and repositioning them to their highest and best use.
- Website
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https://www.gcmcapitalpartners.com/
External link for GCM Capital
- Industry
- Real Estate
- Company size
- 2-10 employees
- Headquarters
- Los Angeles, CA
- Type
- Privately Held
- Founded
- 2020
- Specialties
- Real Estate Investment, Apartment Buildings, Creative Investing, Multifamily Real Estate, Real Estate Syndication , and Value-add Real Estate
Locations
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Primary
Get directions
Los Angeles, CA, US
Employees at GCM Capital
Updates
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With the Federal Reserve adopting a more cautious stance regarding potential rate cuts in 2024, market dynamics have shifted, notably with the 10-year Treasury yield climbing above 4.3%. This situation raises questions about the fate of loans that received 6 to 12-month extensions throughout 2023, as many borrowers are attempting to 'kick-the-can' for a more favorable market. With original debt maturities and the added pressure of loans that got extensions, the market is at a critical point. In 2023, modifications were made to $13.6 billion worth of loans across 441 properties. The peak of these modifications was observed in the second quarter. SBLL transactions accounted for nearly half of the year's loan modifications, with CRE CLOs following. The office sector saw the most significant amount of modifications, totaling $4.6 billion, while the multifamily sector followed with $3.3 billion. Is there going to be a breaking point this year?
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San Antonio, Texas, is gaining national attention with its burgeoning economy and major projects, drawing comparisons to its more famous neighbor, Austin. This is evident in its recent ranking as No. 8 in the "Emerging Trends in Real Estate" study by PwC and the Urban Land Institute, highlighting its status as a promising market in the "Super Sun Belt" category. https://lnkd.in/gKZriZBN
San Antonio Warms Up to National Attention With Major Projects, Changing Economy
costar.com