In U.S. markets, CBRE notes that while there has been a general decline in commercial mortgage market liquidity, deals continue to close. Life companies and private equity debt funds have capital to deploy, while multi-family agency lending remains strong.
With signals that tightening may continue, there will likely be a period of relatively conservative underwriting and lender selectivity in early 2023 as rates stabilize. However, opportunities are expected to emerge because of higher mortgage rates and market dislocation.
Borrowers in need of refinancing are likely to face lower proceeds on new senior loans due to higher rates and more conservative underwriting. This “refinance gap” will provide opportunities for alternative lenders to provide mezzanine or bridge lending to cover shortfalls in new senior loan proceeds.
Volta Finance Ltd (LON:VTA) is a closed-ended limited liability company registered in Guernsey. Volta’s investment objectives are to seek to preserve capital across the credit cycle and to provide a stable stream of income to its Shareholders through dividends that it expects to distribute on a quarterly basis.