The report claims real estate debt should be the most resilient sector, senior debt should be relatively well insulated, however, mezzanine and bridge financing less so.
According to Bfinance, Covid-19 will significantly affect the fundamentals for real estate and there will be a reduced demand for real estate even in the case of a short, sharp recession.
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It also states that lenders will broadly face pressure from their borrowers for payment holidays.
Peter Hobbs, managing director at Private Markets, commented: “Hotels, retail and leisure are bearing the brunt first, while more resilient sectors include logistics leased to e-commerce operators, cold storage and multi-family real estate.
“Looking ahead, weaker economic growth and more working from home will affect most sectors: expect lower tenant demand, lower rents and more vacancies.”