'Senior debt should be relatively well insulated, mezzanine less so,' says Bfinance

Bfinance has released a report on private equity, private credit, real estate and infrastructure.

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.

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.”

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