Debt

Banks remain a major part of Europe’s refinancing picture, but insurers are also becoming more active.

The chief executive of the Swedish private equity firm’s real estate platform expects 20% of Value Fund VI to be invested in distressed debt.

The investor has already committed to two overseas real estate funds with credit strategies in the past three months.

Some property owners are eschewing this higher-cost form of real estate financing, which they believe is only viable in limited cases.

Many institutions have retreated from direct lending in favor of the investment risk diversification offered by credit vehicles.

Warning signs are appearing, but the net lease sector remains stable.

In an environment where credit is tight and liquidity needs are growing, sale-leasebacks, build-to-suits and net lease acquisitions each have their own set of headwinds and tailwinds.

A net lease should be treated as a corporate finance transaction built on the three pillars of credit, real estate and lease structure, says Fortress Investment Group’s Ahsan Aijaz.

PERE investigates whether net leases are becoming more attractive and whether they will remain appealing if inflation tapers back down.

Assessing tenant creditworthiness is just as important as the physical asset in a net lease deal, but demands a very different set of skills from property investors.