European CMBS forced to the brink
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"We’ve not negotiated costs down when we had the opportunity because we want flexibility in our funding" |
The switch in focus from the commercial mortgage-backed securities (CMBS) market to bank debt has brought to prominence a number of investors seeking to take advantage of opportunities in the commercial real estate market. "These funds have solid relationships with banks and a good track record," says Tim Crossley-Smith, head of valuation at property consultants GVA Grimley in London. "Many of the people we see involved have been through the problems of the late 1980s and early 1990s and know how to spot an opportunity." These partnerships are crucial to the ability of investors to prosper, according to Rebecca Worthington, finance director at property investment and development company Quintain. "The key issue for us in raising debt is relationships. We’ve not negotiated costs down when we had the opportunity because we want flexibility in our funding. Indeed, we always have extra headroom in our facilities that, of course, we have to pay for. It is worth it because it offers us the opportunity to move quickly when we spot opportunities.