The Commercial Observer National Finance Forum panel featuring Drew Fletcher, President, Greystone Capital Advisors, titled "Breakout Industries & Money Magnets: Leading Lending Opportunities," highlighted both the challenges and evolving solutions in a shifting market. Panelists acknowledged the pressure from a looming maturity wall, as many construction projects initiated two to four years ago are now facing a very different financial environment. Rachel Davis, SVP of Partner Management and Origination at PETROS Pace Finance, noted that cap rates are lower than expected and interest rates higher, requiring extended timelines to reach stabilization. This mismatch has created growing demand for alternative financing solutions, especially as borrowers seek ways to bridge capital shortfalls.
Fletcher emphasized the increasing role of gap financing and preferred equity, with opportunities largely hinging on how flexible and sophisticated senior lenders are. “Banks are actively finding ways to free up liquidity—using tools like Freddie Mac’s Q-series structures—to redeploy capital more efficiently,” he noted. Most new originations are skewing toward shorter-term loans, with lenders stepping into what used to be the preferred equity space to help borrowers access capital further up the stack. David Friedman, Chief Credit Officer at Arbor Realty Trust, however, cautioned that quick fixes like 12-month solutions may not work, as market shifts are not happening rapidly enough.
Despite the stress points, panelists agreed this evolving market is not inherently unhealthy. Maxwell Wu, Co-Founder & CEO of Fulcrum Lending Corporation, observed that while competition among lenders is intensifying, it’s prompting more innovative capital deployment, with banks and alternative lenders both taking on more risk to stay active. Davis noted that financing costs in the 7–8% range may qualify as "rescue capital," and Adam Solomon, Director at MidCap Financial, suggested banks are still actively lending because they must keep their capital recycling. The glass, as he put it, is “half full.”
In closing, Fletcher offered a cautiously optimistic outlook. He acknowledged peak uncertainty—where even a single tweet can rattle markets—but pointed out that the broader economy is still performing well. With a massive pool of capital still waiting to be deployed, the panel concluded that, if managed carefully, current market conditions could lead to healthier lending practices and increased transaction volumes in the months ahead.
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