DENVER, COLORADO (January 23, 2023) - Jeff DeHarty, senior vice president of Northmarq's Denver debt/equity team, was recently interviewed by Wealth Management Magazine for a story titled "Equity investors pull back on the industrial sector as return expectations dim." The story highlights how the sector continues to be viewed favorably in the marketplace, despite lower potential returns which have lead to a reassessment by debt and equity providers.
As construction costs continued to increase across markets, structuring the capital stack with mezzanine or preferred equity for development projects had become more common for development, noted DeHarty.
If their lending vehicle permits it, some institutional investors are now providing mezzanine financing, as it is a comparably more attractive investment alternative to equity financing because it produces a higher yield of 11 to 14 percent at a lower risk.
Topics covered include:
- Sources of capital
- Lower returns
- Recent sales figures