🕵️ Private Equity Sees What Banks Don't
They're moving billions into distressed assets. Here's where
The great CRE transfer is underway.
Traditional banks are retreating from commercial real estate just as private equity steps in with fresh capital.
That shift is already reshaping who controls the deal flow and how assets are priced.
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Office tells the story best: suburban mid-caps are leasing up while downtown trophy towers sit half-empty.
Residential isn’t offering relief either, with pending sales still stuck near record lows.
And in healthcare, outdated medical office space is languishing while demand for modern outpatient clinics keeps climbing.
In this edition of the AltReports:
💧 Shutdown threat kills flood insurance and freezes closings
📊 CMBS delinquencies ease but $465B maturity wave looms
💰 Brandywine slashes dividend 50% to plug debt hole
🏦 Banks flee CRE as private equity floods distressed deals
🏘️ Pending home sales cling to near-record lows, down 43%
🏢 Suburban mid-cap offices steal tenants from trophy towers
⚕️ Medical office meltdown meets outpatient clinic boom
Video of the Week: Why Wall Street is buying up houses in Alabama
Chart of the Week: Where Properties Are Being Rented Out the Fastest
Podcast of the Week: From $10/Hour to $1M+ in Real Estate by Doing This
Shutdown Threat Chokes Flood Insurance and Freezes Home Deals
Congress is playing chicken with flood insurance funding, and a shutdown will kill policy renewals and freeze home sales in flood zones.
That chokehold is halting closings, hiking premiums, and crashing prices on any property that’s a splash risk.
💡 Investor Takeaway: Target properties in FEMA flood zones A/V in Florida, Louisiana, and Texas with NFIP policies expiring in Q4 2025
CMBS Delinquencies Tick Down but the Crisis Isn’t Over
Lenders are still drowning as CMBS delinquencies barely slipped to 2.61% in March after six straight months of rising defaults.
Banks are handing out extensions like band-aids, pushing $465 billion of maturing loans into tougher refinancing hurdles later this year.
💡 Investor Takeaway: Focus on 2018-2019 vintage CMBS tranches with retail/office concentration above 60%
Brandywine Slashes Dividend to Plug Debt Hole
Brandywine just cut its dividend nearly in half after ugly rent checks left it scrambling to cover debt costs.
It’s redirecting that cash straight into debt paydown and offloading weaker office assets to get its balance sheet breathing again.
💡 Investor Takeaway: Monitor Brandywine’s Philadelphia suburban office portfolio for dispositions
Banks bail on CRE as private funds flood in
Banks have bailed on CRE, choking off credit and driving asset prices down.
Private equity and credit funds are popping bottles with fresh capital, jumping into any stressed deal they can find.
💡 Investor Takeaway: Focus on $5-25M loan sizes where regional banks won’t refinance and target 65-70% LTV with personal guarantees..
Pending Home Sales Stagnate, Opportunity Brews for Distressed Buyers
Pending home sales are still clinging to near-record lows, down 43% from 2020 and 30% from 2019, so the housing market is flatlining.
A tiny uptick in August barely budges the long-term slide, and buyers are still spooked by tight inventory and rising rates.
💡 Investor Takeaway: Target homes with 120+ days on market and 3+ price reductions in markets where pending sales dropped 40%+
Suburban Mid-Cap Offices Are Stealing Rent From Trophy Towers
Downtown trophy offices are rotting with high vacancy as remote work kills demand.
Meanwhile, mid-size suburban office parks with flexible layouts and lower rents are filling up and pushing rents higher.
💡 Investor Takeaway: Target 50K-150K sq ft suburban office buildings within 5 miles of major highways with 60-80% occupancy
Medical Office Meltdown Meets Outpatient Boom
23 million extra doctor visits are flooding the system every year, but worn-out medical offices and strapped landlords are struggling to handle the load.
Big health players are snapping up empty retail shells and old strip centers to build shiny new outpatient clinics, driving rents on decent space through the roof.
💡 Investor Takeaway: Target 10K-30K sq ft vacant retail boxes within 2 miles of hospitals