The 10-year U.S. Treasury bond yields hit a record low Wednesday, while stocks extend their biggest decline in more than two years and as world health officials warn that the coronavirus could escalate into a global pandemic. Government bonds rallied on worries that the COVID-19 virus could dampen the global economy’s momentum, as the number of confirmed cases outside of China shoots higher. German Health Minister Jens Spahn stated that the largest economy in the eurozone was now looking at “the beginning of a coronavirus epidemic.” There are now 81,245 confirmed cases of COVID-19 and at least 2,770 deaths, according to a tally of cases published by the Johns Hopkins Whiting School of Engineering’s Centers for Systems Science and Engineering.
The resulting impact on CRE debt and equity quotes has been meaningful. Our lender relationships are clamoring for deal flow. I haven’t seen this level of competition for transactions in my 38 years in the industry. Our CMBS lenders are offering full-term interest-only options to enhance returns. Life companies have aggressive debt allocations. In 2019, debt funds became the market share leaders and continue to be so far this year. As a result, the debt landscape is more complex and our advisory capabilities are more needed than ever. To take advantage of this “windfall” for the benefits of our clients, we are currently reviewing company portfolios, pending deals, and near term acquisitions to rebalance and evaluate long-term strategies.
We are advising our clients to act now, there’s little reason to “wait and see”. Please call us as soon as possible to evaluate your near, mid, and long-term capital structures.