March 03, 2021
France Media reached out to leading direct lenders from across the region to gain their perspectives on the challenges and opportunities in the year ahead, factors most affecting the lending environment, plus the property sectors to watch for 2021.
Managing Director, U.S. West, Trez Capital
What is the biggest challenge you anticipate in 2021 as a direct lender or financial intermediary in commercial real estate?
The effects of the pandemic as they ripple through the markets will be the biggest challenge in 2021. Trez Capital will continue to assess changes in real estate markets and avoid areas where we see challenges. We will look to take advantage of opportunities where we see the potential for reasonable returns on a risk adjusted basis. The management of risk will be a key theme as we move through the pandemic and hopefully return closer to normal later in 2021.
Where do you see the biggest business opportunity in commercial real estate for your company in 2021?
The residential market has performed extremely well in both Canada and much of the U.S. Single-family housing has proven remarkably resilient and many of the markets we lend in are experiencing very limited supplies of new homes and homes for re-sale. Rental markets in the suburbs have, for the most part, remained strong with renters looking to leave congested downtown areas for more space. We will focus on lending in these suburban areas.
What property sector(s) is your company most bullish on in 2021 and why?
We are bullish on the single-family and multifamily residential product. These markets have showed tremendous strength throughout the pandemic, and prior to the pandemic there was a shortage of housing which is still the case in many areas. We are also bullish on industrial product as it has been in high demand in many markets.
Are there any common questions you are fielding from borrowers today and what advice are you giving them?
After the pandemic hit, there was a good deal of concern amongst borrowers that the markets would be affected negatively. Much of this has been alleviated as borrowers have seen strength in many areas of the real estate market. Borrowers have rightly been cautious about investing in some of the segments of the market that have been hardest hit by the pandemic, like hotels and retail spaces, but have been encouraged by the strength in other areas of the market, including residential.