(Bloomberg) -- Evercore Inc. is growing its real estate advisory team as it looks to capitalize on the rise of private lenders in the space.
Neil Wolitzer, a former partner at Goldman Sachs Group Inc., has joined the New York-headquartered investment firm’s business as it pushes to advise firms looking to buy and sell property and refinance their debt in a market where private lenders are usurping traditional banks.
“We’re in a moment where private credit is going to shine because of what’s coming due and what’s available to feed what’s coming due,” said Wolitzer in an interview after joining Evercore’s real estate group as a senior managing director.
After one of the worst periods for real estate in the past decade, some investors see an opportunity to capitalize on the more than $3 trillion of property globally that has debt set to mature by 2025. With central banks signaling that rates are stabilizing, investors are also better able to assess value of deals.
With major banks looking to reduce their exposure to commercial-property loans, especially offices, there’s also a growing gap for private lenders to fill. Firms seeking to refinance property debt this year may find more opportunities from private sources, said Jarrett Vitulli, senior managing director at Evercore, which doesn’t lend its own money.
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This year, investors such as pension funds, institutions and wealthy individuals may make more acquisitions of operating companies to manage assets like student housing, data centers and industrials, helping the largest portfolios become more efficient, Vitulli said.
He added that the suffering US office market may also see some more interest from similar investors who have the flexibility to buy and sell without the restrictions of closed-end funds. Large family offices and hedge funds are exploring deals for offices in cities like New York, San Francisco and Washington, D.C. Meanwhile, investors from Asia and the Middle East are also targeting European assets.
This property cycle could also be a “proof case” for public real estate investment trusts, known as REITs, according to Wolitzer. They have plunged in the past couple of years as high interest rates squeezed those investments.
The new financing environment is also pushing some founders and executives to ask more existential questions, about whether what they’ve built should grow further or be acquired, Wolitzer said. “What do founders want to talk about over dinner when it comes to their business? It’s how we can help them sell minority stakes, raise capital and add firepower.”
--With assistance from Bruce Douglas.
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