Two investment groups have formed a joint venture concerning originating loans of $5 million to $15 million against a variety of asset types across the United States. Carlyle Group and Canopy Investment Advisors LLC both already have a history of investing in commercial real estate debt.
Importantly, the venture hopes to focus in on assets said not to be fully stabilized with loan periods of two to five years. Officers for both companies see promise in commercial real estate loans. "Financing for small balance commercial real estate loans represents an undercapitalized opportunity in the current market," says one of the venture's managing directors.
We sometimes do not realize how much of investment funds in commercial real estate are committed to debt investments. Of the $8 billion that Carlyle has invested in commercial real estate across the country, around $1.5 billion has been aimed at debt investments. Canopy has also structured more than $3.5 billion in commercial real estate debt over the past eight years.
Unfortunately, in a volatile real estate market lawsuits are bound to arise. Though that two major players see opportunity in someone unstable assets, the downside is that loans can go quickly bad. Even a $5 million to $15 million debt owed can be significant for most businesses.
Commercial collection attorneys can track down assets when money is owed. These attorneys will reduce the risk for businesses that wish to investment in real estate debt. Though creditors will often win against debtors in real estate lawsuits, winning alone means little if one cannot collect upon the judgment.
Source: Globest.com, "Carlyle, Canopy JV On CRE Debt Platform," Oct. 4, 2013