In this article from PERE Credit, Dean Dulchinos, Managing Director and Head of Real Estate Credit, shares his outlook on interest rates, borrower headwinds, and mortgage real estate investment trusts.
Highlights from Dean:
- Dean believes declining rates will drive an increase in transaction volume. Additionally, the higher-for-longer rate outlook environment will make real estate debt one of the most compelling investment opportunities for 2025, he said.
- “There is a reasonable expectation that rates will normalize. But if rates remain higher than expected for longer, private real estate debt may come out ahead of real estate equity during 2025 as the clear winner for attractive risk-adjusted returns,” Dulchinos added.
- While borrowing costs will continue to moderate in 2025, that does not mean they will revert to pre-covid levels. “The opportunity to provide bridge loans to capitalize the recovery of value across all real estate sectors will be one of the financing structures most in demand,” he added.