What other solutions could be available? We will see different kinds of restructurings of the property portfolios, restructuring of the financing by replacing part of the senior loans by new equity, mezzanine and profit participation loan instruments. No major amount of new equity is, however, likely to come into these structures from new investors. Assuming that the current equity investors do not have the capacity to substantially increase their investments, the senior lenders will play a major role in restructuring the current financing. Key drivers for financial restructurings would, hence, be dependent on the senior lenders´ need to decrease their exposure on current property financing and get healthier loan-to-value ratios for current lending in order to be able to use their balance sheet and equity efficiently for new financing opportunities.

We will most likely see new property funds and other SPV-structures taking care of distressed portfolios and financing. We might also face new players buying the current loans giving the lenders a better capacity to expand on new businesses. Whatever the solutions will be, the property and finance market will certainly need new and creative structures and players. This gives us the opportunity to assist our clients in adding value to their business.