Kwasi Benneh

Kwasi Benneh.

Kwasi Benneh

Managing Director, Head of Large Loan Origination and Syndication at Morgan Stanley

Kwasi Benneh
By November 9, 2020 9:00 AM

What’s been the biggest market lesson learned during COVID?

In recent times, the risk of a global pandemic and the associated impact on commercial real estate assets was rarely contemplated, if ever, in the normal course of assessing asset valuations and credit risks inherent in lending transactions. The consideration of macro risks that result in the inability of a borrower to generate cash flow from a commercial real estate asset is here to stay as a result of COVID. Participants in the real estate asset-backed lending market will have to embed innovative structures in deals going forward to account for this risk.

Are you bullish on New York City? If yes, why?

Yes. Anyone who has lived, worked, or traveled in New York City knows it’s impossible to replicate the city anywhere else.

What’s key to New York’s rebound and recovery?

The economic activity generated in New York has always been greater than the sum of its parts. That aspect of New York is why the city keeps bouncing back after what is always deemed fatal in the throes of previous crises. An environment that is conducive to a restart of normal economic activity, from a health and safety perspective, is key to add to the city’s long track record of rebounds. There is a pent-up demand for what the city offers. The supply side of that equation needs a combination of policy, science and leadership.

How are you winning deals for which you’re competing most aggressively today?

The most important lever for our lending business is our deep relationships. Especially in times like these, the trust between a borrower and lender supersedes the likely diminishing returns of the extra dollar, basis point or incremental structure (or lack thereof).

Any interesting anecdotes about a remote closing experience?

Preparing a contingency plan for members of our team to drive signature pages around in their personal cars was surreal but definitely a sign of the times.

What strengths do traditional lenders and non-traditional lenders bring to the market today?

The CRE lending market needs a healthy mix of traditional and non-traditional lenders. As the market evolves, there has been a blurring of the lines between these two segments of the market. Notwithstanding this development, the natural life cycle of a typical CRE project lends itself to the most efficient financing from either segment. For the same reason that a technology startup doesn’t try to access the bond market for capital, traditional and non-traditional CRE lenders play very important roles at various stages of a CRE investment. The symbiotic relationship between these lenders renders the question of who is stronger post-COVID moot.

How has your underwriting changed post-COVID?

Our fundamental underwriting of real estate credit has not changed. There are new risks, given COVID, which we now incorporate into our analysis. General underwriting will be tweaked to withstand more stress tests than usual as a result of COVID, but the emphasis on underwriting and asset management will continue to be of equal importance.

Do you feel urban living is dissipating as a result of COVID-19? Why or why not?

I think the narrative of urban flight is exaggerated. Cities were built around deep-rooted societal inclinations and necessities. There are always temporary disruptions in urban life, such as we are observing during COVID, but the draw for people to settle in cities where they can work, live, and play always tips the scale.

Biggest overlooked market opportunity today?

Definitely “talking my book” on this one, but I believe there are not enough market participants providing mezzanine capital in the mid-to-high single-digit yields.

“When I’m not doing deals while working from home, you’ll find me…” 

“…obsessively surfing streaming platforms for the new ‘it’ TV show.”

Lightning Round:

Favorite TV show you binged during quarantine? 

“Defending Jacob.”

Have you eaten inside a restaurant post-COVID, and if so which one? 

Not yet.

Where is your COVID hideaway?

Leafy New Jersey.

Number of haircuts in past six months – family trim or professional?

I barely have hair.

Dream Zoom happy hour date?

Founder of Zoom.

Home office or actual office?

Actual office.

Have you been on a plane post-COVID? If so, where did you go? If not, where will you fly first?

No. Hopefully somewhere warm in the winter.

Best book you read during COVID?

I always wait for the movie.

Which will rebound first: retail or hospitality?


Favorite post-COVID secondary market from a lending perspective? 

Orlando – home of the [National Basketball Association] bubble.

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