Jason Hernandez

Jason Hernandez.

Jason Hernandez

Head of U.S. Debt at Nuveen Real Estate

Jason Hernandez
By November 10, 2023 9:00 AM

What are the key lending opportunities you see as we round out 2021?

We bifurcate the real estate credit space into shorter duration opportunities, which we access through our structured finance business, and longer duration opportunities that we access through our core, fixed-rate business. On the structured finance side, office and alternatives (primarily life sciences and manufactured housing communities) have been key lending opportunities in 2021, which we expect to continue in 2022. Fifty-six percent of our structured finance investments in 2021 were in the office and alternatives space, where we have been able to earn incremental spread due to less liquidity on the office side and expect better tailwinds in the alternative sectors. 

Conversely, in our core fixed-rate business, office only represents 1.5 percent of our 2021 investment activity. Clearly, there is uncertainty around the future of office and we are not looking to make long-term, macro bets on the sector, but with shorter duration, we can take advantage of short-term illiquidity to earn incremental spread for our investors.

What’s the one thing you wish you’d known in March 2020 that you know now?

In March 2020, we did not know if the health crisis — which led to an immediate liquidity crisis — would morph into a full-blown credit crisis, the latter implying a wholesale repricing of risk. With hindsight, it feels like a liquidity crisis that has varied across both property types and markets.  During the [global financial crisis], risk was re-priced fairly equally across all property types, with the recovery also fairly evenly distributed, but during COVID the recovery has been more uneven. Liquidity rebounded rather quickly, first in industrial and then in the multifamily sector. We also saw a bifurcation in favor of suburban versus urban core.

In hindsight, if we knew it was just a liquidity versus credit crisis, we would have been much more active in March to June 2020. The handful of positions we took during this time frame turned out to be some of our best over the last 18 months. On the bright side, we have learned from this experience and have been much more active on the office side over the last nine to 12 months to take advantage of the illiquidity in that sector.

Where are you seeing the most competition for deals today? What’s the greatest weapon in your bidding arsenal? 

Beds and sheds (multifamily and industrial) are the two most in-demand properties across both debt and equity causing yields to compress below pre-COVID levels. On the structured finance side, our greatest weapon is our ability to finance our positions efficiently, which allows us to bid more competitively on the whole loan. Our greatest weapon on the fixed-rate core side is our track record of executing on large portfolio trades. Given the bite-size nature of individual industrial properties, it is difficult to aggregate. We have a team that is built to analyze large, diverse, complex positions and can utilize our balance sheet to execute on large ($500 million-plus) industrial portfolios under tight time frames. 

New York City: “I want to be a part of it”? 

People can talk and speculate all day long about the “death of New York.” However, people generally vote with their feet. I live in New York City, I am raising my two daughters in New York City. I love coming into the office every day in New York City. In the immortal words of [American sports agent] Drew Rosenhaus …. “next question!”

What’s your favorite secondary market and why? 

Austin is a market we have liked for a long time and have been fairly active in. We like the growth in economic activity (Tesla, Apple, etc.), the relative affordability/cost of living and favorable business environment. We have been active across multifamily, office and retail throughout the Austin market. It is probably the only market nationwide where we have added exposure across all property types over the last few years. We particularly like the South Congress micro-market, and feel that it is probably the best office and retail area in an overall very attractive market. We are always looking to increase our exposure to Austin. Plus, you can’t beat the food scene!


Are you adding life sciences deals to your loan portfolio? Why or why not?

Yes, we have added approximately $600 million (10 percent of our 2021 investment activity) to our life sciences exposure. In general, we are bullish on the alternative sectors, including life sciences, due to the more favorable tailwinds they present versus the traditional property types. While we are adding to our life sciences exposure, we are doing so very selectively and generally pursuing transactions with best-in-class sponsors and in well-established life sciences clusters. We are also active in the life sciences sector on the equity side, which benefits our debt business.

How prominent do you envision C-PACE financing becoming? Is it here to stay? 

With New York City’s Local Law 97, specifically, and the greater emphasis on impact investing more broadly, we do believe C-PACE has a prominent role to play in CRE lending. Nuveen recently purchased Greenworks Lending, a pioneer in the development of C-PACE financing, to increase our exposure and broaden our product offering. Historically, there has been minimal overlap between C-PACE and our traditional core and structured finance lending businesses. However, Greenworks is a business that we are looking to scale and we are evaluating ways to work together and leverage the broader Nuveen CRE lending platform.

Lighting Round

Stabilized or transitional assets? 

Long-term commitment is always tougher, so transitional for sure!

Fast-food guilty pleasure? 

Popeyes’ Spicy Chicken Sandwich — not even close! 

Peloton bike or outdoor cycling? 

Peloton, because the competitive dynamic created by being able to see other people’s workouts enhances both the frequency and overall quality of trash talk amongst colleagues/competitors/borrowers, etc.

Last book you read?

“Dune,” by Frank Herbert.

Who would play you in the biopic of your life? 

I would want it to be a Latin actor so my first choice is Oscar Isaac. He is probably too handsome, so maybe Luis Guzman!

“If I hadn’t pursued a lending career I’d be …” 

Twenty years ago, I applied to three business schools and the CIA Clandestine