Jaime Zadra

Describe the past 12 months in one word, then expand on your choice.

Unpredictable. The rise in rates has created obvious challenges. Just when it seemed yields had leveled off and settled, there was a big increase. Investor sentiment has been fluid throughout the last year with a general sense that yields would start to fall at the end of 2023 and early 2024, only to see that shift in recent weeks to a prevalent “high for longer” sentiment. As we have seen in the last few weeks, investor sentiment has flip-flopped a couple of times. That volatility has kept things unpredictable and challenging at the same time. 

Tell us about a recently closed deal you’re proud of, and its biggest challenges/high points.

We recently closed a $25.9 million mezzanine construction loan on a cold-storage property in Houston. This represents expanded capabilities for our debt platform, which has capital available for structured opportunities. Many in the market think of PGIM Real Estate as a core player, which we are, but we offer more than that through our core-plus, structured and agency platforms. This investment is a great example of what we are capable of in the non-core space. 

What are/aren’t you lending on today, and what’s changed in your loan terms?

Currently, we are lending on all property types, but find office to be challenging.

Has certain lenders’ retrenchment been beneficial to your pipeline? Discuss. 

Yes. This has been the year of the refinance given the limited sales activity. As a private lender, PGIM Real Estate has benefited from having ample capital from investors and a broad pullback from the banks.

What’s your approach when it comes to loan extension requests? 

We evaluate every loan modification request based on the specifics of the deal. There is no set policy, as every transaction is different. Generally, we are looking for the borrower to show commitment to the asset by offering fresh capital as a tradeoff for an extension, and the rate would be reset to a market level.

 Will rate stability calm market volatility, or is that wishful thinking?  

Predictability is paramount to transactions. With the large swings in Treasury yields, it has made quoting deals more challenging; one day we are at said loan amount, and the next day proceeds could be down by 5 percent. It may be wishful thinking, but rate stability should calm market volatility.

What scares the bejesus out of you in today’s market? 

The low utilization of office space broadly in the U.S. Office is in a recession, and it will take years to work through the challenges in that sector, given the paradigm shift by office users.  

If you had five minutes with Jerome Powell, what would you say?

Be measured in your approach. Rates have risen a significant amount in a very short period of time, and the effects are still making their way through the system.

Lightning Round:

Multifamily or Industrial?

Multifamily.

Taylor Swift or Beyoncé?

Beyoncé.

‘Ride or dies’ only (relationship borrowers) or taking on new borrowers?

Both. We always need to service our relationship borrowers, but now is a great time for us to establish new relationships when other lenders are on the sidelines.

Vacay time: Mountains or beach?

Beach.

Complete this sentence: If I weren’t a lender, I’d be a…

Travel consultant with a focus on local food.