Amy Price and Sonny Kalsi
President; co-CEO at BentallGreenOak
Sonny Kalsi and Amy Price know a few things about distress.
The pair, who have been working together, on and off, since they met at Morgan Stanley some 30 years ago, travel the world to look for investment opportunities.
These days there’s no shortage of properties in debt that need to be refinanced in order to stay afloat. BentallGreenOak, which has $83 billion under management, focuses on debt solutions in North America, Asia and Western Europe. Last year it raised about $8 billion in new capital.
“Markets like this are what make the work interesting,” Price said. “We’ve been in this period of rising tides raising all boats. Now it’s a lot more complicated but it’s a lot more fun — figuring out where you have convictions and being smart about what you do and don’t do.”
Much of that debt has been tied up in office space in gateway cities like New York, San Francisco, Washington, D.C., and Seattle where hybrid work is still common and office vacancies are plentiful. Construction loans are also getting more expensive and harder to obtain.
BentallGreenOak has been able to underwrite some of the risk, but it’s been challenging. “People say, ‘Are you going to buy a loan on an office building for 50 cents on the dollar?’ That is a strategy, but you can take advantage of this,” Kalsi said. “We had a highly motivated seller and they sold at a price down 20 percent less than it would have been.”
The industrial sector has provided ample opportunities, too. In February, BentallGreenOak sold the fee interest on a distressed office property in Long Island City, Queens, with the aim of converting it into a last-mile industrial space.
They’ve become more active in developing cold storage as well, which is expected to expand over the course of the decade. And they’ve also chased deals in Sun Belt cities where people have been migrating over the past five years and where there is also access to a blue-collar workforce. Storage sites are another growth area for the company.
“You either have port-anchored industrial, intermodal, or you have last-mile, and we see a lot of strength in all of that,” Price said. “E-commerce penetration rates aren’t yet what they will be.
