Kyle Jeffers
Chief investment officer at ACORE Capital
Difficult market conditions ensue, but for some savvy L.A. lenders it’s a case of “keep palm and carry on.”
Acore Capital is one such firm.
Kyle Jeffers sits amid the palms of L.A. An active lender from coast to coast, Acore has seen its loan portfolio’s composition shift over the course of the past year.
“Construction opportunities have been robust, and we’re finding really good risk-adjusted returns for our clients and our investors there,” Jeffers said.
Historically, around 25 percent of Acore’s pipeline was construction requests. “Today, that number is 50 percent, maybe even greater — so we’ve seen a lot of new construction opportunities come in. Previously, those requests would be for hotels, maybe some office buildings, but now it’s multifamily and industrial. Those two sectors have remained fairly healthy.”
Additionally, Acore recently provided an $88.2 million refinance on its own construction loan on Adams & Grand, a new multifamily property near Downtown L.A.
In addition to its ability to lend throughout cycles, a key competitive advantage for Acore in this hairy market environment is its asset management arm.
“I think it’s been unbelievably critical,” Jeffers said. “Risk management is really the root of everything we do. We start with property-level risk management from an asset management perspective, then we have loan surveillance, which gives us more market data, which then helps develop our investment strategy.”
The asset management team sits in Dallas but informs Acore’s investment decisions nationwide, in addition to helping strengthen and deepen borrower relationships.
Jeffers said while there is plenty of market uncertainty at the moment, rate stabilization should help trsmsaction volumes rebound a wee bit.
“Then, you can start to figure out the correct values of real estate, and transact around that,” he said, adding that the upcoming loan vintage for lenders will be “excellent.”
“There’s a lot of dry powder on the private equity side —which is typically our clients — to buy commercial real estate,” Jeffers said. “I think there’ll be a lot of value-add buyers coming into the space that have dry powder and want to transact. We think the pent-up demand will lead to 2024 and 2025 being some of the best opportunities we’ve seen in the lending space in a while. So we’re really excited about the future.”
