Business Breakdowns

Alternative Lending in Real Estate - [Business Breakdowns, EP.195]

112 snips
Dec 11, 2024
Josh Zegen, co-founder and managing principal of Madison Realty Capital, dives into the fascinating world of commercial real estate lending. He shares insights on the evolution from hard money lending to a comprehensive capital provider with over $21 billion in assets. Josh discusses how recent market dynamics, post-COVID interest rates, and innovative financing methods are reshaping the landscape. From managing borrower defaults to the contrasting performance of various real estate sectors, this conversation uncovers the complexity and opportunities in today’s lending market.
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ANECDOTE

Career Shift

  • Josh Zegen started his career in investment banking but transitioned to real estate.
  • He initially launched a residential mortgage brokerage firm, which exposed him to commercial lending opportunities.
INSIGHT

Madison's Founding

  • Madison Realty Capital was founded in 2004, focusing on hard money loans.
  • This lending niche catered to clients needing quick financing, often due to last-minute issues.
INSIGHT

Post-Crisis Opportunity

  • The 2008 financial crisis reshaped banking regulations, limiting their higher-risk lending activities.
  • This created an opportunity for private credit lenders like Madison to step in and provide construction loans and other specialized financing.
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