FICC Focus FICC Special: A Primer on Property Lending With Varde's Dunbar
Sep 1, 2025
Jim Dunbar, Partner and Head of Real Estate Lending at Varde Partners, shares insights into the evolving world of property lending. He discusses how navigating the affordability crisis reveals both challenges and opportunities in the commercial real estate sector. Dunbar emphasizes the importance of flexible capital and strategic advantages, like owning a mortgage servicing company. He also explores the divergent trends between the Sunbelt and gateway markets, shedding light on unique investment strategies in non-traditional real estate sectors.
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Affordability Keeps Rental Demand Elevated
- The affordability gap ensures continued rental demand, though local supply affects rents.
- Multifamily supply in some cities has pushed rents down, especially at lower income thresholds.
Refinancing Wave Opens Market Share
- About $2.5 trillion of CRE loans mature through 2027, creating a large refinancing wave.
- Regional banks hold ~ $1.5 trillion and their pullback opens lending share to non-bank capital.
Office Stands Apart From Other Sectors
- Office is uniquely distressed because values fell more and demand collapsed after the pandemic.
- Office lenders effectively own many buildings, which slows institutional capital flow into new loans.