FICC Focus
Leste’s Gennari Is Leaning Into Real Estate Credit: FICC Special
Mar 31, 2025
Ricardo Gennari, managing director and head of US Real Estate Credit at Leste Group, dives into the evolving landscape of real estate private credit. He discusses how rising interest rates are reshaping lending strategies and the need for liquidity maintenance. Gennari highlights the burgeoning investments in data centers and the importance of energy supply in this sector. With consolidation trends in the private credit industry, he sheds light on opportunities for niche players amidst economic challenges, making a compelling case for intelligent investment strategies.
20:29
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Quick takeaways
- The ongoing high interest rates are reshaping the real estate sector by increasing development costs and altering property valuations.
- Leste Group's strategy of focusing on niche asset classes, such as data centers, allows them to effectively meet the refinancing needs of the market.
Deep dives
Interest Rates and Real Estate Valuations
US interest rates are expected to remain elevated for a longer duration than initially anticipated, significantly impacting the real estate sector. High interest rates can make new real estate developments more expensive, leading to increased valuations for existing properties. Potential tariffs and fiscal policies from the new administration may exacerbate inflationary pressures, influencing construction costs. While some policies could stimulate growth, the overall sentiment remains cautious as the real estate market adjusts to these economic shifts.
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