Back in the Game: As lenders return, CRE financing options expand

Download Transcript

Spencer Levy
For the low down on lending, expertise on equity, and the critical role of credit for investing in commercial real estate, you've come to the right place. On this episode, we close the book on the 2026 CBRE Capital Market Symposium with all you need to know about debt. 

Ty Gerschick
There are a lot of different options out there today. It's a very competitive market, more so than it has been in the last couple years. 

Spencer Levy
That's Ty Gerschick, Head of Debt Capital Markets for CBRE Investment Management's Americas Direct Real Estate Platform. Ty and his team at CBREIM cover a book of roughly $15 billion overall with a transaction volume of just over $5 billion a year. 

Tom Burns
I think the banks have kind of figured out where their problems are and they're now on offense.

Spencer Levy
And that's Tom Burns, a CBRE Vice Chair in Debt and Structured Finance. Based in Dallas, Tom brings a wealth of banking and equity experience to a role he took on last year, coming over from Affinius Capital and before that a decade at Deutsche Bank, where he ran credit originations across the Midwest. Coming up: A primer on capital structure and finance, and a wealth of expert insights on the state of the debt capital markets. I'm Spencer Levy, and that's right now on The Weekly Take. 

Spencer Levy
Welcome to The Weekly Take, and I'm delighted to be back at the CBRE Capital Market Symposium with two of the leaders of the debt industry, including our own Tom Burns. Great to see you, Tom. 

Tom Burns
Thanks Spencer, good to be here. 

Spencer Levy
And then we have Ty Gerschick. Thanks for coming out. 

Ty Gerschick
Thanks for having me. 

Spencer Levy
So Tom, let's just do debt 101. Debt 101 is–most of our listeners of this show think about office, they think about retail, they think self storage, but they don't think about capital structure. So when you're looking at capital structure, there's equity, there's debt. What is it?

Tom Burns
So you can buy a building – let's just say an apartment building – you're going to buy it for a hundred million dollars. You could write a check for $100 million dollars and it's a hundred million dollars of equity. Or you can go get a mortgage on it. Let's just say you get a 60% mortgage, so you've got a $60 million mortgage loan. That loan is either going to be fixed or floating. The mortgage and the debt has a coupon. They don't get any upside. They just get paid back and they get their interest along the way. Equity side, if you bought that same building for $100 million and you put 60% debt and you've got 40% equity and let's just say you sell it for $120 million, the equity investor is able to reap the additional $20 million after he sold the asset. So the equity has upside, the debt has typically interest payments that they get paid along the way, and then they get their money back at the end, similar to a bond. 

Spencer Levy 
And it's also a downside protection if for whatever the reason the building underperforms, the building goes to the lender. 

Tom Burns
Correct. 

Spencer Levy
So speaking of the lender, Ty, you at CBRE IM being one of the largest investors in the world, you've got lots of choices, not only of lenders, but of structures. And so when you're looking at a deal, that same $100 million multifamily deal, and you've got Fannie and Freddie, in addition to banks, in addition to debt funds. How do you choose your capital structure? 

Ty Gerschick
Yeah, great time for this question because there are a lot of different options out there today. It's a very competitive market, more so than it has been in the last couple of years. And look, we are seeing bid sheets deeper and deeper with different names and some of these lenders will quote you a menu of options. They'll quote it three different ways. They have fixed rate debt. They have floating rate. They will put those together in any combination that you want. But at CBRE Investment Management, we are focused on trying to keep it simple. We don't want to go too high up the leverage curve because with that comes potential risk. We want to leave some cushion. But as Tom was talking about, debt is a tool to spread the investable equity out across multiple deals by bringing in the debt capital. So it is a very necessary and commonly utilized tool in our industry. 

Spencer Levy
It spreads the equity, but it also juices the returns – and sometimes significantly. 

Ty Gerschick
Significantly. But again, as Tom said, it's important to understand that we have the downside protection and so you can diversify over multiple deals in terms of what if things go wrong and get all of the upside, right? The lender's upside is capped despite, if you think about it, anything higher than a 50% LTV, the lender's going to have more money, more capital in the deal than you do as the investor. 

Spencer Levy
Without getting into the equity weeds too much. Are most of your deals standalone deals or are they pooled together? So if one deal does good another deal does bad it may impact the returns or people get their returns deal by deal. 

Ty Gerschick
Yeah, a little bit of everything that you mentioned. So for a closed-end value-add fund where the business plan is very targeted, typically the financing strategy needs to be just as targeted and offer some flexibility to exit or sell when it comes time. In those cases, we're typically doing single loans on single assets. We also have other strategies more targeted for open-ended funds where we cross-collateralize portfolios and get some efficiency of scale there. These are commonly stabilized, newer vintage assets, tend to be lower risk relative to some of our value add investments. And then the third piece is at the fund level, we will tap the private placement markets, issue bonds that are backed by the fund's balance sheet. It's a very efficient way to have a great deal of flexibility within the underlying portfolio. 

Spencer Levy 
So Tom, one of the things we said today, even though we're going to talk about the debt capital markets today, I think it's fair to just describe the equity capital markets getting better there as well. But because we're going to see a higher interest rate environment for longer – indefinitely may be the wrong word – people are going to have to change the way they run these deals. They're going to have to be making their money more from running the property than from hoping for lower exit cap rate or a magically lower cost of debt. Fair way to put it?

Tom Burns 
I'd like to jump in there because there's also an abundance of debt capital in the market. So we're seeing deals with developers right now – call it an industrial deal that we're recapitalizing right now – where the developer, when they built the project, their business plan was build, lease, sell. They struggled, the fundamentals were a little bit slow, Liberation Day caused some hiccups in the leasing market. They're seeing some leasing now, but we're able now to refinance them out. They're able to take out their existing debt and cash out and they're 35% leased on their product and then it's just buying additional time. They're still going to end up selling the asset but they're going to have an ability to get cash back to them and their partners kind of mid-business plan. 

Spencer Levy 
So, Ty, you cover all the asset classes and you cover everything from core to opportunistic kind of money?

Ty Gerschick
That's right. 

Spencer Levy
And so tell us a little bit about how the debt capital markets are different today than they were, say, a year ago in terms of where you're able to–how deep into the capital stack are you able to go on core, how deeply are you going on opportunistic, that sort of thing. 

Ty Gerschick
The year has been filled with change. I think the biggest part of that change is the banks returning to the market. We went through a couple of years in ‘22 and ‘23, early part of ‘24, where the banks were on the sidelines. Largely attributed to regulatory uncertainty, balance sheet issues, or perception of balance sheet issues that have now – not across the board, but on a lot of cases – been worked through. And you have a little bit more clarity on the regulatory side of things. So the banks are back in a meaningful way and really taking share back at present, whereas last year it was largely debt funds and life companies. I think the life companies have fallen away. The debt funds are still fairly competitive in terms of retaining their share because of the focus on some of those legacy deals where they're able to stretch farther and offer a better overall product. 

Spencer Levy
Let's dig into that.

Ty Gerschick
Sure.

Spencer Levy
And again, we're trying not to get wonky. But how deep into the capital stack can you realistically go today before it gets to be, you know, 10% plus money. 

Ty Gerschick 
It's all about cash flow today and so it's less a value question than it is–

Spencer Levy
Coverage. 

Ty Gerschick
–coverage. I think a lot of the debt funds are willing to stretch down to a 1-0 cover so long as there's a story behind it that that gets them to a better day down the road and they'll absolutely structure around that to get it done and in some cases sub 1-0 with again with with structure but you know for a life company for the agencies less ability to stretch that far right? They need more like a 125 DSCR going in. I think that's why you're still seeing that bifurcation between the debt funds as a source of capital versus some of the banks that are a little more conservative. 

Spencer Levy 
And just definitionally DSCR stands for Debt-Service Coverage Ratio. And what we're talking about here is, is it backwards looking cash flow or will some people be more aggressive and look forward looking? 

Ty Gerschick 
Yeah, everything's subject to negotiation, right? So it depends on the profile of the deal. Is it a lease up story? Is it, you know, a stabilized asset? I would say, historically speaking, it's more backward looking. 

Spencer Levy 
Historically, it's been backwards looking, but when the markets get aggressive, one man's 1.1 coverage is another man's 0.9 coverage, depending upon what you're looking at, right? So let's talk now, Tom, about the banks coming back. Well, we have the big money center banks, and then we have regionals. I think the biggest shift in the market in the last year and a half is the regionals coming back 

Tom Burns [00:09:51] 
Yeah, I totally agree with that. I mean, I think the bank market coming back this year is really in the last, you know–since I've gotten to CB, it's been tremendous with the banks kind of being back on the field. We did a construction loan on a deal and we had 15 regional banks do it. It was a $60 million loan 62%. We got the deal done in the low 200s over.

Spencer Levy 
Now, let's talk about this for a second. You clubbed that deal? With putting banks together?

Tom Burns
We clubbed that deal with two banks. Typically in Texas the banks want a whole plus or minus $40 million so these two banks ended up splitting the deal and it was two banks taking 30 apiece and got that deal like I said done in the low 200s, but we had a whole bunch of regional banks that showed up on that and some large money center banks also showing up on that. With the regulatory environment having clarity. I don't think I've heard a banker mention Basel 3 in 12 months plus, so I think that that has really kind of helped spur a lot of activity and I think the banks have figured out where their problems are and they're now on offense and going on the front foot. 

Ty Gerschick
Just to put a number on it, as of Q3 last year, bank origination volume was up 167% year-over-year. 

Spencer Levy
Wow. 

Ty Gerschick
So that tells you just the path of returning to the market. 

Spencer Levy
The bottom line is this, there's more regional bank money, there is more money center bank money. There's the debt funds and then of course we have the conduit lenders, and the conduit lenders are either putting several different let borrowers together at CMBS or single borrower, single asset. So Tom, big picture, just walk me through, you're with a borrower – not in multifamily where Fannie and Freddie is an option, outside of multifamily – how you rank your options and how you advise them where to go. 

Tom Burns 
It really depends on the borrower, right? If the borrower wants flexibility and wants low leverage, the bank pricing is going to be the best option for them. Life insurance is probably second to that if they want to go a little bit further up on the leverage scale. The debt fund markets are still very liquid and very active. And then if the asset, if they wanna hold the asset for five to 10 years, the CMBS market is a good place. In addition to that, last year CMBS volume was $125 billion, which was the highest it's been since 2007. The other thing, the single asset securitization market. Needs to exist because there are large, large transactions. Think of the New York office buildings or think of large shopping centers or malls that a life, you could try and club three life insurance companies together, but these transactions are billions and billions of dollars and they're just not enough liquidity with a number of these participants that wanna take four or $500 million tickets at a time. 

Spencer Levy [00:12:36] 
Tom, coming back to you for just a moment, walking through the continuum here. And again, this is not to belittle CMBS or SMBS, but it's fair to say it's less flexible. And if something goes wrong, it gets to be very difficult. And obviously the worst case scenario is what we saw, ‘07 through 2012. But walk me through a borrower. Let's say you got a conduit deal and the conduit lender is going to have a cost of debt that is lower than the other options available. How much lower does it have to be to say, you know what? This is the place to play. 

Tom Burns 
On just a regular-way conduit deal, usually where they end up deciding where they want to go with a conduit loan is when they actually need more leverage. And so the cost is usually actually a little bit more than what it would be on a life insurance, but a life insurance may cap out at 60 or 65%. And a conduit loan can go up to 70 or 75%. The pricing is going to be materially higher. But in some instances in today's market right now, we're refinancing a number of where clients had five-year debt coming due they bought it maybe close to peak and they need dollars to you know they don't want to have to write an equity check. So we're doing a handful of conduit loans right now in the market. We've got an office deal that we're refinancing right now where we're getting conduit loans. 

Spencer Levy 
Walk the listeners through – very big picture – going into a bank for a refi versus a new acquisition, how do they look at you differently? 

Ty Gerschick
Yeah, so if we're distinguishing between a new acquisition and a legacy deal, the legacy deal typically is going to be more constrained by coverage, right? The capitalization there is very different when the deal was struck let's say three years ago, then what that translates to today. Now part of that is the rapid rise, 2,000% increase in index rates. So very different interest rate environment and therefore the coverage. Absent some miraculous move in the NOI driven by revenue or expense contraction, which hasn't really happened in most sectors, you're going to have to come to the table with some additional equity to resize that loan. Now, the reality is, if you can do that from a bank's perspective, it's largely treated the same way, absent some other issue with the property itself. But they're very selective in terms of the sector type, market, location, right? Supply is scrutinized. The fundamentals generally scrutinize more than they have been historically. So it really, in all cases, has to check the right boxes. But that's true, refi or acquisition. 

Tom Burns
I think the lender side though, with an acquisition, the fresh equity is very, very powerful for a lender. 

Ty Gerschick
I'd say fresh equity and it's also likely to be a higher cap rate than what we were transacting on three years ago or so. So that translates to better coverage in and of itself. 

Spencer Levy 
Ty, talking about the various vehicles you work on today, when something hits your desk, let's say a multi-family deal, is Fannie and Freddie typically your first and second call and then you go to everybody else, how does that work? 

Ty Gerschick [00:15:39] 
For me personally, I don't put a heavy emphasis on Freddie and Fannie – strictly for multi or for residential, generally. They are, like others, a tool in the toolbox and oftentimes they are very competitive economically and otherwise. And so we have transacted through the agencies multiple times. But I think in the market today, it really pays to go broad, right? And really touch the banks, the life companies, even the debt funds just to see what's out there, because it's this constant churn of where these particular lenders are focused and it gets down to the sector level, the market level, the sponsorship level and you'll find a gem here and there taking that approach. 

Spencer Levy
Well, let's talk about finding that gem, Tom, because I want to hear for a moment, let’s just take that very same deal. Let's call it a $75 million multifamily deal, 95% lease, core deal, and you want to run a process. Tell our listeners, how you run this process, how you find that gem? 

Tom Burns
At CB, we've got a proprietary database of various lenders, both domestic and international capital, and we will create a package that basically summarizes the salient points of the deal and highlight the investment highlights of the deal and the property and the financials and everything. If it's a stabilized deal, it's relatively straightforward. If it's a bridge deal, there's maybe a little bit more that goes into the underwriting on that, and we'll take the deal out to plus or minus 50, 100, 150 different capital sources, and then we'll run a process. Most lenders are going to ask a dozen to two dozen questions. We're going to answer all those questions and get them up the curve. We're going to be on the phone with them. We're to talk to them through the asset, sell them on why this asset is as great as it is, and create a bid date. Usually give them plus or minus two to three weeks of time to kind of get through the asset. They're working on other deals at the same time. And then at that point, kind of pull together all the quotes and then share those with the client, understand what the client wants to do with respect to their business plan. Is it a long-term hold, is it a short-term hold? What do they want to do? And then we will typically create a best and final process and go back to the top three, have everyone sharpen their pencils a little bit, and see if we can kind of squeak out the best deal. And in some instances, it's not about economics. Maybe it's about prepayment flexibility, or maybe it can be anything. But we'll kind of work with the client to figure out and maximize the needs and the execution that they want to get. 

Spencer Levy] 
What about some of the mechanisms to improve the credit, such as a personal guarantee, guarantee from a third party? I know personal guarantees are tough when you're dealing with a fund client. But how do you deal with credit enhancement to try to get better pricing? 

Tom Burns
On the fund side, we've used letters of credit, which have been used in some instances. 

Spencer Levy
Explain to our listeners what a letter of credit is. 

Tom Burns
A letter of credit is a letter that a bank provides that says–let's just say, a five million dollar letter of credit from J.P. Morgan. That letter of the credit is assigned as collateral to the lender in the event–say, there's an office building and there's a big rollover in year three. If 50% of the building leaves the building, the letter of that credit then springs and that letter of credits is collateral for the lender. 

Spencer Levy 
At CBREIM, you do get involved in construction deals, and construction deals 100% of the time have some kind of guarantee behind it. How does an institution deal with that? 

Ty Gerschick
Yeah, I'd say completion guarantees are fairly standard. Interest and carry guarantees for capped or uncapped are fairly common. But otherwise, non-recourse generally is available. Where there is recourse involved as kind of that key to unlock the door for getting the deal done, it's typically capped at 25%. But a lot of that comes with the territory, especially this point in the cycle where lenders especially, they think about low risk, start to get a little a little shaky about the fundamentals and outcome 

Spencer Levy
But one other point I want to make here is that there are some deals you do directly, typically with core or separate account. The more core you get, the closer you do to doing it directly, but then as you go further up the risk spectrum, you typically have an operating partner. How do you typically divide the roles and responsibilities when it comes to getting a loan? Who's writing the guarantee? 

Ty Gerschick
Typically the obligation to stand behind the guarantee defaults to the general partner in a joint venture transaction. 

Spencer Levy
And that would be the operating partner, typically?

Ty Gerschick
Correct. So many times the venture agreements are structured such that if it is true recourse that's triggered by, just, the project didn't work, that there is a share of the responsibility there. But everything is negotiable and sometimes the GPs need to get those deals capitalized, including the LP equity coming in. So that's not universal, but it is the reality of some of those deals. 

Spencer Levy
Tom, let's talk a little bit more about your practice. And we've talked a little about individual assets. I know you handle portfolios. What if somebody comes to you with something else, some other type of request, if they want a line of credit or other types of debt instruments? 

Tom Burns
Yeah, I mean, we worked with a client who was looking for an aggregation facility actually for IOS and working with them to try and help them. Most IOS deals that are sub-$10 million. So to go and buy those and get a bank loan every time you do that is very, very cumbersome and challenging. And they're usually in different locations across the country, so getting an aggregation facility there helps them kind of scale their IOS pipeline and their existing IOS facilities that they already have. You can do it also with industrial. You can do with multi-family. There's agency–the agencies have facilities as well that our team has done, not me personally, but number of people at CB. So there’s a number where, once you get big enough and have scale, there's a lot of tools in the toolkit as Ty would say that you can go out and get that'll kind of make your life a little bit more efficient. 

Spencer Levy
Well, speaking of big and having scale, look who's sitting here, CBRE Investment Management. And so let me just ask just a procedural question. So recognizing that most of your assets are dealt with individually, do you guys use a line of credit to try to take assets down first and then finance after the fact? How does that work? 

Ty Gerschick
Yeah, we do. I'll tell you, two general categories of what we use for our closed end value add funds where the business plan is very much property specific and therefore the financing strategy tends to be property specific. We will typically use a subscription line to aggregate our acquisitions on a quarter by quarter basis. 

Spencer Levy
Let's back up for just a second. Define a subscription line for our listeners. 

Ty Gerschick
Yeah, so a subscription line or subscription-backed facility is really collateralized by the commitments of our LP investors into the fund. 

Spencer Levy
So let's say you have a fund that's a billion dollars. You may have a line that is collateralized by the promise of the LP to give you money. And do you get that at like 50% of that? 40%? What's the ratio? 

Ty Gerschick 
It really depends on the credit rating of the underlying LPs. For truly definitionally credit-rated LPs, the advance rate on that is typically 90% of their commitment. For other, what are referred to as designated investors – still very solid but more of a shadow rated by the lending institution – the advanced rate there is typically 65%. For us, primarily targeting at the moment institutional capital, it's really an effective tool for us. 

Spencer Levy
Many large institutions are expanding their capital base from not just institutions but also high net worth but also sometimes going deeper than that, going into 401k type money, going into non-accredited investors. What's IM doing? 

Ty Gerschick
Yeah, we're moving that direction. We see it as a longer term opportunity for growth for our platform. I think there's a lot of interest in diversification at those levels and access to what are typically private investment opportunities. We're still trying to find the right path to make that work at scale, but we've got a few irons in the fire, so to speak, and moving in that direction. So it's a focus for us going forward. 

Tom Burns
I think you're seeing a number of institutions, you know, Blackstone–I listened to a podcast with John Gray and he talked about the size of the sovereign wealth funds, the endowments and all the other various pension funds that provide capital to Blackstone. And the size of the accredited investor universe is I think 10-times the size all those guys added up and that's where most of the people are going. So the big institutions are moving in that direction because they're seeing the size and scale of that market is massive. 

Spencer Levy
Well, I think it's size and scale – and also governance. It's sort of like going back to the future, okay? Back in the good old days of real estate, you used to dial for dollars. You used to have country club capital and get 20 dentists and doctors and lawyers and they all bought a bunch of condos with you, right? Now, I'm not saying we're going back to that, but there's math here, right? The math is 10 to one ratio of the institutional capital versus the high net worth capital, but also the governance issue. I know many of my friends who have the opportunity to go institutional still prefer going high net or country club type capital because it's easier to manage than perhaps sometimes a one-on-one relationship with an institution. Is that part of the thinking? 

Ty Gerschick
It can be. It depends on the mechanism through which those high net worth folks are coming in, right? Sometimes coming in through aggregators, what you're describing in terms of the governance, the interactions, they can be just as–well, often are–just as or more thorough in terms of the oversight than some of our more institutional, traditionally speaking, clients. 

Spencer Levy
So we've been talking for a while here, Tom, and how do you see the next couple of years going? 

Tom Burns
Well, I signed a seven-year contract, so I'll be here for at least that long. But no, I think, look, we're seeing a number of really good things. Being at CB has been great. Sitting in with our multifamily team, our industrial team, our office team, you're seeing on the ground fundamentals improving right now. You're seeing it on the leasing front on industrial. You're see it on leasing from an office. Multifamily, you're starting to see concessions burn off in specific markets and starting to see some of the fundamentals improve. We're still not there yet. But I think that this year and next year in particular are going to be tremendous years for volume with respect to investing, financing, and I think the capital markets are cooperating with us. 

Spencer Levy
And if there is any one area you say, you know, I think this area is poised to be the next big thing? So I think the next big thing from last year was the regional banks coming back. Any part of the market that you say you know what, they're going to come back, too?

Tom Burns
The debt fund space right now is getting more and more competitive and there's literally, we get a new debt fund coming up in our office once a week. So I think what you're seeing there, and I saw it when I was at Affinius before I left it was, Oh, we want to be at 75% loan-to-cost on construction loans. Well, if you want to win the deal, you got to get to 80. So you're going to start seeing there's too much capital chasing too few deals. So you can start seeing folks stretch and probably reduce some of the credit metrics that they were kind of hanging their hat on two, three years ago, that they're going to try and push the envelope a little bit to try to get deals done. 

Spencer Levy 
And what are you seeing, Ty, in terms of the future? And then talk to me about how different types of debt may be coming back. 

Ty Gerschick 
Well, if I could take the last part first. Look, I think we are seeing opportunities for preferred equity in particular on some of these–

Spencer Levy
Opportunities for IM to provide the preferred equity?

Ty Gerschick
Yeah, so let me be clear. We do have the ability to issue debt through our various fund vehicles – everything, you know, pref equity, mezz, senior whole loans – so we have the ability and desire just given the setup right now. There's a little bit of concern around basis today, right? Is there more to come in terms of declines in values, and where is that going to come sector by sector.  Put differently, we like the basis at 80% more than we like it at 100%. In a lot of cases, again, focusing on those legacy deals. 

Spencer Levy
And talking about preferred equity, like the basis, what I think–I'm just going to use my terminology and please correct me here is that – and we've heard this term a lot now – if you can get equity type returns in a debt type vehicle, why wouldn't you do it? 

Ty Gerschick
That's right. I mean, you have priority. You have the second loss position, right? And you have a 20% – depending on where the last dollars cut – margin of error if you're wrong and things don't go the way we think they're going to go. 

Spencer Levy 
But that's a pretty competitive market. The cost of preferred has come in quite a bit in the last couple years. Particularly in the multi-space. But you're still playing in it because there's going to be special situations where your equity works 

Ty Gerschick 
Yeah, we're trying, but like you said, it is a very crowded category right now. 

Tom Burns
Very competitive space. 

Ty Gerschick 
Real Estate Alert puts out periodically a schedule, a table of the various players in the capital markets and their focus, and there are pages on pages on pages of institutional groups that have aspirations of doing preferred equity, mezz transactions. Frankly, like I said, through our fund vehicles, we have not done a lot of that historically. So we don't have the depth or track record that some of these other names have. That said, we have found a handful of opportunities that have made sense to transact on. 

Spencer Levy
And I think what we're talking about here is the reason why the space is so deep is because you have some people that that's all they do is preferred and mezz and then you have the traditional funds that can do it if the situation calls for so– 

Tom Burns
I mean, at Affinius we had a preferred equity vehicle and one of my last deals that I did before I joined CBRE was a ground-up multi-family deal right across from the Amgen campus in Thousand Oaks where we went up to 85% loan-to-cost. We had Bank of the Ozarks–

Spencer Levy
I'm sorry, you had to wonder what loan-to-cost? 

Tom Burns
Eighty-five percent loan-to-cost on that deal and it was great transaction across the street from Amgen's headquarters in Thousand Oaks, which has historically been a very, very challenging 

Spncer Levy
Is that California? 

Tom Burns
Yes, California. Very, very, challenging market to get entitlements in. And so we ended up doing that deal, but the preferred equity space is very, very crowded. There's a lot of players to Ty's point like Real Estate Alert has pages upon pages of people that'll do that. 

Spencer Levy
The more liquidity, the better. Now, I think that's probably going to hurt Ty's ears a little bit because I know he's competing with that equity every day. But from my perspective, the more equity, the better because we want this to be a vibrant, dynamic industry where lots of stuff can get done. And candidly, people have different risk reward appetites, but every deal in commercial real estate is different. 

Ty Gerschick
Part of what I love about the real estate industry. Every day is a little bit different. New challenges new puzzles. So it's been an interesting ride here the last couple of years to try and figure out some of these. 

Spencer Levy
I know I keep trying to wrap up the show, but we keep using these terms that I love and you used the term puzzle. We had Chris Decouffle on the show and he said, you know, retail is like assembling a puzzle because people realize that real estate today isn't about office or industrial or retail. It's about creating demand. That is what value is. And if it means you've got to expand your aperture to be in other asset classes as well, well then that's victory. Fair way to put it?

Ty Gerschick
Yeah, look, I think the value of real estate is in the demand of the people, right? If it's retail, it's a destination that people want to come to and spend money. If it is office, it’s a place where folks are excited to come to work every day. And you have to–I think, in the case you just described, control your own destiny to a degree to make that place, whatever sector it is, competitive with other properties in that market. 

Spencer Levy
And with that, I want to thank my two terrific guests today. Tom Burns, Vice Chairman, CBRE Debt and Structure Finance. Great to see you. 

Tom Burns
Thank you, Spencer. Appreciate it. 

Spencer Levy
And then Ty Gerschick, the head of Debt Capital Market, CBREIM, otherwise known as CBRE Investment Management. Thank you so much for coming out here today. Terrific job. 

Ty Gerschick 
Is this where I say like, comment, and subscribe?

Spencer Levy
I won't stop you. Thank you for joining The Weekly Take. 

Tom Burns
Thanks, Spencer. 

Spencer Levy 
With thanks to our guests and the organizers of the annual CBRE Capital Market Symposium, here's to all the expert insights we were privileged to learn from. If you've missed any of our Weekly Take programming from the event, you could find it on our website, CBRE.com/TheWeeklyTake, or in the archives of any podcast platform where you find the show. So check that out, and if you like what we do, remember to subscribe for updates and information about what's coming up on the show. For now, thanks for joining us. I'm Spencer Levy. Be smart. Be safe. Be well.