NEW YORK CITY-A repricing of assets will be necessary to return liquidity to the system, and the pricing change will have to come from the capital markets. So said Richard J. Mack, partner with Apollo Real Estate Advisors, at yesterday¹s breakfast presentation sponsored by the Real Estate Lenders Association and held at Club 101.

“We’re sitting on the sidelines in the equity business, and I think that is the most telling sign” of how Apollo views current market conditions, Mack said. He noted that out of $3.2 trillion of debt outstanding in commercial real estate, 10% is mezzanine and 25% of the mezz debt, or approximately $77.5 billion, will mature each year.

Mack, who’s responsible for new investments and investment management at Apollo, aligned himself with those who believe “things are going to get worse before they get better.” He added, however, that this presents many opportunities for lenders to make prudent loans with equally prudent spreads.

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