However, it had all the right characteristics – great sponsorship, solid real estate in a rebounding rental market, and a distressed trade at a significant discount to replacement cost. Therefore financing was isolated as the primary hurdle to closing, and our pursuit revealed interesting points about capital market idiosyncrasies – this month. Ultimately, we are encouraged that, (provided the last 4-5 months of relative stability persist), we're increasingly able to predict attitudes and locate able sources; sooner than later that will translate into closings.
Liquidity Exists
First, let it be known that liquidity does exist. The capital markets are evolving rapidly, with players entering and exiting weekly. The market is highly inefficient, and locating capital demands a lot of ground work. Those with real capacity and discretion are few and far between; most are only pretending to be active to protect their brand. But the truth is revealed when the best opportunities are presented – and excuses are eliminated. In this way, the real players are starting to surface. A select group of lenders and institutional equity investors do indeed have capital; what's more, they want to deploy it.
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