The capital markets outlook for 2018 is positive, thanks to increased activity at the end of the year. Another good indicator: new private capital entering the market. With banks constrained by regulations, more and more private lenders are stepping to up to fulfill investor needs. While these capital sources are unregulated, Shlomi Ronen, managing principal at Dekel Capital, says that underwriting standards are remaining conservative, and there is no cause for concern. We sat down with Ronen to ask him about him 2018 outlook, the activity from private lenders and what asset classes will be in the highest demand next year.

GlobeSt.com: What is your outlook for the capital markets in 2018?

Ronen: I think that we are going to see continued strength in liquidity on the debt side. There are big picture fundamental changes that we are seeing, and those include more private capital coming into the debt side and picking up where the banks are receding or staying flat. What we are not hearing from banks is that they are targeting 10% more production next year. Instead, we are hearing that they have a certain amount allocated to real estate, and they will probably do the same next year. As deal volume continues to grow into next year, we are seeing more private capital come into the space and fund the needs of investors and developers. On the equity side, it is going to be tough for a while for the institutional groups that have raised high-octane capital to find good risk adjusted returns. You can always manipulate your way to a high teens mid-20s IRR, but given the amount of capital in the market, the yields on the deals that used to be in the opportunistic, value-add space are much lower. The groups that have capital that is willing to take more risk for less returns are going to more active.