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Over the past couple of weeks, numerous lenders and capital sources have left the CRE market.

Newly formed Electra Capital, an alternative lender specializing in flexible, short-term multifamily financing solutions, is still active. Just this week, the firm announced the closing on a preferred equity investment in Stonebridge at City Park Apartments, a 240-unit garden-style apartment community located in the southwest section of Houston, Texas. It is also on pace to close another deal very shortly. "Our money comes from a fund that was raised with fairly high-net-worth individuals and institutions from Israel," says Sam Greenblatt, CEO of Electra Capital.

Since Electra is still in the market, Greenblatt has been fielding calls from many borrowers. "We have a lot of inquiries from existing clients and existing intermediaries," he says. "Then, we have some calls coming from people that lost their commitments from lenders and are not able to move ahead with their transaction because of the circumstances."

Greenblatt says he always applies a high level of scrutiny to transactions but acknowledges that high leverage deals are going to meet more resistance in a recessionary environment.

"I think these very highly leveraged deals where someone put in 10% equity and is looking for an institution to put in 90%, aren't getting done," Greenblatt says. "I think most senior lenders are looking at a 75% maximum of the total project cost." Greenblatt says Electra can go up to 75% of the equity, but the deal has to be right. "If we're going to do that, it's going to be for a very, very big deal where we feel comfortable with the sponsor, submarket and the asset itself," he says.

Electra decided to focus on multifamily assets, primarily in the Sun Belt, because that's where its affiliated company, American Landmark operates. Greenblatt thinks apartments are best positioned to weather the COVID-19 storm, especially if the $2 trillion stimulus bill passes the House of Representatives.

"It's certainly going to help people navigate continuing to pay the rent," he says. Greenblatt is realistic and hopes things return to normal in 60 to 90 days. From a business perspective, he's looking at areas that already weathered the virus as a guide. "I'm looking at the countries where the curve has bended, countries like China, Singapore and South Korea," he says. "Now that they're opening up those countries, has the virus come back, or have they been able to eradicate the virus?"

If the virus comes roaring back in those areas, Greenblatt says the financial situation could remain dire until a vaccine is developed. "A situation with people being out of work for greater than four months would ultimately hurt their ability to pay rent," he says.