LOS ANGELES— During a recent panel discussion featuring institutional investors at the GlobeSt. Multifamily Fall Conference here last week, the conversation turned to their current investment strategies. Robin Potts, a partner and the Chief Investment Officer at Canyon Partners Real Estate LLC, revealed that her company has been quite active in the debt market lately. In contrast, their involvement on the equity side has been minimal this year, aligning with broader industry trends. She explained, "We've observed banks reducing their leverage levels by anywhere from 15% to 25%, a significant shift. Consequently, we are focusing more on debt-related opportunities."

The conversation also moved into what some of the challenges facing the office sector are today and the potential repercussions for the broader market and multifamily investments. Stanley Iezman, Chairman and CEO of American Realty Advisors, expressed deep concern, labeling the situation as an existential risk within the marketplace. 

Iezman anticipated widespread devaluation of office properties, primarily due to a looming wave of property maturities. He also emphasized that investor uncertainty is currently the most substantial threat to the market, stating, "Investors are likely to prioritize safe, high-yield treasury investments over real estate. Our industry relies heavily on institutional capital, and I'm apprehensive that debt will take precedence over equity for a significant period."