Bloomberg reported that sellers are stepping up efforts to entice buyers before plummeting property values force them to accept deeper discounts. Direct loans eliminate the need for buyers to find outside financing, and enable sellers to offload potentially troublesome assets more quickly while reducing their exposure to commercial real estate. With fewer lenders willing to provide real estate loans, it means less liquidity across the sector, which will push up rates even more for borrowers. “Real estate is a levered business by definition, so if you have fewer sources of capital providing direct property loans, that means less credit available and higher costs of capital,” said Josh Zegen, co-founder of Madison Realty Capital.

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