2024 Fall Issue of Urban Land - 106
Opportunistic Funds
Take Aim at Looming
Distress
ULI Conversation with Scott Rechler
of RXR
BETH MATTSON-TEIG
Loan maturities totaling more than
$1 trillion loom over the commercial
real estate market " like a hurricane
off the coast " of the United States.
As interest rates stay higher longer,
that hurricane will gain more and
more strength.
RXR CEO and Chairman Scott
Rechler used this metaphor during
a recent ULI-members-only webinar
conversation with former ULI Foundation
Chair Faron A. Hill to describe
the challenges-and opportunities-
ahead. " That hurricane . . . eventually,
it's going to hit land, " Rechler says.
" The question is when it hits, how
hard it hits, and where it hits the
hardest. "
Yet the storm brewing is not like
what occurred during the 2008
Great Financial Crisis, wherein distress
was resolved relatively quickly
in a falling rate environment and
significant injection of liquidity. Loan
maturities could hover over the
market longer, so when and where
they do hit, more damage could be
done, Rechler notes.
The collateral damage could
include investors, developers, and
lenders, particularly regional banks
with bigger commercial real estate
exposure. However, Rechler believes
the current market dynamics present
a once-in-a-generation investing
opportunity.
RXR is a New York-based, fully
integrated real estate company
with more than $18 billion in assets
under management. Rechler is currently
serving a three-year term as
an elected member of the Board
of Directors of the Federal Reserve
Bank of New York. From 2011 to
2016, he served on the Board of
Commissioners as vice chairman for
the Port Authority of New York and
New Jersey.
Faron A. Hill: You've compared the
loan maturities to a hurricane gaining
more power offshore before it hits.
Getting through this storm means
there has to be some give on either
Former ULI Foundation Chair Faron A. Hill
RXR Chairman & CEO Scott Rechler
106
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2024 Fall Issue of Urban Land
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