Joseph Meerbaum, Lionsgate Finance

Welcome to Lender Lens, our series for profiling leaders in the Lender community.

With private credit playing an increasingly important role in the financial system, we wanted to find out how lenders are navigating the evolving landscape and how they assess the market in the coming years.

The private equity industry is optimistic that 2025 is the year that the M&A floodgates will finally open. Likewise, private equity lending activity, particularly private credit, is expected to see a significant uptick in the coming months. Of course, all of this will depend on what happens with interest rates, whether inflation soars and what type of impact the Trump administration’s tariffs will have.

Commercial real estate has struggled in recent years, but the sector saw a bit of an uptick at the end of 2024. What is your personal outlook for CRE for the next 1-3 years?

Stubborn interest rates have led to a 4% loss in commercial real estate since 2019. Typically, commercial real estate is a leveraged asset, so if you have an 18% decline in value that can mean of an equity loss of 40% to 60% and I don’t think interest rates will be coming down anytime soon. While there’s talk about the president trying to help the economy grow, he’s got other policies he’s trying to place, like tariffs, which may, in the short run, be inflationary. So, commercial real estate –multifamily, office, industrial and so on, could possibly bottom out by the second half of 2025. It all depends on interest rates. 

How do you differentiate your organization in a competitive landscape?

I am an independent real estate advisor (a.k.a. a commercial mortgage broker) and that means I’m not proprietary. When you go into your local bank, if there’s a better fit or a better type of loan program from the bank across the street or another part of the country, they’re not going to call you up and tell you. But I work for the borrower, and my job is to keep tabs on what all the lenders at any given time are offering for a specific project and all that it entails. I line up the banks that specialize in the particular financing type a borrower needs. 

Talk to us about a recent deal you did that stood out. What made it unique?

I was contacted by a European Real Estate Fund that had purchased an investment condo within a luxury project in Miami. They bought an apartment for $5.5 million in November, with plans to invest another $500,000 to fix it up. What was unique about the transaction was that there were no American citizens who were principals of this firm. It was 100% offshore investors based in Lichtenstein, who had an LLC based in Delaware used to purchase the property. They were trying to get half the money through a loan and were planning to use cash for the rest. But right before they closed, their lender, who had issued a term sheet in Miami, wouldn’t close because there were no American citizens involved in the deal and no guarantor. So, they had to scramble to get a bridge loan. They were expecting a quick flip, but it didn’t materialize. The initial expectation, based on the appraisal done in January, was that they could flip the property for around $7.5 million. But by August, when they ultimately closed on the property, market volatility pulled back the value to $6 million. We needed a non-recourse loan for a project that didn’t fit cleanly in either a residential or commercial category. I was able to arrange a tailored loan that was securitized on Wall Street for about $3.5 million, with a 16-month interest reserve, and we were able to close and extend the loan to give them another three years for the market to recover. 

Not to get too political, but the changing of the guard at The White House has resulted in countless sweeping changes. How is this impacting the CRE lending environment?

We have a real estate guy in The White House now and when you have a businessman who’s a is a deal maker, one would expect that there would be policies that would be pro-business and pro-real estate. I’m bullish on the economy and on real estate, short term. Reversing the course from the previous administration may be inflationary or flat, and we have interest rates that are among the highest in the last 50 years. The president is trying to address deregulation, tax cuts and the budget deficit and with both a Republican Congress and a Republican Senate he has a two-year window to try to enact these policies. The short-term may be flat to inflationary, but as these changes take effect, I believe then interest rates may cool down. Some people are projecting that this may be a bottom or near-bottom for commercial real estate.

What was your personal career highlight in private credit?

Private credit is a growth industry these days. It gives me great satisfaction helping people get financing for deals that are otherwise unable to be financed by conventional banks. There’s a project I’m working on where several banks passed on new development deals or construction deals. But in the private credit market, there are firms and opportunities that specialize in different types of credit risks. In my case, as an independent real estate advisor, I have access to banks, investment banks, credit unions and private lenders. And in the event that none of those channels work, I have a bunch of private high net worth investors able to do private loans that will syndicate. 

What is your favorite movie? 

I enjoy films from different periods. The classics would be Casablanca and Annie Hall; but I love the French Connection –New York in the ‘70s, when I was in college at NYU and it was a gritty, interesting place.

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