After serving three years as the president & head of Trimont’s operations in Europe, Bill Sexton was tapped as the company’s global CEO. During his 31-year career, Sexton kickstarted several businesses operating in both commercial real estate equity and debt and accumulated extensive leadership experience in the real estate services industry.
In the following interview, Sexton outlined Trimont’s strategy for taking advantage of a number of capital markets opportunities.
What are your plans as you assume the helm at Trimont?
Sexton: The foundations of the business are in great shape. My priority is to ensure our world class teams have access to the resources and technology they need to continue to deliver a consistently high level of service in the increasingly complex world of CRE credit.
The markets remain dynamic as we exit the pandemic. We are focused on ensuring that Trimont is well positioned to respond to, and serve, our clients as global markets continue to reopen and recover.
What are the essential elements of Trimont’s commercial real estate strategy for 2022?
Sexton: Completing the roll-out of Triview, our proprietary technology interface with our clients, remains a priority for 2022. Our clients’ appetite for data has only accelerated during the pandemic. The ways in which we generate, gather, hold, process and, perhaps most importantly, share data is a key to our long-term success.
We are also very focused on the continued globalization of our business as our clients increasingly look around the world for opportunities to deploy capital. With our physical presence in all three regions, namely The Americas, EMEA and Asia Pacific, we are well positioned to serve our clients’ global requirements to a consistently high Trimont standard.
How has the CRE lending landscape evolved in the U.S. and globally?
Sexton: We have seen the acceleration of a number of trends. The continued decline in commercial real estate lending activity from the regulated banking sector in certain parts of the world has created more opportunity for non-bank lenders.
As margins compress in some sectors, we have seen non-bank lenders explore new ways of raising capital and funding themselves. Most notably, several U.S. debt fund managers are looking for ways to access cheaper insurance capital.
Outside the U.S., the influence of U.S. managed capital continues to grow. An increasing number of U.S. sponsored debt funds are looking to develop international CRE credit strategies, as they look to broaden their businesses in the context of plentiful capital.
We expect these trends to continue into 2022.
How have lenders and borrowers reacted to the pandemic-induced challenges?
Sexton: Globally, the CRE lending markets in 2020 and early 2021 became increasingly polarized around certain asset classes, principally industrial, multifamily and office. As the real estate investment market recovers from the pandemic and the real estate equity market finds more liquidity, this polarization is becoming less prevalent.
This is likely to mean borrowers will have more funding options and, in response, lenders are becoming nimbler and more creative in their cost of funding in order to set themselves up to compete in the medium term.
What would you consider a risky investment in the current economic context?
Sexton: A consequence of the global pandemic is that people are reassessing how and where they live, work and spend their leisure time. That inevitably has consequences for the built environment and creates both investment opportunity and risk. In addition, we are likely to see continued inflationary pressures and, consequently, interest rates are likely to rise in the major global markets in the near to medium term. I expect investors to be focused on sectors resilient to these changes and look to ensure they are funded appropriately.
What are your predictions for CRE lending in 2022?
Sexton: Expect to continue to see record levels of activity from the non-bank lending community. I expect non-bank lenders to continue to explore ways of raising cheaper capital, whether that be through the public markets, insurance sector or increasingly complex structured finance.
Outside the U.S., I believe we will see a continued decline in market share from the regulated lenders creating more opportunity for debt funds and other non-bank lenders.