JLL Global Capital Markets Expert Carpenter to Advance Loan Sale Advisory Service

Noble Carpenter has been appointed to lead Jones Lang LaSalle’s loan outsourcing and disposition as part of the firm’s real estate investment banking team. This move is a response to the JLL’s “First Quarter 2008 Capital Markets Report” that indicated an expected strong increase in loan sale outsourcing as investment and commercial banks and mortgage companies seek to tap unconventional debt buyers and loan participants to clear balance sheets. In an exclusive interview with CPN, Carpenter said, “Some of the most active buyers of debt have been hedge funds and opportunity funds. So the new investors include many of the traditional equity investors of real estate in addition to foreign investors. These groups are looking to purchase “loan to own” whole loans, B notes and mezz, in addition to B notes and mezzanine loans which are re-priced to reflect an appropriate risk-return relationship. This is a new investor class that has bought notes, but they are comfortable with the product and the risk factors. Large scale investors are now looking to buy loans because they are seeing the potential of making equity-like return from buying up the debt.” The company stated that while commercial loan delinquencies remain at fundamental lows, there is new loan sales activity emerging as investment banks and mortgage companies seek innovative ways to sell mispriced commercial loans that are clogging up their balance sheets and contributing to a slow down in transaction volume. As Carpenter told CPN, “Our view is that we’re in a transition phase which makes it hard to predict future volume. Many commercial and investment banks have been successful in selling significant positions of their loan books. But the “quality” of the remaining loans left on their balance sheets is of question. Many of these remaining loans were mispriced initially, which is why they haven’t sold. The banks are now going through a “pricing discovery” process on these harder to sell loans. The pressure we’re likely to see next is at the regional banks which are now coming under greater scrutiny by the regulating authorities.”