Francine Glandt, managing director of real estate corporate and investment banking at Truist Securities, participated in a video interview during Nareit’s REITWISE: 2024 Law, Accounting and Finance Conference, held March 19-21 in Hollywood, Florida.
Glandt pointed to the origins of the current real estate cycle as the recovery phase of the post-2008 recession, which turned into a sustained expansion around 2012-2013, peaking just before the onset of COVID-19. He highlighted uncertainty about a potential recession versus a continued slow recovery, but expressed optimism after the Federal Reserve signaled a pause on rate hikes, which provided banks with much-needed clarity on a potential recovery in 2024.
On the impact of Basel III, Glandt emphasized its impact on bank liquidity and capital requirements. He said although the proposed credit standards may ease once they are finalized, smaller banks are feeling more stress due to the higher concentration of commercial real estate loans compared to larger banks with more diversified portfolios and solid capital structures.
With regard to alternative capital sources, Glandt highlighted the flexibility of publicly listed REITs in taking advantage of various options such as bond issuances, private placements and REIT ATM (at-the-market) programs. He saw an increase in bond issuance as early as 2024 due to favorable market conditions and emphasized the benefits of convertible bonds during market dislocation.
