Opportunity
Real Estate Credit Markets: A Prime Investment Landscape
In the wake of recent financial upheavals, the landscape for real estate credit investments has transformed. Bank failures, rising interest rates, and volatile equity markets have fueled the private credit market, which has continued to grow rapidly. By 2024, it had already reached $2.1 trillion in global assets, with about three-quarters of that figure in the U.S., according to Morgan Stanley This represents a significant rise from the $1.5 trillion market in 2023. Analysts expect this momentum to continue, with the market possibly surpassing $2.8 trillion by 2028, as reported by the IMF. Key drivers include a retreat from traditional bank lending and the attractiveness of private credit's flexibility and higher returns, particularly in a rising interest rate environment.
This expansion is driven by a severe credit crunch, with U.S. banks facing unrealized losses in 2022 and 2023 that dwarf the impacts of the 2008 financial crisis. According to the FDIC, by the end of 2023, these unrealized losses totaled $478 billion, or 8.8% of the $5.43 trillion in securities held by banks. Despite strong demand for capital, many banks continue to be constrained in their lending capabilities due to ongoing depletion of reserve ratios and heightened risk aversion. As businesses and individuals seek alternative funding sources, they are willing to pay premium rates, creating a unique opportunity for private credit investments like our real estate-backed debt fund.
In the wake of recent financial upheavals, the landscape for real estate credit investments has transformed. Bank failures, rising interest rates, and volatile equity markets have fueled the private credit market, which has continued to grow rapidly. By 2024, it had already reached $2.1 trillion in global assets, with about three-quarters of that figure in the U.S., according to Morgan Stanley This represents a significant rise from the $1.5 trillion market in 2023. Analysts expect this momentum to continue, with the market possibly surpassing $2.8 trillion by 2028, as reported by the IMF. Key drivers include a retreat from traditional bank lending and the attractiveness of private credit's flexibility and higher returns, particularly in a rising interest rate environment.
This expansion is driven by a severe credit crunch, with U.S. banks facing unrealized losses in 2022 and 2023 that dwarf the impacts of the 2008 financial crisis. According to the FDIC, by the end of 2023, these unrealized losses totaled $478 billion, or 8.8% of the $5.43 trillion in securities held by banks. Despite strong demand for capital, many banks continue to be constrained in their lending capabilities due to ongoing depletion of reserve ratios and heightened risk aversion. As businesses and individuals seek alternative funding sources, they are willing to pay premium rates, creating a unique opportunity for private credit investments like our real estate-backed debt fund.
The Case for Real Estate-Backed Debt Funds
Investing in real estate-backed debt funds offers a strategic approach that combines security, diversification, and high returns—making it an appealing option for institutional investors.
Secured and Stable
01
Secured by Real Estate Collateral
Investments are backed by tangible assets, enhancing security.
02
Offering Low Volatility
Integrating real estate debt into your portfolio reduces exposure to market fluctuations.
03
Delivering Low Default Rates
Real estate-backed loans have historically demonstrated lower default rates compared to other debt instruments.
Diversified and High Yield
01
Providing Limited Access
Private lending vehicles like our fund are rare, presenting a distinct investment opportunity.
02
Spreading Risk Across Multiple Loans
Investment risk is mitigated by diversification across numerous borrowers.
03
Offering High Yield Growth
This fund provides significant potential for income and capital appreciation.
Accessible and Managed
01
Offering Multiple Account Types
Investments in our fund are Eligible for IRAs, HELOCs, cash accounts, trusts, and corporate entities.
02
Managed by Experienced Professionals
Our seasoned team oversees all investment and loan management processes.
03
Requiring No Active Management
Investors benefit from passive income without the need for hands-on involvement.
Delivering Strong Returns and Transparency
01
Providing Consistent Cash Flow
Quarterly distributions include interest and rental income.
02
Ensuring Full Transparency
Monthly reporting and audited financials offer clear insights into fund performance.
03
Offering Direct Access to Management
Investors have open lines of communication with our management team.
The Mountain West continues to stand out for real estate investment, driven by rapid population growth, economic strength, and a business-friendly climate.
Key factors that make the Mountain West an attractive investment destination include:
Maintaining Affordability and Economic Growth
The region offers a lower cost of living, low unemployment rates, and sustained economic expansion.
Attracting Business Relocation
Major companies are moving their headquarters to the Mountain West, especially Utah’s burgeoning "Silicon Slopes" and Idaho, specifically Meta and Micron – that latter using CHIPS Act for funding for its expansion.
Leading in Economic Expansion
Two of the fastest-growing economies in the U.S. have been Idaho (GDP rising 7% in 2023) and Utah (GDP rising 6.3% in 2023).
Fostering a Favorable Lending Environment
Utah’s absence of usury caps creates an advantageous climate for private lenders.
Driving Manufacturing Investment
The Mountain West led the nation with $26.5 billion in manufacturing investments in 2022, growing nearly six-fold from $4.2 billion in 2017.
Experiencing a Housing Shortage
Record-low housing inventory continues to drive demand for real estate development.