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Lenders and investors alike have become progressively concerned
about climate change and the effect their lending and investment
decisions may have on the environment. As such, they are seeking
ways to reduce their carbon footprint to achieve environmentally
beneficial outcomes while also meeting their investment objectives
and financial returns.
To meet these concerns, green loans were introduced. A green
loan is defined as “any type of loan instrument made available
exclusively to finance or re-finance, in whole in part, new and/or
existing eligible Green Projects.” This includes term loans,
revolving credit facilities and working capital facilities.
Green Loan Guidelines
With the growth of this loan product, it was necessary to
establish guidelines specific to the green loan to ensure
consistency across the wholesale green loan market. In March 2018,
the Loan Market Association (LMA), together with the Asia Pacific
Loan Market Association (APLMA) and the Loan Syndications and
Trading Association (LSTA), published the Green Loan
Principles (GLP) and Guidance on Green Loan
Principles (GLP Guidance). An updated version of the GLP and
the GLP Guidance were published in February 2021.
The GLP set out a framework of market standards and voluntary
recommended guidelines to be applied by participants on a
deal-by-deal basis that classifies the instances in which a loan
may be categorized as “green.” To qualify as a green
loan, the loan must comply with the following four components of
the GLP: 1) use of proceeds, 2) process for project evaluation and
selection, 3) management of proceeds and 4) reporting. This also
includes applying the loan’s proceeds to an eligible green
project such as, but not limited to:
- green buildings that meet regional, national or internationally
recognized standards or certifications - renewable energy, including production, transmission,
appliances and products - pollution prevention and control, including reduction of air
emissions, greenhouse gas control, soil remediation, waste
prevention, waste reduction and waste recycling - environmentally sustainable management of living natural
resources and land use, and - climate change adaptation, including information support
systems such as climate observation and early warning systems
It is important to note that a green loan may only be marketed
or labeled as such if it complies with the GLP. The GLP provides
that “[g]reen loans should not be considered interchangeable
with loans that are not aligned with the four core components of
the GLP.” A loan party must indicate that the loan complies
with the GLP; the fact that the loan is being used to finance an
environmentally friendly project does not make it a green loan.
Summary of the Four Core Components
- Use of Proceeds. The fundamental basis of a
green loan is the utilization of the loan proceeds, which must be
generally applied to an environmentally friendly purpose. All green
projects should provide environmental benefits that will be
assessed and, where feasible, quantified, measured and reported by
the borrower. The proceeds of a green loan may be used to finance a
new green project or refinance existing debt on a green
project. - Process for Project Evaluation and Selection.
In order for lenders to understand and assess the environmental
attributes of a green loan, the borrower should clearly communicate
1) its environmental sustainability objectives, 2) the process by
which the borrower determines how its project fits within an
eligible green project and 3) the eligibility criteria it uses to
identify and manage potentially material environmental and social
risks associated with the proposed project. - Management of Proceeds. The proceeds of a
green loan should be credited to a dedicated account or tracked by
the borrower in a way that maintains transparency and promotes the
integrity of the loan product. In the case where a green loan takes
the form of one or more tranches of a loan facility, each green
tranche must be clearly designated, with proceeds of the green
tranche credited to a separate account or tracked in the
appropriate manner by the borrower. - Reporting. The borrower should prepare a
report and keep it updated with information on the use of proceeds
to be renewed annually until fully drawn and as necessary
thereafter in the event of material developments. The report should
include a list of green projects to which the green loan proceeds
were allocated, a brief description of each project, the amounts
allocated to each project and the expected impact of each
project.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The real-estate sector is in a quandary.
The housing market was a wild rollercoaster ride that ended with a big fat splat last year, with mortgage rates doubling and demand plummeting.
Home sellers aren’t keen on listing their homes, given that they’ve recently secured an ultra-low mortgage rate. Home buyers, as a result, are struggling to find good options as the number of homes for sale remains low.
So where will the supply come from, to meet buyers’ demand? And what happens if a recession hits? Will home prices fall?
MarketWatch spoke with Doug Duncan, senior vice president and chief economist at Fannie Mae
FNMA,
in a video interview.
Duncan’s team, which is the economic and strategic research group at Fannie Mae, recently published its economic and housing forecast.
MarketWatch: What happens if the U.S. Federal Reserve raises interest rates to 5.5%? What does that mean for the housing market?
Duncan: The housing sector has a very well established relationship with monetary policy. It’s one of the most interest-rate sensitive sectors, if not the most interest rates in the sector.
We made our first call on the recession [to occur this year]. We looked ahead and we said, if things unfold over the next 9 to 12 months in the following way, we think we’ll have a mild recession in 2023. That looks like it’s a pretty good call. It’s possible it could be a soft landing.
Our base case is something in the neighborhood of a 0.5% to 1% decline in GDP over 2023.
“‘We think we’ll have a mild recession in 2023.’”
And part of the reason we expect it to be mild is housing because we haven’t solved the supply problem. Millennials are not done buying houses.
The demand-and-supply characteristics are there for a recovery if interest rates come down.
MarketWatch: We keep talking about this problem of not having enough homes on the market for sale, and that we aren’t building enough new homes. When will supply improve? Where will these homes come from?
Duncan: It’s gonna come from home builders, until boomers age to a level where they’re forced to give up their home.
One of the things about the boomers that they’ve been very consistent on, is [to say] we intend to age in place. The 75-plus portion of our population has a 78% homeownership rate. There’s a lot of owned homes in that population group.
And of course, they’re going to face mortality, as we all will. So that’s really the biggest driver of things related to mortality that will force them out of those homes that would put that back into supply.
But they’re a healthier group than generations before them. They’re living longer.
So that puts [supply] on the back of builders. But the builders are up against affordability issues from a development perspective because of local zoning issues.
MarketWatch: Are you concerned about this resistance to people returning to work, and the impact on commercial real estate?
“‘Businesses are going to evaluate remote work.’”
Duncan: Businesses are going to evaluate remote work, and they’re going to say, we’re letting workers work remote so that reduces their commuting costs, which is actually a real income gain for them. Because they don’t have to pay for the wear and tear of the car or the subway.
Not all [remote] workers are coming back to that space, and some of that space is going to be reduced in price or in value. And that will show up in defaults and delinquencies, or the sale of a property at a loss.
In the cities with a big central business district like San Francisco or New York City or Chicago, it might be more significant [than] say Indianapolis or Dallas or places where there’s a lot more developable land.
MarketWatch: You changed your forecast for housing. Now you expect home prices to fall 6.7% in the next two years, which is more than you previously estimated. What was the reason for that?
You can look and see where [houses] were withdrawn from availability and re-listed at a lower price. That gives you an idea of whether price declines are taking place in that market.
Markets that saw the most rapid appreciation are seeing the most rapid decline. You are probably seeing more declines in the San Jose area than in Indianapolis.
Households that bought recently are the ones that are probably at some risk, although when they bought, they probably got a very low interest rate. So they have to make a decision: Do I give up his 3.5% interest rate because prices fell 20%? Well, if I’m gonna live in the house, does it really matter?
This interview has been edited and condensed for style and clarity.
Blackstone’s net income fell during the fourth quarter, and the investing giant’s assets under management came in shy of the $1tn target it expected to reach in 2022 as fundraising weakened in some of its strategies aimed at individual investors.
The New York investment firm reported net income of $557.9m, or 75 cents a share, compared with a profit of $1.4bn, or $1.92 a share, during the same period a year earlier.
A drop in the value of Blackstone’s real estate investments contributed to the profit decline. Valuations fell by 2% and 1.5% from the previous quarter for its two main strategies.
Blackstone’s assets under management rose to $974.7bn, up from $950.9bn in the prior quarter and $880.9bn a year earlier. The firm raised $43.1bn in the quarter and $226bn for the full year.
That wasn’t enough to push Blackstone past its goal set in 2018 of reaching $1tn in assets by 2026, which it had since said it expected to reach in 2022.
Breit, Blackstone’s nontraded real-estate investment trust aimed at individual investors, posted a return of 8.4% in 2022. Yet the vehicle experienced an uptick in requests from investors to sell shares in the fourth quarter. That caused Blackstone to limit redemptions and led to a big drop in its stock. The shares have since recovered much of that ground.
READ Why Blackstone’s BREIT is a cautionary tale for private funds
Breit and Blackstone’s nontraded business-development company, Bcred, have been big drivers of its asset and fee growth in recent quarters as the portfolios of institutions such as pension funds and sovereign wealth funds become saturated with private assets.
On 3 January, Breit struck a deal with UC Investments, the entity that manages the endowment for the University of California system. Under the agreement, UC Investments said it would put $4bn into Breit and hold the shares for six years. Blackstone is contributing $1bn of its own Breit shares to the venture, effectively backstopping UC’s returns until its commitment is exhausted.
On 25 January, UC Investments said it was committing another $500m to Breit under the same terms.
“We’re north of $14bn of liquidity, and that makes us feel pretty good, not only to help meet investor requests but also for potential deployment,” Blackstone president Jonathan Gray told The Wall Street Journal.
Blackstone reported comparable cash flows were up 13% across Breit’s portfolio in 2022, and Gray said the tone of Blackstone’s conversations with financial advisers had improved in recent weeks.
The firm said the value of its corporate private equity portfolio climbed by 3.8% in the quarter. That compares with a gain of more than 7% for the S&P 500.
Blackstone’s private credit portfolio, which is nearly all floating-rate debt, appreciated by 2.4% in the quarter as interest rates rose. Blackstone’s hedge-fund investments climbed by 2.1%.
Distributable earnings, or cash that could be handed back to shareholders, came in at $1.3bn, or $1.07 a share, compared with $2.3bn, or $1.71 a share, a year earlier, as the firm sold off fewer assets.
Earlier this month, Blackstone said it finished raising a $25bn fund dedicated to secondaries, a type of transaction in which the fund buys interests in other private equity funds from existing investors.
Perpetual capital assets under management climbed by 18% to $371bn.
Blackstone in October struck a deal to buy a majority stake in the climate technologies business of Emerson Electric in a deal that valued the unit at $14bn.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com
This article was published by The Wall Street Journal, a fellow Dow Jones Group brand
Dear MarketWatch,
I’m from New Jersey. My daughter and I are looking to invest in a multi-family unit for our family. I’m retired and live in a luxury apartment paying $2,000 a month for rent, soon to increase to $2,200.
My daughter is a homeowner and her property currently has $75,000 to $100,000 in equity.
We would like to know if it would make sense for my daughter to sell her home (she would make at least $75,000 at the rates homes are selling in her area), and we move together into a rental home for $3,300 a month, and plan to wait a year for the housing prices to go down before purchasing a multi-family?
Thank you.
Timing the market
‘The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.
Dear Timing,
Given the headwinds in the housing market right now, I’d say, go for it: Sell now, and slowly start looking for a home to buy.
As a buyer, the environment isn’t great. The number of homes for sale is low, as homeowners are locked in to ultra-low mortgage rates. They’re not going to give that up easily, so you have few options. That will also keep prices relatively high in New Jersey.
Plus, mortgage rates are still above 6% still, which means you’re gonna have to budget for higher monthly payments.
Interest rates may fall this year. “I think 2023 will be a year of volatility. The economy is already performing better than many expected, which is giving the Fed less of an incentive to cut rates,” Mohannad Aama, a portfolio manager at Beam Capital, recently told MarketWatch.
But as a seller, this same environment presents a great opportunity.
“We have an extreme lack of inventory that is causing the market to favor sellers at almost every price point,” Melissa Rubenstein, a Realtor for Christie’s Real Estate New Jersey, told MarketWatch.
“‘We have an extreme lack of inventory that is causing the market to favor sellers at almost every price point.’”
But do adjust your expectations. The house may not fetch the price you both have in mind. According to one study by Wharton, some homeowners list their home prices higher than the market rate. As a result, homes stay on the market longer and, as the Wharton report notes, listing a house at above the market rate creates a “psychological dependence on the original purchase price [and] generates an aversion to losses that is 2.5 times larger than the prospect of gains.”
Timing the sale before the spring may work out for you. Spring is generally the start of the home-shopping season.
“I would take advantage of that situation and get the most money possible for your daughter’s home before any rush of inventory in the spring,” Rubenstein added.
So yes, it may make sense to move ASAP on selling the home. But wait before you buy, either for rates or prices to drop, or inventory to rise.
Plus, homeowners are starting to turn to the rental market for cash flow, so you may actually get a discount on rents too, in New Jersey.
But be warned: There are no guarantees when trying to time the market.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Credit researchers at Goldman Sachs now expect home prices in several “overheated” metro areas to fall over 25% from peak levels.
Metro areas included in their forecast were San Jose, Austin, Phoenix and San Diego, according to a new home-price outlook from a Goldman research team led by Lotfi Karoui.
Some of the markets at risk for the biggest price drops this year (see chart) already saw at least a 10% depreciation in home price growth, according to the Goldman team.

Austin, San Francisco, San Diego and Phoenix to see biggest home price declines in 2023.
Zillow, Goldman Sachs Global Investment Research
While sharp price drops could present “localized risk of higher delinquencies for mortgages originated in 2022 or late 2021,” declines aren’t expected to be as big of a threat everywhere.
Nationally, the Goldman team expects home prices to fall by roughly 10% this year from June 2022 levels, following their roughly 4% estimated decline in the second half of last year.
“This decline should be small enough to avoid broad mortgage-credit stress, with a sharp increase in foreclosures nationwide seeming unlikely,” the team wrote.
U.S. real-estate activity has fallen off a cliff since the Federal Reserve began jacking up rates in March to tame high inflation. Home prices, however, also rose 40% since March 2020, according to Deutsche Bank.
The new Goldman home-price forecast hinged on an expectation that interest rates will remain elevated for longer. The team said their year-end forecast for the 30-year fixed-rate mortgage was revised higher by 30 basis points to 6.5%, but they expect it to retreat to 6.15% in 2024.
“This path would cause affordability to worsen incrementally, after a slight improvement over the past two months,” the team said, with home prices likely to shift to a 1% appreciation in 2024 if the U.S. economy avoids a recession.
U.S. stocks rose for a second straight session Wednesday, a day before an update on consumer inflation is expected to show a monthly decline in the annual rate to 6.5% from a 9.1% peak this summer. The Dow Jones Industrial Average
DJIA,
gained 0.8% Wednesday, the S&P 500 index
SPX,
rose 1.3% and the Nasdaq Composite Index
COMP,
advanced 1.8%.
Read: Why Thursday’s U.S. CPI report might kill stock market’s hope of inflation melting away
ATLANTA–(BUSINESS WIRE)–Jan 10, 2023–
Stonehill’s commercial real estate group, Stonehill CRE, has provided approximately $160 million in acquisition financing for five malls representing more than 4.5 million square feet of retail space across the U.S.
“Despite the continued market volatility and capital market trends, our CRE team was able to deliver lending and capital markets solutions that match our sponsors’ business objectives and priorities,” said Daniel Siegel, president of Stonehill CRE.
The recent Stonehill CRE retail transactions include:
- Bellis Fair Mall – Originating a $24.0 million first mortgage loan for the 774,264 square-foot shopping mall in Bellingham, Washington.
- Cumberland Mall – Originating a $28.8 million first mortgage loan for the 953,313 square-foot shopping mall in Vineland, New Jersey.
- Greenwood Mall – Originating a $42.3 million first mortgage loan for the 970,523 square-foot shopping mall in Bowling Green, Kentucky.
- Livingston Mall – Originating a $42.0 million first mortgage loan for the 970,000 square-foot shopping mall in Livingston, New Jersey.
- The Mall at Robinson – Originating a $25.5 million first mortgage loan for the 874,000 square-foot shopping mall in Pittsburgh, Pennsylvania.
“Brick-and-mortar is still a necessary component of a retailer’s multi-channel strategy,” said Siegel. “According the National Retail Federation, traditional in-store purchases still accounted for the majority of retail holiday spending.”
“To remain competitive, owners must accelerate their plans and expand their thinking to find ways to keep their malls relevant in a changing landscape. Stonehill CRE provides needed liquidity for maturing loans, new acquisitions and construction projects,” said Greg Koenig, Stonehill CRE’s senior vice president.
Stonehill, an affiliate of Peachtree Group, launched Stonehill CRE in May 2022 and expects to deploy approximately $500 million of capital in 2023.
About Stonehill
Stonehill, a direct lender, is actively providing permanent loans, bridge loans, mezzanine loans and preferred equity investments secured primarily by hotel assets. Founded in 2013, Stonehill provides creative finance solutions for acquisitions, recapitalizations, refinancings and renovations and has completed more than 400 transactions totaling over $4.5 billion. The principals of Stonehill have combined to originate, structure or purchase over $10.0 billion of debt. For additional information, please visit www.stonehillsc.com.
About Peachtree Group
Peachtree is a private equity investment, asset and fund management firm focusing on opportunistically deploying capital across its distinct operating and real estate divisions, including hospitality, commercial real estate lending, residential development, capital markets and media. Since its founding in 2008, the company has completed hundreds of real estate investments valued at more than $8.1 billion in total market capitalization and currently has more than $2.1 billion in equity under management. For more information, visit www.peachtreegroup.com.
View source version on businesswire.com:https://www.businesswire.com/news/home/20230110005218/en/
CONTACT: Charles Talbert
678-823-7683
ctalbert@peachtreehotelgroup.com
KEYWORD: GEORGIA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: PROFESSIONAL SERVICES OTHER CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE FINANCE CONSTRUCTION & PROPERTY REIT
SOURCE: Stonehill
Copyright Business Wire 2023.
PUB: 01/10/2023 08:55 AM/DISC: 01/10/2023 08:55 AM
Copyright Business Wire 2023.
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