A New Asset Class in Making
Morgan Stanley | July 26, 2017 | Original Article
Here’s a familiar tale of two developments. In a fast-gentrifying neighborhood of a booming urban center, real-estate moguls quickly stitch together a 10-year syndicated loan valued at several hundred million dollars to build a high-rise condo, complete with mixed-used retail and some office space.
On the other side of town, along a tract of abandoned buildings and vacant lots, local leaders work with a community development financial institution (CDFI) to stitch together a financing package for low-income housing from public sector funding sources, foundation grants, and short-term loans from banks. The former is considered a sure bet, while the latter is perceived as a high-risk investment with small odds of success. They epitomize the uneven playing field in the quest for development dollars…