Naftali Credit Partners CEO Glenn Grimaldi has had a unique vantage point for watching developers play an expanded role in the commercial real estate capital stack, sourcing that mezzanine debt to get deals over the finish line.
Prior to joining Naftali Group’s lending arm in 2022, Grimaldi spent more than two decades leading HSBC’s CRE finance platform, where he first saw signs of private credit growth in 2009 amid the Global Financial Crisis. Banks then began to gradually deleverage their CRE balance sheets due to risks and increased regulatory requirements, and the higher interest rate environment of the last three years has only accelerating the need for more capital players.
“I think right now there is a sort of ascendancy of private credit 2.0,” Grimaldi said. “The most important part of the financing these days is the mezzanine deal because banks are reducing their loan-to-value and loan-to-cost [ratios].”
Naftali is among a number of development firms that banks have partnered with when it comes to issuing mezzanine debt in concert with senior loans as a credit enhancement in case there is distress with a property.