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Borrower profile: Accesso Partners tracks lender return to the office sector

While lenders had never abandoned the office sector, capital is more widely available than in the recent past, CIO John Rivard says.

Accesso Partners, a Hallandale Beach, Florida-based real estate investment management company, is seeing more lenders which are willing to take a chance on financing acquisitions in the office sector as the US begins to emerge from the covid-19 pandemic.

While the omicron variant of the covid-19 pandemic has stalled plans for tenants to come back to offices, tenants are thinking beyond current restrictions and what comes next, CIO John Rivard told Real Estate Capital USA.

The firm, which targets value-add acquisitions in urban or fast-growing markets, seeks Class A and B+ properties that need transformation. Accesso has observed that while lenders are still much more interested in the industrial and multifamily sectors, office liquidity is improving for a couple of reasons.

“One reason is that yields are higher and lenders are able to hold LTV that they’re very comfortable with,” Rivard said. “For a lot of lenders that are concerned about investing their allocation, office is a nice product type where you can make a $10 million loan or a $1 billion loan. It’s lower LTV than it was pre-pandemic, and terms might be a little tighter. It’s not what I’d call easy money, but it’s there. It’s liquidity.”

The company is both a buyer and seller in the office sector, seeking properties that are adjacent to amenities, transportation and roads. Although the return to office has been more complex than anticipated, Rivard is noticing more comfort from tenants, both in terms of occupying space and thinking about their longer-term space needs.

“What we saw and what we think is continuing is that people are getting more comfortable with signing leases, even if they aren’t going to physically occupy the spaces right away,” Rivard said. “The smaller the company, the more likely they were to be in the offices. The bigger the company, the much more likely there was a flexible plan and what we are seeing is that those plans have been pushed back – not canceled.”

The company is looking at more of the same in terms of investment, including markets in the Southeast. “From a capital side, the markets that are in favor are still in favor. We are evaluating properties and making offers on properties and transactions are closing that were out in the market pre-omicron. Valuations also seem like they’re holding up. That is a long way of saying that things haven’t changed dramatically, except around the edges.”

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