In this episode of Deal Flow Friday, David Moghavem sits down with Andrew Kwok, Principal at Arcus Harbor Real Estate Capital, to dive deep into the rapidly evolving debt and equity landscape in commercial real estate. They explore why private credit is on fire, the regulatory pressures driving borrowers away from traditional banks, and how debt funds are competing for deals. Andrew shares valuable insights from his 20+ years in the industry, including lessons learned from launching Arcus Harbor and navigating capital markets post-COVID.
From structured finance to agency lending, Andrew and David break down how sponsors can smartly recapitalize, refinance, or acquire assets in today’s climate—where positive leverage is back and the devil is in the details. If you're trying to make sound capital decisions in 2025, this episode is packed with strategy, nuance, and perspective.
Chapters
- 00:00 – Introduction & Arcus Swag Talk
- 01:38 – The Arcus Team’s Deep History
- 03:03 – USC Real Estate Board & Market Thought Leadership
- 04:48 – Why Private Credit is Booming
- 07:18 – Operators Entering the Credit Game
- 09:18 – Shifting from Credit to Equity?
- 10:38 – Appetite Swings in Debt Fund Lending
- 12:08 – CLOs, Back Leverage & Loan Sales Explained
- 13:48 – How Bank Regulation Benefits Private Credit
- 17:08 – Why Arcus Rebranded & How It’s Structured
- 20:18 – Arcus Lending Products and Market Coverage
- 23:18 – A More Nimble, Client-First Approach
- 27:18 – Deal Volume: Agency vs. Alternatives
- 29:48 – Refinances, Maturities & Acquisition Trends
- 34:18 – Seller Capitulation & Buying Below Replacement Cost
- 36:48 – Positive Leverage is Back
- 38:28 – Syndicators: Old School vs. New Age
- 40:38 – Strategic Recapitalizations with Cash-In Refinances
- 43:18 – Insurance Market Dislocation & Recovery
- 45:18 – Advice for Sponsors Making Tough Decisions
- 47:48 – Why Term Sheets Aren’t Always What They Seem
- 49:18 – Deep Diligence and Underwriting is Back
- 51:48 – Term Sheet Minutiae: Strike Prices, Floors, and Caps
- 53:38 – Creative Cap Structures and Market Nuances
- 55:08 – Wrapping Up With Golf & Gratitude
