Core+ is now financed like value-add and value-add like opportunistic.

The real estate financial market did not suffer this first half year such as in 2009, but things have significatively changed for office financings. What Damien Giguet, founder and CEO of Shift Capital, sums up in one sentence: "Core+ is now financed like value-add and value-add like opportunistic." Before the sanitary crisis, the financial advisory team had six value-add transactions under process (three real estate development and three structured finance deals) on which credit and investment approvals had already been obtained. One bank excepted, all lenders have maintained their commitments. However, leverages are no longer the same. All boards and sponsors should therefore reassess their files in line with the new post-Covid market environment, particularly in terms of asset value. Discounts have already been noticed on value-add or Core+ transactions, but with few investment transactions realised, it is difficult to determine the concrete repricing. According to JLL, the discount for value-creating assets should be between -15% and -30%. A repricing that impacts several ongoing office processes in La Défense or in Paris area.