I recently read a Wall Street Journal piece that discussed a difficult position some private lenders are facing.

Projects are taking longer than expected, and real estate valuations are decreasing. But neither of these things should come as a surprise if you’ve been paying attention to the market.

When traditional banks pulled back around 2018 and 2019, private lenders stepped in and filled the space. At the time, the move made sense. But markets evolve, and some of those same lenders are now caught between what they own and what they owe.

What happens next depends a lot on temperament.

The lenders I’ve seen come through difficult markets aren’t necessarily the ones who made the best bets on the way up.

They’re the ones who, when the environment changed, pivoted quickly. They got creative. They renegotiated. They found partners like LANDCO NEXA to restructure and get back on track.

While that approach is not a new playbook, it does require honesty about the challenges a lender is facing. Private lenders who struggle are usually the ones who wait too long to have that conversation.

For anyone who’d like to get the full picture, head to the comments for a link to the Wall Street Journal article.

Mark Lester, Principal LANDCO NEXA