The Next Phase in GCI’s Financing of Real Estate
As the Australian real estate market continues to evolve, one truth has become increasingly clear: traditional banks can no longer be relied upon as the solution to all financing needs. Over the last few years, tighter regulations, shifting economic conditions, and risk-averse lending practices have made it harder for many investors to access the capital they need – whether they are looking to finance residential properties, commercial spaces, industrial sites or agricultural land.
The result? A widening gap between demand for real estate funding and the availability of traditional capital. But where banks see risk and apply cookie-cutter eligibility criteria, private credit funds see opportunity and the provision of bespoke solutions.
At GCI, we have launched our Real Estate Credit Fund with $100 million in committed capital ready to deploy. The fund is tailored to serve borrowers who may not fit neatly within bank lending criteria but who nonetheless have strong, viable assets in need of financing solutions, including short-term bridging loans.
By participating in this underserved segment, we are part of an important group of specialists facilitating real estate activity within the economy. In this article, we will explain why this shift towards private credit is not only necessary but transformative for some real estate investors.
Our focus spans a range of property types, including residential, industrial, retail, commercial, hospitality, and agricultural properties, as well as land with and without development approval (DA).
A Changing Landscape in Real Estate Finance
For years, traditional banks have been the backbone of real estate finance and the arbiter of who obtains funding. However, stricter regulatory frameworks and conservative lending practices have increasingly constrained the ability of banks to provide timely, flexible financing. This is especially true for more complex property financing needs involving multiple forms of collateral, where collateral is in a state of transition or where loan to value ratios sit outside traditional parameters.
Whether you have a borrower seeking to finance a land subdivision, residual stock from a development project, the exercise of a purchase option or even agricultural land, it’s becoming increasingly difficult to secure funding from conventional sources. The rigidity of bank lending, combined with lengthy approval processes, can stifle progress – leaving investors unable to move forward with plans that have strong potential.
Private credit, on the other hand, offers the flexibility and speed required to fill these gaps. Private lenders like GCI can provide bespoke solutions that cater to the unique needs of a particular real estate investor. By offering asset-backed loans ranging from $5 million to $30 million, we enable real estate investors to pursue a wide range of opportunities without the delays and limitations imposed by traditional banks.
How Private Credit is Bridging the Gap
At GCI, our Real Estate Credit Fund is designed to do more than just provide capital; it’s designed to provide tailored solutions. Some real estate opportunities can be complex with their own set of unique challenges. That is why we take a flexible approach to every loan, working closely with borrowers to see through the complexity and to understand their specific requirements, ultimately creating financing solutions that align with their timelines and goals.
Here’s how we are bridging the gap:
- Speed and Flexibility
One of the primary reasons borrowers turn to private credit is the ability to execute quickly. Time is often of the essence in real estate investments – whether it’s closing on a commercial property, financing residential residual stock, or securing industrial land without DA. At GCI, we have the resources to understand and assess complexity, derive solutions and deploy capital far faster than traditional lenders, thereby offering solutions (typically 3 to 24 months) that give investors the agility they need to act on opportunities. Turnaround times to funding can be as short as 2-3 weeks and where changes are required during the course of a loan, these can be assessed and approved within days. - Financing Across Asset Classes
Our fund is designed to serve a wide array of real estate segments, from residential, commercial and industrial properties, to agricultural and land investments. This diversity allows us to work with a range of borrowers. We focus on the underlying value of the asset and the potential of the investment, rather than adhering to rigid bank criteria. - Creative Financing Solutions
Private credit allows for more creative structuring of loans. For example, we have provided capital to investors using flexible pricing and payment schedules based on specific events / milestones, capitalising interest as well as interest-only loans. We are also able to offer innovative structures that include a going concern business aspect, to help strategically align with the specific needs of a transaction.
Private Credit and the Future of Real Estate Financing
The real estate market is undergoing significant transformation, and private credit is playing a critical role in this evolution. With more borrowers recognising the limitations of traditional bank financing, the demand for alternative capital is growing.
At GCI, we believe the future of real estate financing lies in a hybrid model where private credit and traditional banks coexist, each serving different segments and life-cycle stages. Banks will continue to fund low-risk, standardised loans, while private credit funds like ours will cater to more complex, high-potential situations that require custom solutions and quick execution.
Our Real Estate Credit Fund is not just a response to current market conditions, it is a long-term commitment to supporting the growth and development of the Australian real estate sector.
With $100 million in committed capital ready to deploy, we are poised to help investors, brokers, advisors, and property owners unlock new opportunities and navigate the challenges of an ever changing market.
Authored by Gavin Solsky (Co-Founder & Managing Director) and Robert Grajczyk (Investment Director)