Description

Power is in the hands of the ones with cash – that’s the general prediction of the corporate real estate market moving forward post-pandemic. With multi-family companies throwing money at more rental housing and inflation numbers at an all-time high, the future is uncertain as consumers struggle to afford a place to live. Research and Securities Executive VP Ivy Zelman, Investment and Sales Executive VP Kris Mikkelsen, Capital Markets Senior Managing Director Aaron Appel join Willy Walker on this week’s Walker Webcast as they dissect the current condition of the corporate real estate industry, why money is king, the probability of a soft landing versus a hard landing, and their thoughts on the best areas to invest in right now. Ivy Zelman sheds light on how rentals are unsustainable as more capital is flowing into the space, and a backlog of properties without leases exists. She also points out the disconnect between buyers’ willingness to pay and sellers’ expectations. Kris Mikkelsen lays out where he would put on his dollars – capital assets where rates can be reset and capital in markets with strong growth fundamentals and low risk. He emphasizes a lower leverage point and the ever-changing cost of homeownership in the past three months. Aaron Appel believes the future of CRE isn’t completely bleak, as time and time again, we’ve witnessed the market adjusting when there’s enough distress. But with the country’s escalating debt, inflation comes as a result of working to overcome it. Tune in to this new episode of the Walker Webcast — CRE State of the Union with Ivy Zelman, Kris Mikkelsen, and Aaron Appel. ▶️ Key Points In The Webcast: 00:00 Introduction 00:19 Welcome Ivy, Kris, and Aaron! 06:55 Aaron Appel explains the strength of multifamily and industrial assets and the status of borrowing costs and treasury rates 12:15 Aaron’s optimistic prediction of the financial markets 15:12 Ivy Zelman tells the effects of inflation and labor constraints on real estate consumers 17:47 The instability in constructing rental housing 20:49 The disconnect between seller expectations and buyer spending 22:03 Kris Mikkelsen’s advice on what to buy, the current weaknesses of the market, and the three factors affecting rates 27:22 The shift in lower cap rate deals 30:04 How the increased rates mean more rent growth 32:04 Ivy describes why people are reconsidering investors and the returns they’re getting 36:48 The burden investors have to carry and the unseen velocity of turnovers 40:55 Aaron presents a real-world example of inflation and proves the existence of a “hard landing” 46:11 Government support for renters and the pressure to deliver monetized projects 51:23 The possible effects of constructing housing without any renters or buyers 55:02 The difficulties in financing an office building 57:54 The changes in the urban hospitality market post-pandemic 01:00:30 Early innings of foreign capital chasing multifamily assets 01:02:10 Where Ivy, Kris, and Aaron would put their hundred million dollars right now GET NOTIFIED about upcoming shows: » Subscribe to our YouTube channel here: / @walkerdunlop » See upcoming guests on the #WalkerWebcast here: https://www.walkerdunlop.com/webcasts/ RELATED WEBCASTS: Tune in on Wednesdays for fresh perspectives about leadership, business, the economy, commercial real estate, and more! #WillyWalker hosts a diverse network of leaders as they share wisdom that cuts across industry lines.