Walker Webcast: Business, Real Estate and Sports with Alex Rodriguez and Willy Walker
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In his more than two decades as a major league baseball player, Alex Rodriguez generated impressive statistics. These included a .295 batting average, 3,115 hits, 2,086 RBIs and 696 home runs. Upon his retirement, Rodriguez turned to business. These days, he holds multiple leadership titles, including co-founding principal for Monument Capital Management, is focused solely on multifamily investments.
Rodriguez recently teamed with Walker & Dunlop Chairman and CEO Willy Walker at a Monument Capital conference in Florida. Though Rodriguez was the interviewer and Walker the interviewee, the webcast resembled more a friendly chat than a Q&A session. Throughout the 45-minute meet, the two discussed sports, with the conversation focused on Rodriguez’s career, work ethic and his dedication to preparation –in baseball, as co-owner of the NBA’s Minnesota Timberwolves, and as a businessman. The two also discussed the Federal Reserve, bank failures, the current economic situation, and what it all means for CRE, specifically multifamily.
According to Walker, the Fed is not likely to hit “pause” on Effective Federal Fund Rate increases, despite some hopeful commentary. The fact that the Silicon Valley Bank and Signature Bank failures didn’t stop the Fed in pushing the rates, even with the potential of contagion. “If they’ve got that much conviction that they have to keep raising after the SVB and Signature failures, it’ll take a lot more than just ‘oh we think we’ve got inflation under control’ for them to turn around and start cutting rates,” Walker observed.
In terms of strategy, both men agreed that discipline, and a focus in one or two areas of investment is preferable to “scale,” as Rodriguez put it. “We do apartments,” he said. “We do it better than anybody, it’s the only thing we do.” He added that the singular focus has put Monument Capital in a solid place even with the current economic volatility. “We’re happy,” Rodriguez said. “We didn’t get greedy. We didn’t go for the grand-slam doubles. We’re just fine with the singles.”
Monument Capital is also doing well with multifamily, especially given that agency financing is available to back many deals. Walker explained that he’d given a speech in Chicago to investors who owned all asset classes, including retail, office and multifamily. “I asked the crowd, ‘how many of you who own non-multi wish you had the agencies lending in your market?’” Walker said. “Everyone’s hand’s go up. So the role of the agencies to provide liquidity to multifamily is such a huge benefit.”
And the multifamily, in turn, is starting to generate liquidity for investors that have exposure to other CRE asset classes, Walker said. He told the story of a Walker & Dunlop client that ended up selling a multifamily property at a loss (rather than refinancing it) because “that client, who had office exposure decided to harvest out of their multi that had liquidity and putting it there.”
And multifamily continues to look good, even among those who are buying the assets with negative leverage. One of the main reasons is because renters will remain in place, given the extraordinarily low inventory of “starter” homes. “Occupancies will remain high and rents can move,” Walker said, pointing out that ongoing Fed hikes will continue keeping single-family inventory low, while preventing more multifamily from going north. “There’s going to be no new supply,” he commented. “There’s going to be no inventory of single-family home for people to leave multifamily for. And there won’t be any shovels going into the ground because of the banking crisis. This is why a lot of our clients are buying multifamily assets even with negative leverage. They’re seeing that opportunity two years from now.”
Walker Webcast: Business, Real Estate and Sports with Alex Rodriguez and Willy Walker
Walker Webcast: Business, Real Estate and Sports with Alex Rodriguez and Willy Walker
[ad_1]
In his more than two decades as a major league baseball player, Alex Rodriguez generated impressive statistics. These included a .295 batting average, 3,115 hits, 2,086 RBIs and 696 home runs. Upon his retirement, Rodriguez turned to business. These days, he holds multiple leadership titles, including co-founding principal for Monument Capital Management, is focused solely on multifamily investments.
Rodriguez recently teamed with Walker & Dunlop Chairman and CEO Willy Walker at a Monument Capital conference in Florida. Though Rodriguez was the interviewer and Walker the interviewee, the webcast resembled more a friendly chat than a Q&A session. Throughout the 45-minute meet, the two discussed sports, with the conversation focused on Rodriguez’s career, work ethic and his dedication to preparation –in baseball, as co-owner of the NBA’s Minnesota Timberwolves, and as a businessman. The two also discussed the Federal Reserve, bank failures, the current economic situation, and what it all means for CRE, specifically multifamily.
According to Walker, the Fed is not likely to hit “pause” on Effective Federal Fund Rate increases, despite some hopeful commentary. The fact that the Silicon Valley Bank and Signature Bank failures didn’t stop the Fed in pushing the rates, even with the potential of contagion. “If they’ve got that much conviction that they have to keep raising after the SVB and Signature failures, it’ll take a lot more than just ‘oh we think we’ve got inflation under control’ for them to turn around and start cutting rates,” Walker observed.
In terms of strategy, both men agreed that discipline, and a focus in one or two areas of investment is preferable to “scale,” as Rodriguez put it. “We do apartments,” he said. “We do it better than anybody, it’s the only thing we do.” He added that the singular focus has put Monument Capital in a solid place even with the current economic volatility. “We’re happy,” Rodriguez said. “We didn’t get greedy. We didn’t go for the grand-slam doubles. We’re just fine with the singles.”
Monument Capital is also doing well with multifamily, especially given that agency financing is available to back many deals. Walker explained that he’d given a speech in Chicago to investors who owned all asset classes, including retail, office and multifamily. “I asked the crowd, ‘how many of you who own non-multi wish you had the agencies lending in your market?’” Walker said. “Everyone’s hand’s go up. So the role of the agencies to provide liquidity to multifamily is such a huge benefit.”
And the multifamily, in turn, is starting to generate liquidity for investors that have exposure to other CRE asset classes, Walker said. He told the story of a Walker & Dunlop client that ended up selling a multifamily property at a loss (rather than refinancing it) because “that client, who had office exposure decided to harvest out of their multi that had liquidity and putting it there.”
And multifamily continues to look good, even among those who are buying the assets with negative leverage. One of the main reasons is because renters will remain in place, given the extraordinarily low inventory of “starter” homes. “Occupancies will remain high and rents can move,” Walker said, pointing out that ongoing Fed hikes will continue keeping single-family inventory low, while preventing more multifamily from going north. “There’s going to be no new supply,” he commented. “There’s going to be no inventory of single-family home for people to leave multifamily for. And there won’t be any shovels going into the ground because of the banking crisis. This is why a lot of our clients are buying multifamily assets even with negative leverage. They’re seeing that opportunity two years from now.”
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