2026 Multifamily Leadership Series: Donald P. King III, Walker & Dunlop

For the fourth year of Connect CRE’s annual Leadership Series, we’re focusing on the multifamily sector. We invited 18 apartment heavyweights to provide their unfiltered views of the current market, its challenges and opportunities. The insights of these power players have been collected in a downloadable report, and we’re also presenting them individually, in alphabetical order. Here, EVP and Co-Head of Capital Markets at Walker & Dunlop, shares his insights.

Are the markets and products you’re investing in and developing changing? 

The strongest multifamily fundamentals today are concentrated in markets with stable job growth, household formation, and relative affordability. We continue to see compelling long-term demand drivers across the Sunbelt, but we are also seeing renewed interest in select Midwest and Northeast markets where supply has remained more disciplined. 

From a product perspective, developers are becoming increasingly selective. The market is moving away from “amenity arms races” and toward projects that emphasize efficient unit design, attainable rents, and operational durability. There is also growing focus on workforce and middle-market housing, where demand remains deep and the supply-demand imbalance is most pronounced.  

What does construction lending look like in the current environment? 

Construction lending remains available, but underwriting standards are significantly tighter than they were several years ago. Lenders are prioritizing experienced sponsorship, lower leverage, strong recourse structures, and projects with clear market differentiation. 

Banks continue to manage regulatory pressures and balance sheet constraints, which has reduced overall construction loan capacity. At the same time, debt funds and alternative lenders have stepped in to fill portions of the gap, though often at higher pricing. 

The projects attracting financing today tend to be those with conservative assumptions, meaningful equity commitments, and locations where supply pipelines are moderating. Capital is available, but discipline has returned to the market. 

Has the debt market changed compared to a year ago, and if so, how?

The debt market today is more constructive and predictable than it was a year ago. Interest rate volatility moderated earlier this year, spreads improved across several parts of the market, and lenders generally regained confidence underwriting transactions. 

Agency lenders continue to provide meaningful liquidity to the multifamily sector, particularly for stabilized assets, while banks, life companies, and CMBS lenders have all become more active as market conditions stabilized. Borrowers are also adapting to a “higher-for-longer” rate environment by using more conservative leverage and underwriting assumptions. 

Still, recent geopolitical tensions in the Middle East and renewed movement in the 10-year Treasury remind us that volatility has not disappeared entirely. While capital remains available, lenders continue to prioritize experienced sponsorship, durable cash flow, and realistic business plans, particularly in markets still absorbing elevated supply levels. 

Absorption has increased this year. Is that due to a slowdown in development or other factors? 

Absorption has improved because multifamily demand fundamentals remain very strong. Household formation, job growth, immigration, and affordability challenges in the for-sale housing market are all supporting rental demand. 

At the same time, the industry is beginning to move past the peak of the supply wave that hit many Sunbelt markets over the last two years. While deliveries remain elevated in some regions, new starts have slowed materially, which should help rebalance supply and demand over time. 

The combination of resilient renter demand and a moderating future pipeline is creating a healthier operating environment than many expected heading into the year. 

Will we see an increase or decrease in rent prices this year? 

Nationally, we expect rent growth to remain positive but measured. Markets that experienced the largest supply increases may continue to see softer near-term rent performance, while markets with more constrained development pipelines are already showing stronger pricing power. Importantly, multifamily fundamentals vary significantly market by market. The broad national narrative often misses the fact that many regions continue to experience significant housing shortages and healthy renter demand. 

Over the longer term, the lack of new housing supply relative to population growth remains one of the defining themes for the industry. That imbalance should continue to support multifamily performance, even if rent growth normalizes from the unusually strong levels seen several years ago. 

Lower-income households spend more of their income on paying rent. Where does a solution lie? 

There is no single solution to the affordability challenge, but increasing housing supply must be part of the answer. The U.S. has underbuilt housing for more than a decade, and that shortage disproportionately impacts lower-income households. 

Public-private collaboration is critical. That includes zoning reform, faster entitlement processes, expanded tax credit programs, and policies that encourage the development and preservation of workforce housing. Reducing barriers to construction can improve affordability over time. 

The industry also has an opportunity to focus more intentionally on attainable housing solutions rather than exclusively luxury product. Addressing affordability will require coordinated efforts across developers, lenders, policymakers, and local communities.

Walker & Dunlop is one of the largest commercial real estate finance and advisory firms in the United States. The Bethesda, Maryland-based firm originated $41 billion of debt in 2025 and services a $144-billion loan portfolio.  

Click here to read the series.