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Walker Webcast: Willy Walker on Divisions in Politics, the Economy and Real Estate

During mid-July, Walker & Dunlop hosted its annual Summer Conference in Sun Valley, ID. A little less than a month later, the Aug. 3, 2022 Walker Webcast featured opening conference remarks from Walker & Dunlop chairman and CEO Willy Walker.

Using appropriate animal slides as visual aids during his hour-long observations, Walker’s topics touched on politics, economics, climate change and the media, with the takeaway involving balance in all things.

“So the world we’re living in today feels a little bit like a three-headed monster,” he said to begin. “We’ve got hyperinflation, we’ve got rising interest rates, we’ve got war in Ukraine and we’ve got a massive political divide in the United States of America.”

While the situation today is challenging, it was even more difficult two years ago.

“We were locked down in a pandemic two years ago right now, and we had zero visibility as it relates to when we would have a vaccine to the COVID virus,” Walker reminded participants. “Unemployment was getting close to 20% two years ago right now, and our government was doing everything it possibly could not only save the economy, but to also prevent massive civil unrest in the United States of America.”

But today’s difficulties include an ineffective Congress and a politically divided United States. Walker referenced former Tennessee governor Bill Haslam, who had been a guest on the July 6, 2022 Walker Webcast. In discussing Haslam’s book “Faithful Presence: The Promise and the Peril of Faith in the Public Square,” Walker explained that cable television and the money behind it are fueling the political divide.  “MSNBC on the left and Fox News on the right are creating a massive divide,” Walker said. “And the problem with it is the amount of money that is involved in trying to drive the political divide wider.”

Also divided? Investment decisions.

“I feel like a lot of you are taking a long winter nap,” Walker said, with some hesitant to make investment decisions due to an uncertain future, rising interest rates and negative leverage on acquisitions. “But for every person who’s out there saying ‘I’m going to the sidelines,’ there’s somebody else who’s saying ‘yeah, we’re underwriting a 3.75 cap rate, but that’s at 3% rent growth. And we actually think we’re going to get six. Or eight,’” he continued. Waiting for inflation to go down or other more promising economic signals could make it “way too late for you to make decisions that will get you into the market,” Walker said.

He acknowledged that financing isn’t easy today. But in the multifamily space, at least, Fannie Mae and Freddie Mac have a good opportunity to step in and help. “The market is theirs, if they are going to step in and use all the capacity that they have,” Walker said.

Meanwhile, as occupiers want to put their employees into Class A office space, “it’s really hard to finance a Class C office building in a CBD,” Walker said. “Similarly, strip retail that is well-located is collecting awesome rents, but if you want to go big box, good luck.” And when it comes to hospitality, hotel owners in vacation markets might be smiling, but investors and owners owning a CBD business hotel, not so much.

“It’s really become this tale of two worlds right now in the commercial real estate space and we’re watching clients move from one asset class to the next,” Walker explained. While there is potential for repurposing—for example, Class C office buildings could be renovated into multifamily assets—Walker outlined financial and regulatory hurdles.

“If we can get local officials to allow for that to happen it could dramatically change the landscape of many urban centers in America,” he said. “But it’s a heavy lift.”

The other suggestion was that jumping on opportunities in the market requires actually being in the market. “If you had refinancing that you were thinking about doing and decided not to get it . . . you might have missed the rate rally last week from 3.2% to 2.85%,” he said. “You’ve got to stay active in the markets to be ready to take advantage of them.”

Walker concluded his talk by suggesting that attendees be actively involved in markets to take advantage of opportunities that arise. Additionally, he suggested that those in attendance use their standing and presence to exert a positive influence in their communities.

“It’s my hope that after being in Sun Valley for two days and hearing all the things that we’re talking about . . . all of you will go back and think about a balancing act, and how you can make a difference on making it work,” he said.

On-demand replays of the Aug. 3, 2022 webcast are available by clicking here and through Walker & Dunlop’s Driven by Insight podcast series.

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Walker & Dunlop's Willy Walker

About Amy Wolff Sorter

I love content. I love writing it, visualizing it, and manipulating it to fit into different formats. I have years of experience in working with content, both as creator and editor. The content I create and edit provides assistance with many goals, ranging from lead generation, to developing street cred through well-timed thought-leadership pieces. Content skills include, but aren't limited to, articles and blogs, e-mails, promotional collateral, infographics, e-books and white papers, website copy and more.

  • ◦Sale/Acquisition
  • ◦Financing
  • ◦Economy
  • ◦Policy/Gov't
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