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Marcus Duley, CIO, Walker & Dunlop Investment Partners weighs in on how rate hikes are impacting CRE

Marcus Duley, chief investment officer of Walker & Dunlop Investment Partners, said that the cost of debt capital has risen and is expected to continue to rise for both floating-rate loans and fixed-rate loans, as a result of actual and expected increases.

“[The higher interest rates] are translating into lower loan proceeds—lower loan-to-value and loan-to-cost—due to lender sizing constraints associated with minimum debt service coverage ratio requirements and higher underwritten exit test parameters,” Duley said.

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