Making Markets · Colossus | Investing & Business Podcasts

Darren Fisk: Navigating Real Estate Cycles - [Making Markets, EP.65]

·1 hr 10 min·4 clips

2008 had rates, values, and income all falling; this cycle did not.

Eric Golden opens by framing markets as places where psychology and structure keep colliding. He brings on Darren Fiske, founder and CEO of Forum Investment Group. Fiske's path into business starts with a late-night $100 bet in a frat house. That leads into Division I football and, later, into building a national real estate platform. The interview keeps circling back to how markets actually work when money changes hands. Fiske explains what he means by a fundless sponsor. A sponsor may need to raise the last 10 percent of equity behind a larger partner's capital. That money often comes from friends and family rather than from the sponsor's own balance sheet. The setup only works if the sponsor keeps doing deals. In that way, the structure depends on activity in both good markets and bad ones. Golden and Fiske then turn to the recent value-add cycle in multifamily. Fiske says many operators bought assets, improved them, and then got caught when rates moved higher. Floating-rate debt made the problem worse. As rates rose, values fell. Deals that once looked manageable became stuck. He treats that as a cycle problem as much as a structural one. The conversation widens from one sponsor's balance sheet to the state of the consumer. Fiske argues that households are stressed, and the strain shows up across more than one corner of the economy. He points to weak single-family and multifamily starts, high car financing costs, and the fact that most people are not eager to give up a 3 percent mortgage for a 7 percent one. Golden presses on whether the market was heading for a broader credit break. Fiske suggests that credit pressure can spread beyond real estate because debt sits underneath so much of the system. He sounds like someone watching the reset happen in real time. By the close, he says it is time to go on offense again. He believes the fear has done its work and that the market is finally ready to buy. His final read on multifamily lands somewhere between optimistic and excited.

As heard by us

A clear look at how rate shocks reshape multifamily real estate and operator behavior.

Darren Fiske and Eric Golden keep the discussion anchored in the mechanics of multifamily real estate: how capital gets assembled, why floating-rate debt made value-add deals fragile, and how rising rates force the math to reset.

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Why you'd press play

You want a blunt read on multifamily when leverage stops working.

Read the full recommendation in PlayNext →

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