Refinancing Challenges, Cap Rate Shifts, and Market Realities

Episode Overview

In this episode of the Ironclad Underwriting Podcast, host Jason Williams welcomes returning guest Frank Patalano for a deep dive into the current challenges facing commercial real estate investors. From refinancing hurdles and cap rate expansion to rising insurance costs and shifting debt service coverage requirements, Jason and Frank break down how today’s unpredictable market is impacting deals, underwriting strategies, and investor expectations. They share real-world examples, lessons learned, and practical advice on navigating this volatile landscape while keeping long-term goals in sight.

Topics Covered

• Cap rate expansion and its impact on property values
• Refinancing challenges and the rise of cash-in refinances
• Interest rate hikes and their ripple effect on underwriting
• Insurance and tax increases altering projections
• Debt service coverage ratios and lender requirements
• Balancing conservative vs. aggressive underwriting in today’s market

Key Quotes

• "Underwriting is not perfect; you have to go with your best assumptions, but even markets are screwing everybody over."
• "There are many people in much worse shape because they were not figuring in cap rate expansion, and that’s why some are just turning in keys."
• "Real estate is not a short-term game. If you can weather this storm, you will probably find light afterward."

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🎧 Connect with Frank:

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