Understanding Debt Service Coverage in CRE

This chapter explores debt service coverage ratios in commercial real estate, detailing their significance across various asset classes and the impact of market conditions and rising interest rates. It also addresses challenges like unplanned capital calls and emphasizes the importance of investor rights and potential dilution scenarios.

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Trey brings back TIP fan favorite, Mr. Ian Formigle. Together they discuss the future of office and retail, the risks of capital calls in a downward market, and much more.

Ian is the Chief Investment Officer of Crowdstreet and our go-to expert on all things real estate, especially commercial real estate.

IN THIS EPISODE, YOU'LL LEARN:

00:00 - Intro

08:32 - Ian’s outlook for 2023, especially as it pertains to the risks surrounding bank failures and other illiquidity issues.

15:01 - How interest rates and cap rates affect one another.

18:58 - Which asset class has the most upside opportunity at the moment and which strategies will be most optimal.

35:05 - Ian’s predictions on the future of office and retail.

01:18:35 - The risks of capital calls, especially in a downward market.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Related Episode: Listen to TIP423: Real Estate Update w/ Ian Formigle, or watch the video.
Related Episode: Listen to TIP337: How to Identify Value in Commercial Real Estate w/ Ian Formigle, or watch the video.
Check out Crowdstreet.
Trey Lockerbie's Twitter.
Ian Formigle's Twitter.

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