PassivePockets: The Passive Real Estate Investing Show The Capital Stack Is Cracking: Eric Sussman on What LPs Need to Know
Jul 8, 2025
Eric Sussman, a seasoned real estate investor, CPA, and UCLA professor, offers valuable insights on the shifting dynamics of capital markets. He discusses the impact of inflation, rate policy, and lending trends on investors and sponsors alike. Eric explains why misaligned capital stacks can affect passive investors and emphasizes the importance of trust and disciplined underwriting. He provocatively argues that some deals should fail to ensure a healthier market long-term, shedding light on how institutional players are preparing for potential distress.
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Fed vs Treasury Rates Impact
- The Federal Reserve impacts the short-term Fed funds rate, affecting variable loans in real estate.
- Treasury rates influence long-term fixed-rate financing and are affected indirectly by Fed policies and budget deficits.
Uncertainty Hinders Investing
- Uncertainty pervades real estate and macroeconomics due to political, consumer, and policy factors.
- Investors tend to sit on the sidelines during such prolonged uncertainty, reducing transaction volume.
Strained Consumer Limits Rent Growth
- Consumer financial strain limits growth in rents despite inflation pressures.
- Rising loan delinquencies underline the fragile financial health of many renters and buyers.
