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Malcolm Davies
Capital advisor, entrepreneur, and fellow Wildcat
As Founder and CEO of WAY Capital, Malcolm Davies has spent more than 26 years shaping commercial real estate finance, advising on and participating in more than $20 billion in debt and equity financings. A former developer and award-winning capital advisor, he has been repeatedly recognized as a GlobeSt. Rainmaker in Debt & Equity Finance.
WHAT'S YOUR PROBLEM? I’m Gumby
I’ve lived through several real estate cycles, first as a developer and now as a capital advisor, and this one is different. We are in the long, grinding process of deleveraging commercial real estate.
The Global Financial Crisis was violent, but fast. Values collapsed, and within a few years the path forward came into view. This cycle has been the opposite: less dramatic on the way down, but far more punishing in how long it has lasted. For four and a half years, rising interest rates, higher operating costs, and cap rate expansion have squeezed debt and equity alike. Deals still get done, but the margin for error keeps getting smaller.
I have never seen the tension between debt and equity stretched this far. My podcast is called On the Edge, and that’s exactly where every closing lives now. A few basis points, a tightened covenant, or a softer appraisal can reduce loan proceeds or turn a refinance into what every borrower dreads: a cash-in.
So here is my problem. I’m Gumby, pulled from both ends. On one side is a lender who won’t stretch; on the other, a borrower who wants a cash-neutral refinance. We spend enormous energy making the case for the strength of the business plan, the durability of the market, and the property's potential over the next loan term.
That’s my problem. It’s also why I exist. I’m Gumby, and I’m glad to be stretched. This is the kind of market where the right advisor earns their keep.
Malcolm's perspective is one example of the challenges facing today's real estate market. And one of the biggest challenges? Finding the right capital and the right people to make a deal happen.
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