Livingston Hessam, Senior Director, Walker & Dunlop

In an interview with Invest:, Livingston Hessam, senior director of commercial real estate finance and advisory services firm Walker & Dunlop, talked about the trends impacting the multifamily space and the success of the live-work-play model in the Tampa Bay market. “The opportunity to mix new multifamily development with retail and other product types to create a destination has proven to be successful in Tampa Bay,” Hessam said.

What were some key milestones for Walker & Dunlop over the past year?

In the past year, we closed more than $1 billion across 24 transactions throughout Tampa Bay in all product types. This accounted for 3% of the entire transaction volume as a company, which is significant. We finished 2024 as the No. 1 Fannie Mae lender for the sixth consecutive year.

What factors set Walker & Dunlop apart?

We have nearly 1,400 employees and closed a total $40 billion in transaction volume in 2024. We have large scaling abilities but operate with the approach and efficiency of a small, family-owned company. The ability to move quickly and make decisions coupled with the diversity of our team and our technologies sets us apart from other large competitors in our market, locally and nationally. We are one of the largest multifamily lenders in the country and we leverage this expertise to drive change in the industry. 

What trends are impacting the multifamily investments and sales landscape?

Investor demand in the multifamily segment remains high. Interest rates continue to present a challenge as they have doubled in the past two to three years while cap rates have not adjusted to the same degree. This shows that there is still a strong interest in multifamily properties. Investment sales transactions have slowed down significantly. It remains hard to get positive leverage when you are trying to buy a multifamily asset. Additionally, the 10-year Treasury yield, which is the benchmark in our industry, has remained volatile over the past two to three years, which makes it hard to predict interest rates and how to plan for the insurance component as well. 

Interest rates alone are challenging when they move as quickly as they have been, but insurance, especially in Florida, impacts every aspect of the industry, not just multifamily. It impacts short- and long-term financing. As a result, interest rates and insurance have slowed transaction volume. However, despite the current challenges, there are still transactions being done and there is more capital available today than I’ve seen in my 20-year career. There is capital waiting and some of it is being deployed. The funds that were raised and the institutions handling these funds need to deploy the money. However, it is just going out slower due to the current correction cycle. 

What factors are shaping the financing component in the local market?

There is more demand for short-term bridge loans. These are two- to three-year floating rate loans that allow for more runway in order to execute a shifting business plan, given the current environment. For example, with a new construction multifamily project that’s experiencing challenges in leasing, insurance, and business costs, a bridge loan provides the project to with additional time as conditions improve. There is more capital in the bridge loan space today than in any other space because this is where the majority of the demand is. 

What asset classes are driving the local market?

We are seeing many retail transactions take place mostly in the grocery-anchored strip shopping centers and not necessarily in retail malls. Some of the larger malls are being marketed for redevelopment. We are seeing demand for the community shopping centers primarily because the fundamentals are strong and there is more opportunity for positive leverage and upside. 

Regarding the multifamily sector, it has slowed down compared to 2020 – 2022, where the investment sales activity was at an exceptional pace. It was a flurry of activity back then. We are now seeing investment sales volumes comparable to the pre-COVID era. We have also seen hospitality sales pick up while industrial has remained flat. With office space, that segment continues to remain in a holding pattern. The bulk of the activity for finance and investment sales is focused on multifamily, retail, and industrial today. 

How would you characterize the success of live-work-play projects in Tampa Bay?

We are seeing more large mixed-use projects that feature residential, retail, office, and hospitality components. These projects create the desired live-work-play and shop environment as seen by the success of Midtown, Water Street, and the Gas Worx project, for example. These are major projects that have successfully opened in the past few years. The opportunity to mix new multifamily development with retail and other product types to create a destination has proven to be successful in Tampa Bay. Moving forward, the live-work-play model will help reduce traffic and shorten commutes because as ongoing growth has certainly stressed the local infrastructure in the region. 

What factors can be leveraged in creating more affordable housing? 

For one, we try to leverage Qualified Opportunity Zones. We have been involved in many projects within these zones in the Southeast. In these types of deals, the local municipalities have been motivated to see them completed as these projects often have multifamily and workforce housing components. The municipalities generally assist with land acquisition and provide tax increment financing or with other tax strategies. Today, there needs to be a public-private partnership to successfully build workforce housing because of the rising construction costs, as well as insurance and interest costs. Working within Opportunity Zones is a key factor. Within the firm, we work with HUD, Fannie Mae, and Freddie Mac to create more financing products geared toward affordable housing. 

What are the top priorities for Walker & Dunlop moving forward?

We will continue to use our leadership position to drive change in the industry. We have developed verticals to offer financing for all types of assets, not just multifamily. We want to bring the full scope of our platform to our clients so we can assist them in growing their businesses and finding creative solutions for what remains a very challenging environment. We will continue to do development and bridge lending, permanent lending, investment sales, and advisory services. Our goal is to grow our brand awareness and market share in Florida and beyond. Affordable housing continues to be a focus as well because it continues to be a major challenge. We want to continue to use our platform to drive change in the industry.