JPC Podcast 12, Episode 2: Robert Deckey on Borrowers, Market Cycles, and Lending at the Bottom

Robert Deckey on Borrowers, Market Cycles, and Lending at the Bottom

When real estate markets enter distress, most investors focus on the asset.

Location.
Cap rates.
Occupancy.

But in Episode 2 of JPC Podcast 12, Robert Deckey makes it clear that for lenders, the starting point is different.

It begins with the borrower.

Before underwriting the building or analyzing the financial projections, lenders first evaluate the people behind the deal - their reputation, their track record, and how they behave when markets turn against them.

Because when markets become impossible, character matters as much as capital.

The First Rule of Lending: Start With the Borrower

Deckey explains that every lender eventually develops a simple internal system.

A list of borrowers they trust - and those they don’t.

Good borrowers consistently communicate with lenders, work through problems, and stay focused on solving the situation.

Bad borrowers disappear, avoid responsibility, or make problems worse.

The difference becomes most visible during downturns.

A strong borrower will collaborate with lenders to find solutions.
A weak borrower often creates additional risk.

That’s why the borrower is always the first step in underwriting.

Only after that does the asset itself come into focus.

Recognizing the Bottom of the Market

Another major theme of the episode is timing.

After living through multiple real estate cycles - the S&L crisis, the dot-com bust, the Global Financial Crisis, and COVID - Deckey explains that no one can perfectly predict a market bottom.

But there are signals.

Today’s multifamily market shows several of them:

• Apartment values have declined roughly 20%
• New construction has slowed dramatically
• Development pipelines are shrinking
• Housing demand remains strong

When supply slows while demand continues, markets eventually stabilize.

And stabilization often signals opportunity.

For lenders, the best time to provide capital is not at the peak of the market - but when prices have already corrected.

Lending at the Trough

Deckey’s strategy focuses on lending when values are down rather than when optimism is high.

During the peak of COVID-era real estate, cap rates compressed to extremely low levels and debt was unusually cheap.

That environment created risk.

Today, the conditions are different.

Values are lower.
Interest rates are higher.
Developers face refinancing pressure.

In that environment, lenders can structure loans with stronger protections, lower leverage, and better long-term risk profiles.

In other words:

The best time to lend is when the market feels uncomfortable.

When the Impossible Isn’t the Borrower’s Fault

One of the most interesting parts of the conversation explores an important question:

What does failure really mean in real estate?

Many borrowers today face impossible situations that were created by forces outside their control.

A developer in Austin might struggle because the city experienced massive overbuilding, pushing vacancy rates dramatically higher.

A landlord in New York might face collapsing property values because government rent reforms changed the economics of rent-stabilized housing.

In both cases, the borrower may have done everything correctly.

But external forces reshaped the market.

Understanding that distinction is critical for lenders.

The goal is not simply to punish borrowers - it is to find solutions that allow projects to survive long enough for markets to recover.

Final Thought

Real estate cycles test everyone.

Borrowers.
Lenders.
Investors.

The difference between success and failure is often not the asset itself, but the people managing the situation.

Good borrowers adapt.

Good lenders recognize opportunity when others see only distress.

And when the market feels most uncertain, those partnerships become the key to confronting the impossible.

🎧 Watch Episode 1

Watch Episode 2 with Robert Deckey for a powerful discussion on borrower discipline, market cycles, and the real strategy behind lending at the bottom.

PODCAST - Confronting the Impossible with Leo Jacobs.

Leo Jacobs, Founder and CEO of Jacobs PC

Known for finding creative, expedient solutions to complex and high-profile cases, Leo excels in matters including distressed investment and asset management, real estate law, corporate law, dispute resolution, business divorces, negotiation, and more. Leo’s extensive expertise in debt and equity structures enables him to employ a full spectrum of legal tools to achieve swift, optimal results for clients. His practice, Jacobs P.C., bridges commercial litigation, corporate transactions, and financial rehabilitation, handling cases across federal, state, and bankruptcy courts, as well as administrative tribunals.

If you would like to join the podcast email requests to pr@jacobspc.com