Fundrise CEO Ben Miller is joined by Schecky Schechner, Managing Director and Co-Head of US Real Estate Banking at Barclays Capital, for a wide-ranging and technically insightful conversation in this latest episode of Onward. In addition to his current role, Schecky has previously held major positions at Goldman Sachs, JP Morgan, and Lehman Brothers, equipping him with decades of experience regarding the banking sector, patterns in the real estate industry, and the nature of the broader American economy. In addition, as Ben points out, Schecky is credited as one of the co-inventors of Commercial Mortgage-Backed Securities (CMBS) in the wake of the S&L crisis in the late ‘80s, a securitization innovation that has since become a trillion-dollar system, earning Schecky his reputation as a living legend in the real estate world.

Ben and Schecky’s conversation opens with a broad discussion on the current state of the market — primarily, the timing along which Schecky expects interest rates to stabilize, and how that expectation will impact transactions over the next year. They then move into a recap of our “Great Deleveraging” thesis, previously explored in-depth in Onward Episode 10, and evaluated by Schecky here, informed by his vast experience in the banking world. When Ben asks how Schecky would invest a billion dollars today, he replies, “If you had a billion dollars right now, it's filling this gap that's going to be caused by what you call The Great Deleveraging. People are gonna need that money.”

The conversation goes on to cover a number of additional topics and key financial ideas, including:

  • How a change in interest rates impacts both buyers and sellers, and their desired timing for making deals.
  • The history and thought process that led to the securitization of mortgages.
  • How securitization is a democratizing force in financial markets, causing a profound, secular change in who can access money.
  • Why the late 1980’s were “the Big Bang” for real estate finance, leading to public REITs, CMBS, real estate private equity, and more.
  • The fact that there’s a playbook for how to behave during each stage of a market cycle — and why so few people are actually able to follow that playbook.
  • Why the idioms “A rolling loan gathers no loss,” and “Extend and pretend,” might have a major impact on the American economy over the next twelve months.
  • And much more.

Join us for this latest episode of Onward anywhere that you listen to podcasts.