Connect CRE
Sep 3, 2025
In the second article of Connect CRE’s 2025 Leadership Series, we asked C-suite executives what alternatives they see to waiting it out amid the current market volatility.
In the second article of Connect CRE’s 2025 Leadership Series, we asked C-suite executives what alternatives they see to waiting it out amid the current market volatility. As it turns out, sitting on the sidelines isn’t really a viable strategy as far as they’re concerned. Keep reading for insights on taking a proactive approach from Tyler Chesser, Co-Founder & Managing Partner – CF Capital; Jim Dillavou, Principal, Paragon Commercial Group; Annemarie DiCola, CEO, Trepp; and Gregory MacDonald, CEO, Ballast Investments.
Considering current market volatility, what proactive hedging strategies could CRE investors employ beyond simply waiting?
Jim Dillavou: This question implies market volatility is negative. We disagree. Paragon was founded in 2009 (during the GFC) on the simple premise that volatility resulting in repricing creates opportunity. Historically, capital flows into commercial real estate tend to seize during market volatility and, conversely, flow when ostensible “predictability” enters the market. While this macro investment strategy may be relevant for more liquid investments or securities, it is the wrong rubric for an inherently illiquid and long-term asset class like commercial real estate. To answer the question more directly, then, with increased volatility should come a decreased appetite for hedging and an increased appetite for long term investment into repriced CRE opportunities.
More specifically, Paragon’s investment analysis is rarely focused on the near term. Instead, we analyze long term macro-economic indicators (market fundamentals, demographic trends, changing consumer behaviors, etc.). Alongside underwriting metrics that have historically been strongly correlated to long term investment durability in the necessity retail sector (stabilized return on cost, cash flow, etc.). Our goal here is to never have pressure to sell so that we could sell – if we so chose – on our terms and timing. This is why Paragon has owned numerous assets for over a decade.