Navigating the Capital Raising Landscape After the Syndication Shakeout

Written by:

Steve Marcinuk

Date:

27 Jun 2025

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The multifamily syndication market has changed significantly over the past two years, leaving many investors and capital raisers reassessing their strategies. While headlines have focused on failed deals and inexperienced operators, a more nuanced picture emerges when examining how seasoned professionals are adapting to the new reality.

Dave Dubeau, Host of the Property Profits Real Estate Podcast and Owner at Results Enterprises, runs a consultancy helping capital raisers connect with accredited investors and has witnessed this progression firsthand. His unique vantage point, facilitating connections between capital raisers and potential investors, offers insights into both sides of the equation during this challenging period.

The Market Correction’s Impact

The recent market correction has separated experienced operators from newcomers who entered during the boom years. “It has kind of washed out a lot of the not very professional, not very experienced syndicators,” Dubeau observes. “Their ships have sunk. So a lot of deals, unfortunately, have gone south.”

This shakeout, while difficult for investors caught in failed deals, has created a clearer distinction between operators with staying power and those unprepared for market volatility. Survivors are now working through challenges including loan forbearances, bank negotiations, and higher costs for rate insurance and other protective measures.

However, the broader impact extends beyond individual deals. “The biggest impact it’s having is trying to raise capital for new deals, because once bitten twice shy, a lot of people that have had bad experiences with syndications aren’t going to come anywhere near them for a while now,” Dubeau explains.

Identifying Quality Operators

For investors looking to distinguish between trustworthy syndicators and those to avoid, Dubeau emphasizes the importance of experience and conservative underwriting. “At the end of the day, it really comes down to longevity,” he notes. “If you’re working with somebody who’s been in the business for six months, that’s unfortunately a big red flag.”

He looks for operators who maintain realistic expectations rather than promising outsized returns. “Always be concerned when people are just over hyped and just painting everything to be all roses and no manure,” he advises. “I look for people that tend to do their best to under promise and over deliver, that underwrite very conservatively, that aren’t promising pie in the sky kind of returns and super fast, quick turnaround.”

Strategic Adaptations

The current environment has prompted various strategic shifts among capital raisers. Some are switching asset classes, moving away from multifamily investments. Others are exploring development opportunities, though tariff uncertainties and policy changes add complexity.

Many experienced operators are positioning themselves for opportunities that may emerge from current distress. “Several of our clients are kind of waiting in the wings for opportunities to come down the pipeline, seeing that a lot of these not so experienced syndicators are getting into some big trouble,” Dubeau reports. Industry conversations increasingly focus on 2026 as a potential year for acquiring quality assets at attractive prices.

Shifting Investor Strategies

The challenge of raising capital has led to a shift in how syndicators approach investors. Rather than targeting experienced multifamily investors who may have been burned, many are now focusing on educating new investors who haven’t previously participated in syndications.

“In the past, they’ve been focusing on accredited investors who already have experience in multifamily syndications,” Dubeau explains. “Well, now a ton of those people are turned off by the asset class, justifiably, because they’ve lost money.”

This approach requires more education and relationship building, but it presents an opportunity to set proper expectations from the beginning. By showing new investors “the good, the bad, the ugly” of syndications and maintaining conservative projections, operators can build more sustainable investor relationships.

The Role of Technology in Relationship Building

Dubeau’s consultancy leverages podcasting as a primary tool for connecting capital raisers with potential investors, creating what he calls a “lead with giving hands” approach. Rather than pursuing traditional sales presentations, this method provides value upfront by offering guests a platform for exposure and expertise sharing.

“You’re attracting people to you instead of chasing after them,” he explains. “The connection is different. Instead of having convinced somebody to join you for a sales presentation, you’re actually giving them value.”

This approach reflects a trend toward relationship-based capital raising, where trust and education take precedence over aggressive sales tactics. The method has proven particularly effective in the current environment, where investor skepticism requires more thoughtful engagement strategies.

Looking Ahead

Political and economic uncertainties continue to influence market dynamics, with policy changes around tariffs and immigration creating additional variables for real estate investors to consider. “President Trump and all of his tariffs and everything like that, and immigration policies, I am interested in seeing how that shakes out over the next six to 12 months,” Dubeau notes.

Despite these uncertainties, the fundamental appeal of multifamily real estate remains intact for long-term investors working with experienced operators. The current distress and consolidation may ultimately strengthen the industry by establishing higher standards for due diligence and operator selection.

For capital raisers who survive this challenging period, the experience will likely result in more sophisticated approaches to underwriting, investor relations, and risk management. Those who can navigate the current environment while maintaining investor confidence will be well-positioned for the opportunities that emerge as markets stabilize.

The syndication industry’s evolution reflects broader themes in real estate investment: the importance of experience during volatile periods, the value of conservative underwriting, and the need for transparent communication with investors. While the recent shakeout has been difficult for many participants, it may ultimately lead to a more professional and sustainable industry structure.