Twenty Years on the Other Side of the Table

Most sponsors are guessing at what institutional investors look for in multifamily deals — piecing it together from the outside, without ever hearing what a pension fund, endowment, or RIA actually wants to see before it writes a check. At our most recent Investor Power Hour, we sat down with Dexter Campbell, who joined Disrupt Equity’s capital markets team after more than 20 years on the other side of that table — first in real estate debt, then on the acquisition side at GE Capital, and more recently leading capital formation at several sponsorship platforms, where he was the person going out and raising LP equity for large-scale acquisitions and development deals across the country. (See Dexter’s full Interview on Investor Power Hour)

We asked him to walk through how institutional underwriting has changed since rates rose, what actually gets a deal rejected, and how family offices, RIAs, and institutions differ in what they look for. His answers are a useful checklist for any sponsor trying to understand the other side of the table.

How Institutional Underwriting Has Changed

The biggest shift Dexter has seen isn’t a new metric or a new model — it’s how much time institutional investors now spend testing the assumptions underneath a sponsor’s numbers.

“A lot more time is being spent fact-testing, if you will, the assumptions. Do we believe in the rent growth? Do we believe in the cap rate compression? A lot of institutional investors are now spending time really trying to make sure they believe in that information.”

That scrutiny extends to the sponsor’s own diligence process. Institutional LPs increasingly want to see that a sponsor has already stress-tested their own assumptions before the deal ever reaches an investment committee — because, as Dexter put it, those assumptions are the business plan. If they’re off, the expected cash flows and returns don’t hold.

The Checklist Institutions Actually Use

Asked what separates a deal that clears an institutional investment committee from one that doesn’t, Dexter came back to a consistent set of filters:

Alignment first. Institutional equity wants to see real GP capital at risk alongside their own — skin in the game, not just a fee-generating sponsor structure.

Leverage discipline. Is the capital stack over-levered, or reliant on floating-rate debt to hit target returns? Dexter described wanting to see deals underwritten with a more conservative leverage plan rather than one that’s been “financially engineered” to produce a headline number.

Assumption sanity checks. Rent growth, expense growth, and exit cap rate assumptions need to be in line with market standard, not the upper end of what’s theoretically possible.

“A rent growth assumption of 5% per year, for example, probably feels a bit too aggressive, especially when the market is producing two to three.”

He also flagged operating expense line items — insurance in particular — as an area sponsors frequently underwrite too optimistically, which then becomes a point of concern when institutional reviewers stress-test the downside case.

Where Deals Actually Fall Apart

Dexter shared two real examples of deals that looked strong on paper but didn’t clear institutional diligence — both from his time prior to joining Disrupt.

In the first, he was working on a large-scale recapitalization where the headline numbers looked compelling until the team refreshed the underlying cash flow data. Once more recent performance came into view, the deal quickly fell apart — a reminder that a pro forma is only as good as how current and defensible its inputs are.

In the second, the concern wasn’t the numbers themselves but where the return was coming from. A deal that relied heavily on a favorable exit or refinancing outcome — with the bulk of the projected return back-end-loaded — drew pushback from investors who preferred to see durable income delivered throughout the hold period, rather than a return that depended almost entirely on how the deal was executed at the very end.

“One of the best ways to raise capital is to de-risk the deal as you go. And I think one of the best ways to do that is to produce durable income where people can feel like they’re getting paid.”

Family Offices, RIAs, and Institutions: What’s Different

Across every type of capital source, Dexter said the fundamentals are the same: team, theme, and track record are the first things any investor evaluates. Beyond that baseline, the three groups diverge in what they weight most heavily.

Family offices place a premium on relationship and responsiveness — the sponsor is often speaking directly with the end investor, so trust and personal rapport carry real weight. RIAs evaluate a deal through the lens of portfolio construction: how does this investment thesis fit within a client’s broader asset allocation, and does it offer something idiosyncratic — like durable cash flow or a tax-advantaged structure — that their existing holdings don’t. Institutional investors, particularly tax-exempt entities, apply the most process-driven filter: reporting standards, compliance, legal and risk infrastructure, and increasingly ESG considerations all factor into what a committee needs to see before signing off.

Quantitative vs. Qualitative: It’s Closer to 50/50 Than You’d Think

Asked how much of institutional underwriting is quantitative versus qualitative, Dexter resisted a precise number but offered a useful rule of thumb.

“Certainly the quant kind of gets you in the door… I would say at the minimum it’s 50/50, probably 60/40 in some direction.”

In other words, a strong return profile opens the conversation, but team quality, alignment, and operational infrastructure are what actually close it.

Advice for Sponsors Preparing to Raise Institutional Capital

Dexter’s core advice to sponsors: get ahead of the questions before they’re asked. That means building out real comp data for both rent and exit assumptions, scrutinizing every operating expense line item, and using internal portfolio data to sanity-check projections against what’s actually achievable in a given submarket.

“We’re basically asking people to trust us with large sums of capital… We want to make sure we can provide the answers in a thoughtful, seamless fashion so they can derive the appropriate level of confidence, because we’re going to be stewards of this capital for at least three years, if not longer.”

On outreach specifically, Dexter said relationship-driven introductions consistently outperform cold outreach — institutional and family office investors alike respond better to a warm introduction, or simply the unglamorous work of building a relationship over lunch or coffee before there’s ever a deal on the table.

Do Your Own Due Diligence Before They Do Theirs

The throughline across everything Dexter shared is that institutional capital isn’t evaluating deals on returns alone — it’s evaluating whether a sponsor’s assumptions hold up under scrutiny, whether the capital stack is conservatively structured, and whether the sponsor has built the reporting and governance infrastructure to be a responsible steward of capital for the life of the hold. For sponsors, the takeaway is straightforward: the diligence institutional investors will eventually do is diligence worth doing on yourself first.