👋 Happy Sunday, Best Ever readers!

In today’s newsletter, location takes a back seat, robot builders arrive, renters want transparency, storage slides, beds sit empty, and much more.

Today's edition is presented by Crystal Peak Capital. While rents fell and occupancy dipped below 95% across the South, Midwest rents grew 1.7% with occupancy holding around 96% or higher. Crystal Peak focuses on this resilient market while underwriting for what happens when conditions change. Learn more.

⏳ Best Ever Pitch Slam LIVE is just 3 days away, with $28.3 million in CRE deals heading before seven judges who've collectively raised $134M+ in capital. Think you can pick the winner? Register free and cast your vote →

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🤖 Robot Builders: BlackRock has backed a $200 million round for 3D-printing builder ICON, which will sell its Titan system to contractors for about $899,000 starting in early 2027. ICON estimates Titan could cut multistory wall costs 40% and shave six weeks off homebuilding.

🧾 Renter Requests: New AI-powered rental search data has given operators a first look at what renters ask before reaching out, from fees to income requirements. Some 94% want all fees disclosed, and listings that spell out income requirements have drawn 10% more leads.

📦 Storage Slide: Slower construction has yet to lift self-storage pricing. Rates fell 1.8% YoY in September, and only Austin and New York City posted annual gains among the top 30 metros. REIT asking rates are down 3.3% YoY, versus 1.0% for other operators.

🛡️ Coverage Costs: Apartment insurance costs fell 2.2% in 2025 after five straight annual increases, but they remain more than double 2019 levels. Insurance now eats $4.02 of every $100 in apartment revenue, up from $2.39, because revenue never kept pace.

🏷️ Fewer Freebies: Concession use has fallen four straight months to 14.5% of stabilized apartments, according to RealPage, but the average discount has edged up to 11.1%, tying a 15-year high. Owners appear to trim which units get incentives before shrinking the discounts.

🏆 TOP STORY
WHY SOME EMPTY INDUSTRIAL BUILDINGS STAY EMPTY

Industrial demand is back, and Colliers’ national director of industrial services has a short list of what separates the buildings that lease from the ones that sit empty.

Tenants absorbed 59M SF of space in Q2, more than double the total a year earlier, and demand outpaced new supply for the first time since 2022. Vacancy slipped to 7.3%. The pipeline has also grown for two straight quarters, so more new space is on its way to compete for those tenants.

This week on the Best Ever CRE Show, Colliers’ Stephanie Rodriguez joined Ash Patel to break down the industrial market. She says big buildings are leasing again, with demand for 250,000 SF and up picking up over the past 12 to 18 months. She also walked through what she looks for in a building now.

• Power Comes First: The golden rule used to be location, location, location, Rodriguez says. In many markets, she now sees power come first and location second. Even warehouses need more than they used to, as automation spreads and electric fleet vehicles need charging.

• Clear Height Depends on the User: For general distribution, she considers 30 feet of clear height or less obsolete, since taller ceilings fit more storage into a smaller footprint. Manufacturers don’t need that height, so an 18-foot building can still find the right owner-operator.

• Plants Run Late: Demand does follow an announced factory, she says, but plants can open years behind schedule. Intel announced its first Ohio chip plant in 2022 and now expects to finish construction in 2030. Micron pushed first production at its New York megafab from 2028 to 2030. “The last thing you want is a facility to be announced, and then all of a sudden it’s delayed by three years,” she says.

Location still decides a lot. Rodriguez points to stabilized vacancy across the Midwest, which posted the lowest rate of any region in Q2 at 5.4%. Austin, Charleston, Phoenix, Boise, Reno, Las Vegas, and Florida’s Treasure Coast are still absorbing a wave of new product. For a vacant Class B building, she also sizes up the competition. “Is this a one-off or are there 10 of these floating around out there?” she says.

THE BOTTOM LINE

Speculative construction peaked in 2022 and 2023, and Rodriguez says it’s picking up again in markets that have stabilized. That puts the next wave of space up against buildings already on the market. The ones best positioned have enough power, the right clear height for their likely tenant, and few look-alikes nearby. Owners betting on a new plant may carry their buildings for years before it opens.

👉 Listen to the full episode here.

🤝 TOGETHER WITH CRYSTAL PEAK CAPITAL
MIDWEST RENTS ARE RISING. THE SOUTH? NOT SO MUCH.

Every multifamily return starts with occupancy and rent. For the year ending Q2 2026, Midwest rents rose 1.7% with occupancy at roughly 96% or above, while Southern rents fell 1.9% and occupancy sat below 95%.

Crystal Peak Capital invests where both held, buying Class B and C+ value-add multifamily properties in Cincinnati, Columbus and Dayton.

Founder Scott Fratianne sat in the investor’s seat first, as a limited partner in others’ deals. He built CPC as the general partner he wanted.

Before real estate, he spent thirty years in B2B software, fifteen building global partner programs at Zendesk, Pipedrive, SugarCRM and PandaDoc, deciding whom to trust with revenue. CPC picks its partners the same way.

He is also a commercial pilot who sets his limits on the ground. CPC underwrites that way: conservative assumptions stress tested for the bad year, and hard limits it won’t trade for price.

Join the free CPC Investor Club below for research, investor guides and access to opportunities. Offerings are for verified accredited investors under Reg D 506(c).

💰 CRE TRENDS
MORE BEDS, FEWER STUDENTS, AND 18,500 MORE COMING

Some college towns now have more student beds than they can fill. Developers delivered more than 31,000 off-campus bedrooms in 2026, up 20%, and the newest buildings are taking the hit. Properties completed this year averaged 84.1% occupancy in September, versus 95.3% for 2025 deliveries a year earlier. Roughly one in six new beds sat empty.

The pain is heaviest where the cranes are still up. The 10 markets with the most 2026 deliveries lost 300 bps of occupancy, to 92.8%, and have another 18,500 bedrooms under construction for 2027. Yardi Matrix says that pipeline could extend the slump.

• The Deepest Pipelines: Texas A&M has 5,365 beds under construction, the most among major markets Yardi breaks out, after occupancy slid from 97.7% in 2024 to 90.1%. Purdue’s occupancy fell to 88.2% from 94% as rents dropped 8.2%, with 3,673 more beds coming.

• One Opening Can Do It: North Carolina State has fewer than 1,000 beds coming in 2027, but a single 2,195-bed community opened this year. Occupancy fell to 81.3%, and rents dropped 3.3%.

Some of the best rent growth is happening where nobody rushed to build, at smaller schools with limited off-campus supply and little new development, including Oklahoma State at 11.4%. For operators, the pipeline shows who’s coming next year, and the last opening shows how fast a market can absorb them.

🎤 BEST EVER PITCH SLAM
3 DAYS LEFT UNTIL $28.3M IN CRE DEALS FACE THE JUDGES

Four operators. Four real investment opportunities. $28.3 MILLION in combined target capital raises.

This Wednesday, October 28, they're stepping into Best Ever Pitch Slam LIVE to make their case before seven experienced capital allocators who've collectively raised more than $134 MILLION over their careers.

Each operator has just 4 minutes to pitch and 5 minutes to answer the tough questions. The judges will decide which deals are worth pursuing, and YOU get to vote alongside them.

Multifamily. Industrial. 55+ housing. One champion.

Think you know which deal deserves to win? Come prove it.

🗺️ ON THE MAP
10 CITIES WHERE RENTERS HAVE THE UPPER HAND

This week’s podcast moved up to the Top Story, so this weekend we’ll leave you with a look at where renters hold the most leverage in 2026, and what it means for owners.

Many of the best places to rent in America are also some of the toughest places to push rents. Apartment List’s 2026 Best Cities for Renters scored 71 cities on everything from rent to jobs to weather, and most of its Top 10 are soft markets.

The national backdrop favors renters. Rents are down 0.4% YoY, a slide dating to mid-2022, and steep discounts are common. Austin rents sit more than 20% below their peak, while San Francisco rents jumped 26% in a year.

1. Austin, TX: Renters hold the cards here, with 9% vacancy and more than half of apartments offering over a month free. The city ranks No. 1 for economic opportunity.

2. Salt Lake City, UT: No city in the ranking gives renters more leverage. Rents are down 3.2% YoY, and 61.6% of properties offer a month or more free.

3. Charleston, SC: Rents are rising here, up 2.9% in a year. Renters keep coming anyway, drawn by 6,500 new jobs in three years, the fastest growth in the Top 10.

4. Seattle, WA: Rent is steep, at a $2,088 median, but strong incomes keep it manageable. New supply has pushed rents down 2.8% YoY.

5. Arlington, VA: Rent runs nearly double the national median, but a $107,656 median renter income helps cover it. It’s also the most competitive market in the Top 10.

6. Charlotte, NC: A building boom has pushed vacancy to 9.4%, and 57% of properties offer a month or more free. Only Salt Lake City gives renters more leverage.

7. Raleigh, NC: One of the country’s strongest job markets meets a softening rental market. Vacancy sits at 8.1%, and rents are down 1.1% YoY.

8. Atlanta, GA: Rents have barely moved, yet 47% of properties offer a month or more free. Renters get some of the best-equipped buildings in the Top 10.

9. Phoenix, AZ: Renters face less competition here than anywhere else in the Top 10, and rents are down 2.9% YoY. No city on the list gets more pleasant-weather days.

10. Nashville, TN: Renters can still find bargains, with 8.1% vacancy and rents down 2.3%. Early signs point to tightening, and only Arlington has more urgent renters.

For operators, the ranking maps where renters hold the most leverage. Seven of the 10 markets posted falling rents, and in most of them, at least four in 10 properties offer a month or more free. Charleston, Arlington, and Nashville show where pricing is firming. Austin and Raleigh pair soft rents with two of the list’s strongest job markets, the kind of demand that can eventually absorb today’s supply.

👋 Hello, Best Ever readers!

In today’s newsletter, manufactured housing beats multifamily, big banks take L’s, BTR gets a bump, capital loves retail, industrial flies high, and much more.

Today's edition is presented by Gelt, a tech-enabled tax advisory firm for real estate investors. If you're closing, refinancing, or selling before December 31, the tax side of that deal is still yours to shape. After closing, it's just paperwork. Talk through a deal before it closes.

🚨 Pitch Slam LIVE returns October 28. Four operators with $28.3 million in combined target raises. Seven judges who've collectively raised over $134 million in capital. You get a front-row seat AND a vote. Reserve your seat.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏘️ BTR Unlocked: HUD has made build-to-rent communities eligible for FHA-insured financing through its 221(d)(4) new construction and 223(f) acquisition and refinance programs. BTR communities of single-family homes, duplexes, and triplexes now qualify on the same terms as apartments after years of exclusion.

🏦 Write-Off Season: Wells Fargo and Bank of America wrote off $107 million and $105 million in CRE loans in Q3, respectively, up from $16 million and $2 million. Both banks trimmed problem loans and loss reserves, signaling they expect fewer losses ahead.

📉 Distress Climbs: Distressed CRE sales rose 26.4% YoY through Q3 to $13.2 billion, led by a 62.8% jump in apartments, the only sector where distressed sales grew faster than nondistressed. Debt funds working with borrowers have held distress to 2.4% of volume.

🛒 Retail Rush: Institutional investors have claimed 26% of retail investment volume, up 14.6 percentage points from 2024, and drive 45% of deals above $100 million. As grocery-anchored pricing tightens, many private buyers are moving into strip centers and secondary markets for yield.

🌀 Isaias’s Tab: Hurricane Isaias, which hit the Florida Panhandle in October 2026, should cause $2.5 billion to $4.5 billion in insured losses. Most come from wind, and Florida’s 25% roof rule could force some full roof replacements.

🏆 TOP STORY
MANUFACTURED HOUSING’S RENT RUN DRAWS A CROWD

Apartment owners have spent three years grinding out rent growth of less than 3% a year. Owners of manufactured home communities have had a very different run. They raised lot rents 6.2% on average in 2026, more than double the apartment pace, and that was a slowdown.

That figure comes from Marcus & Millichap’s latest national report on metros with more than 5,000 homesites, and it’s down from 7.9% in 2025. Vacancy has held near 5% nationally, and cap rates have hovered around 7%. Put simply, these communities are full and rents are still climbing.

The buyers have noticed, and most of them look nothing like Wall Street. Private investors made up roughly 75% of dollar volume as institutions pulled back, and 2026 sales had passed the 2023 and 2024 totals by August. For now, institutions are a minority of the money.

That kind of rent growth also draws attention. Washington and New Jersey have already restricted lot rents, while Virginia’s new laws pull the other way, easing home placement and infill in existing communities. Owners face states that want more of what they sell and states that want to limit what they charge. Underneath the 6.2% average, the map splits several ways.

• Carolinas Carry the Mid-Atlantic: The Mid-Atlantic is the only region where deals grew substantially, topping its 2025 total by August. North and South Carolina account for nearly four-fifths of that activity. Regional operators keep buying up their patchwork of smaller communities.

• Orlando Shrugs Off New Supply: Orlando grew inventory more than 10% and saw vacancy rise 220 bps, yet it still led the nation with lot rent growth of 22.8%. New homesites softened occupancy there without denting pricing power.

• Texas and Florida Lose a Step: San Antonio posted the country’s largest vacancy jump at 980 bps, and Fort Myers, Jacksonville, and Houston rounded out the top four. The report says demographic tailwinds in both states may be moderating, and tighter immigration policy could play a role. Rents kept climbing in many Florida markets, so the softness has stayed in occupancy.

Pricing is splitting along regional lines, too. Cap rates compressed about 50 bps in the South and rose about as much in the Midwest. Southern sellers now get more for the same income, and Midwest buyers get it cheaper.

THE BOTTOM LINE

Federal reform could eventually loosen supply, but many of the 21st Century ROAD to Housing Act’s provisions still need HUD action, and the agency’s policy and research staff is reportedly 27% below 2025 levels. Local zoning remains a key constraint either way. That keeps supply tight for existing owners and makes state lawmakers the bigger wild card for how long lot rents keep climbing.

🤝 TOGETHER WITH GELT
THE TAX OUTCOME OF A DEAL GETS DECIDED BEFORE CLOSING, NOT IN APRIL

Q4 is when a lot of deals get done. A sale you want on this year's books. An acquisition you're racing to close. A refinance, a 1031, or a new partner coming into an entity.

Each of those has a tax answer, and most of it is locked in at signing: who holds title, when the property is placed in service, whether a cost seg study belongs in this year or next, and how the gain lands against this year's losses.

Gelt pairs you with a dedicated tax strategist who learns your full structure and works through those questions with you before you sign, not after the K-1s arrive. Software keeps your entities, documents, and deadlines in one place, so your time together goes to decisions instead of paperwork.

There are about 10 weeks left in 2026. If a deal is on your calendar, bring it to a strategist first.

💰 CRE BY THE NUMBERS
INDUSTRIAL RISES, FUNDRAISING FALLS, AND MORE

 

📦 202.6M SF

Industrial tenants signed 202.6M SF of leases in Q3, up 38.5% YoY and the strongest quarter since Q3 2022. YTD leasing has already reached 98.2% of the full-year 2025 total. Expansions rose to 12.6% of volume from 7.4% a year ago, as tightening large-block availability pushes some users to expand rather than relocate.

Rents Firm: Average asking rents rose 3.2% YoY to $10.55 PSF, the fastest annual growth since Q2 2024.

💼 $30.74 Billion

Private real estate funds raised $30.74 billion in Q3, down 34.6% YoY and the lowest quarterly total since Q1 2013. YTD fundraising fell 31.2% to $136.8 billion. Still, about two-thirds of funds that closed in 2026 met or beat their targets, compared with 61% falling short in 2024, suggesting capital is concentrating in strategies investors already favor.

Housing Leads: Multifamily and residential funds took 40% of sector-specific capital through September, and industrial took 38%, up from 21% for all of 2025.

🔄 $179 Billion

Roughly 78% of fixed-rate securitized CRE debt maturing through 2028 carries a rate well below the current 10-year Treasury yield, a total of $179 billion. Most of it originated when rates sat near historic lows and values near their peak. With rates expected to stay elevated and lenders backing away from extend-and-pretend, waiting for cheaper debt is no longer a workable refinancing plan.

Maturity Defaults: The CMBS delinquency rate reached 7.85% in August, and nonperforming matured loans made up 81% of newly delinquent balances.

🏆 BEST EVER PITCH SLAM
FOUR DEALS ENTER. ONE DEAL WINS.

Think you could spot the strongest CRE investment opportunity in a lineup? Here's your chance to put those instincts to the test.

Best Ever Pitch Slam LIVE returns Wednesday, October 28, with four operators competing for the championship, seven capital allocators asking the tough questions, and YOU helping decide the winner.

🔥 Meet the competitors:

• Chris Lenoir | Haverkamp Group: 286-unit 55+ housing opportunity in Omaha, NE — $14.1M target raise

• Conner Thomas | Greenwich Street Capital: 79,139 SF business park in Everett, WA — $6M target raise

• Mike Swenson | Pinnacle Capital Investments: 128-unit multifamily opportunity in Moorhead, MN — $1.7M target raise

• Sid Shamim | Headway Capital Investments: 318-unit multifamily opportunity in Houston, TX — $6.5M target raise

That's $28.3 MILLION in combined target capital raises on the table.

And the judges? Our panel of experienced capital allocators has collectively raised more than $134 MILLION in capital over their careers. They know what makes a deal worth pursuing.

Each operator gets four minutes to make their case and five minutes to face the judges' questions.

Then it's time to vote. And you're the 8th judge.

Will your pick match the panel's? There's only one way to find out.

🎙️ THE BEST EVER CRE SHOW
THE AMAZON HIRING RULE BEHIND THIS SIX-PERSON FIRM

Every distribution gets checked by hand. Every investor’s bank details get typed into the bank portal by a founder, and every marketing email gets read before it goes out. One wrong wire or one untrue line to an LP can do real damage, so founders guard those jobs. That works until the firm outgrows it.

This week on the Best Ever CRE Show, Richard McGirr described hitting that ceiling. With about a dozen funds and a team of six, he can no longer check every wire himself. “You either need the best people or you need to micromanage everything they do,” he says. His firm has done both.

• The Micromanagement Tax: Early on, three founders oversaw junior staff and VAs, the help the firm could afford. A founder reviewed every email and investor doc packet, which McGirr estimates added 20% to 30% in overhead. It was costly, but it carried the firm to product-market fit.

• The Hire He Had No Business Landing: As sales started ramping, the firm landed a corporate senior manager earning more than $300,000 a year, who joined for an initial $1,500 a month plus upside, eager to switch industries. That person now handles every wire, is set to become a partner, and does better math than the firm’s own fund admins.

• The Bar Raiser Test: McGirr borrows Amazon’s hiring rule, which asks whether a hire will raise the average effectiveness of the team they’re joining. On a team scored 60, 60, 40, and 40, another 40 drags the average down. Another 60 lifts it, and the standard rises with it.

His newest hire, a former hedge fund VP of operations, joined as an individual contributor after McGirr sat in every interview through round three. At six people, he treats every seat as critical and calls each new addition the highest-risk point for a team.

👉 Listen to the full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, good apples hit the market, LPs balk, renters get richer, margins grow thin, good office is hard to come by, and much more.

Today's edition is presented by Gelt, a tech-enabled tax advisory firm for real estate investors whose returns stopped being simple a while ago. There are 11 weeks left in 2026, and the decisions that shape this year's return are still open. Book a year-end planning call.

🔓 GP Lessons Unfiltered: Behind the Pitch is happening Wednesday, October 21 at 2:30 PM ET! Join Joe Fairless and 2x Pitch Slam Champion Chris Lenoir to learn what won investors over, where they pushed back, and get practical feedback on your own CRE business challenges. Plus, attend live and get our free Investor Pitch Stress Test! Join us.

🎤 Best Ever Pitch Slam LIVE returns October 28! Watch four CRE operators pitch real investment opportunities, face tough questions from capital allocators, and compete for the championship. Plus, you get a vote as the 8th judge. Meet the lineup and save your seat!

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🛟 Costly Lifeline: Multifamily sponsors short on refinancing proceeds may find rescue capital easier to land than expected, but one JV attorney has warned the terms look nothing like typical equity deals. Required returns and personal guarantees can shift control and wipe out a sponsor’s promote.

💎 Rich Renters: A new analysis found renter households earning $1 million or more grew 229% from 2020 to 2024, to 18,400, outpacing millionaire homeowners. Millennials make up nearly half, and Sun Belt metros posted some of the fastest gains, supporting luxury rentals.

📉 Generation Gap: New Fed data show median net worth for households under 35 fell 23% from 2022 to 2025 after inflation, while Americans 75 and older gained 37%. Renters lost ground too, a warning for underwriting that leans on young tenants.

🪙 Thin Margins: Apartment owners kept about 11 cents of every rent dollar in 2025 as operating expenses rose 4.6% to $8,213 per unit, nearly double the 2.7% revenue gain. That thinner cushion tends to delay renovations, technology upgrades, and new development.

🏢 Demand Detour: Rental demand has climbed 19.2% YoY as new buyers’ monthly payments rise nearly twice as fast as rent. Multifamily demand grew 10.1%, under half the 21.6% for SFRs, since many would-be buyers still want a house.

🏆 TOP STORY
WHY GOOD APARTMENTS ARE ABOUT TO HIT THE MARKET

Some of the best multifamily deals of the next two years will come from owners who did everything right. They bought good properties and ran them well, but their cheap debt is repricing at rates their NOI can’t cover.

That’s the case Marcus & Millichap’s John Chang made to Matt Faircloth this week on the Best Ever CRE Show. The hardest hit, Chang says, are 2021 and 2022 acquisitions financed at 3% to 4%, whose owners have been holding on for rates to fall. As recently as February, Chang says, markets priced an 80% chance of two rate cuts this year. Instead, the Fed raised rates in September for the first time since July 2023, and there’s another hike projected.

Buyers won’t pay prices that leave them upside down on today’s debt, Chang says, so he expects cap rates to rise again, with some assets possibly trading below replacement cost. Nearly every multifamily deal in progress is being retraded, he says. Meanwhile, most investors Faircloth talks to are on the sidelines, leaving room for buyers who know where to look. 

Chang and Faircloth discussed how operators on both sides of the trade can position themselves for the market ahead.

• Watch the Reset Calendar: Chang’s advice to owners with a reset or maturity coming is to test the deal at today’s rates and, if it fails, sell sooner rather than later. He expects maturing debt to push more assets onto the market and prices lower over the next year.

• Go Narrow and Go Off-Market: Faircloth’s sourcing advice is to cut a five-market search to one or two and get to know the brokers, lenders, sellers, and blocks. Many of today’s motivated sellers are individuals and banks, he says, and the best deals may never reach LoopNet or a best-and-final round.

• Buy Into the Supply Gap: Apartment units under construction have fallen to about 666,000, down 33% from their mid-2023 record of nearly 1 million, and Chang expects the next round of starts to be four to six years out. He looks for growth markets where the last building cycle is winding down. And with 49% of adults under 30 living with a parent in 2025, up 12 points from 2019, Chang expects them to start renting once hiring picks up, releasing a new wave into the renter pool.

Faircloth expects many owners to sell because they can’t absorb rate resets, and his team was one of them. Its multifamily loan was locked at 3.2% for five years. At reset, the lender wanted 240 bps over the five-year Treasury, putting the new rate in the mid-7s. The property was in good shape, but its income couldn’t carry that payment, so the team sold, still at a profit. “You may even have to sell some of your good apples like we did,” he says.

THE BOTTOM LINE

Chang doesn’t see rates easing without an end to the Middle East conflict or a tariff rollback. He sees renter demand returning in two to three years, with little new supply to meet it. “If I can get to there, I win,” he says. Buyers who pick up good assets from today’s forced sellers get there at a lower basis than the owners who sold them.

🤝 TOGETHER WITH GELT
MOST CPAs REPORT YOUR YEAR. A STRATEGIST HELPS YOU SHAPE IT.

More properties, more LLCs, a partnership or two, maybe an operating business on the side. Your filing got bigger. The advice usually didn't.

Gelt pairs you with a dedicated tax strategist who learns your whole structure and gets involved before decisions are made, not after.

Weighing a refinance, a 1031, a new acquisition, or bringing in a partner? Your strategist works through the tax side with you while there's still time to act on it. Software keeps documents, deadlines, and entities organized, so your time together goes to strategy instead of paperwork.

If your tax relationship only starts when the forms show up, it's worth a second opinion before December 31.

💰 CRE TRENDS
WHY OFFICE IS SUDDENLY SHORT ON GOOD SPACE

The office recovery has a clear pecking order. In JLL’s national data, average effective rents in the priciest tenth of buildings ran 18% higher in 2023 through 2026 than in 2018 through 2022. In the lowest tranche JLL tracks, the gain was about 6%, and nearly every step down the price ladder grew slower than the one above it.

Scarcity at the top drives the gap. Trophy and new construction space is running out in most markets, and first-generation effective rents are climbing more than 20% a year. Tenants who can’t find that space are moving into second-generation buildings, where effective rents are growing more than 10% annually. For owners and buyers below the trophy tier, that spillover is where the opportunity sits.

• Owners of Commodity Space: Rent gains reach mid- and lower-tier buildings more slowly, through spillover. Renovation is drawing capital, with the pace of sales where new owners planned to renovate up nearly 30% as of August, while conversion sales slowed.

• Buyers Hunting Repositioning Plays: The competition is shrinking. Owners pulled 9.6M SF out of inventory for conversions and redevelopments in Q3, against just 3.5M SF delivered, and national inventory is down more than 45M SF since late 2023.

The September rate hike complicates both plays, and JLL sees a possible slowdown in sales in Q4. It also expects higher rates to stifle new development, tightening supply further over the next 12 months. That keeps the top of the ladder scarce and spillover demand moving down it.

🔓 BEST EVER EVENTS
WHAT DOES IT TAKE TO WIN OVER INVESTORS? ASK A 2X PITCH SLAM CHAMPION.

Two Pitch Slams. Two wins. Plenty of tough questions along the way.

Join Joe Fairless and 2x Best Ever Pitch Slam Champion Chris Lenoir for GP Lessons Unfiltered: Behind the Pitch on Wednesday, October 21 at 2:30 PM ET.

Here's what's on the agenda:

• What investors loved about Chris's deal and where they pushed back.

• How Chris is approaching capital raising and investor relationships today.

• Your biggest business challenges. Bring them to the table and exchange ideas with Joe, Chris, and fellow operators.

🌟 BONUS FOR LIVE ATTENDEES

Get our new Investor Pitch Stress Test, a 10-question assessment with a 20-point scorecard to help identify weaknesses in your pitch before investors do.

Only 50 spots available. We're keeping this small so you can ask questions, share experiences, and get practical perspectives from operators who've been there.

🎙️ THE BEST EVER CRE SHOW
TWO PITCH LINES THAT IMMEDIATELY LOSE LPS

Telling an LP you don’t trust the stock market can end a multifamily pitch in one sentence. So can predicting that multifamily will work out in 10 years. Both happened in a breakout session at Best Ever’s recent LP Lessons Unfiltered event, where operators pitched themselves to investors in small groups. The two fund-of-funds managers in the group balked.

On a recent episode of the Best Ever CRE Show, one of those managers, Richard McGirr, broke down why both pitches failed and how he’d rebuild each one. His starting point is that the biggest checks come from the most skeptical investors. About 18 of his 185 LPs account for roughly half his equity, and they grill him on every fund update. Winning them over, he says, starts with understanding what LPs already believe and building the pitch around it.

• Pitch Real Estate as an Addition: His typical LP has $1 million to $10 million in net worth, with stocks as the biggest holding outside their home after a 15-year run. Attacking the market alienates nearly everyone in the room, so he frames real estate as a complement, selling what stocks can’t offer, such as uncorrelated income, depreciation, and hard-asset exposure.

• Drop the “Someday” Pitch: A modest return after 10 years is dead money to an LP who could have been compounding elsewhere. He’d rather pitch deals that pay from day one, highly occupied and cash flowing on five to seven years of fixed-rate debt, and says core and core-plus deals are easier to raise for than deep value-add right now.

• Separate the Deal From the National Story: The multifamily slump has repriced good assets along with bad ones. His pitch makes the local case, with a growth market, a well-occupied building, and little new supply coming.

Richard spends about two-thirds of every investor presentation on downside protection, laying out step by step how the deal makes money and what protects it. LPs don’t invest because there’s a Starbucks down the street, he says. They invest when the case holds up at every step.

👉 Listen to the full episode here.

👋 Hello, Best Ever readers!

In today’s newsletter, renters go simple, the rate watch is on, entitlement drags, the Sun Belt slides, tax moves (almost) pan out, and much more.

Today's edition is presented by Gelt, a tech-enabled tax advisory firm for real estate investors whose returns stopped being simple a while ago. There are 11 weeks left in 2026, and the decisions that shape this year's return are still open. Book a year-end planning call.

🚨 LIVE TODAY AT 1 pm ET: Could you spot a bad CRE deal before spending thousands on due diligence? Join CREtelligent CEO Anthony Romano for a live property screening demonstration to see how to uncover hidden risks before signing the LOI. Last chance to register! 

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏦 Hike Watch: Fed minutes from September showed several officials saw rates as only mildly restrictive at most, and some flagged energy disruptions and AI-driven demand as inflation risks. Projections pointed to at least one more quarter-point hike, which would raise CRE borrowing costs.

🏭 Entitlement Drag: Longer approvals, community pushback, and rising mitigation costs have pushed industrial developers to price entitlement risk into land deals, often refusing to close until approvals clear. Shovel-ready sites command a premium, but buffers that win approval can shrink truck courts.

🏘️ Mixed Signals: A proposed Community Reinvestment Act rewrite could undercut the administration’s housing push, critics say. The 2025 tax law expanded LIHTC, but the rewrite would ease investment rules for banks under $10 billion, which put about $2 billion into LIHTC from 2021 through 2025.

🏢 Extension Fatigue: Clearer office valuations have weakened the case for extending loans on buildings without leasing traction. With $22.2 billion in office loans hitting hard maturity in 2027, more owners could accept losses that let new buyers reset the basis.

🔑 DSCR Revival: Debt-service coverage ratio loans, underwritten on rental income rather than the borrower’s income, have pulled private capital into long-neglected neighborhoods in Cleveland, Baltimore, and Memphis. Fraud cases have since sparked a pullback, with Baltimore private lending down 40% this year.

🏆 TOP STORY
HOW OPERATORS ARE WINNING THE AMENITY WARS

For years, renters have told surveyors roughly the same thing about what they want in an apartment, and the top of that list is plain: cool air, laundry, and a place to park. More operators are now asking which amenities residents actually use. The sauna makes the marketing video. The washer and dryer sign the lease.

Facing crowded leasing markets, some multifamily operators have started trading amenity count for amenities residents use every day. One developer working in Georgia, Tennessee, and Alabama said his firm now questions large, specialized rooms that see little use. Another operator converted business centers built for one or two people into lounges with meeting rooms and private call pods at two of its communities.

Renters have room to be picky. Concessions covered 15.4% of stabilized units nationally in August, according to RealPage, and 20.5% in the South. With discounts that widespread, operators are leaning on amenities to stand apart.

• Basics Still Close Leases: In a survey of 14,066 renters that Apartments.com published in July, in-unit laundry ranked as a must-have for nearly as many renters as air conditioning, which topped the list at 65%. Off-street parking and dishwashers each drew 42%. For older and smaller properties, that list points to upgrades within reach of a capital budget, from washer-dryer hookups to assigned parking.

• Big Tickets Draw Small Crowds: Only 18% of renters called a fitness center a must-have, 17% an elevator, and 12% a pool. Showpieces like rooftop terraces and concierge services mostly draw luxury renters rather than the general renter population, Apartments.com noted. That gap gives owners a demand-based way to rank capital projects.

• Flexible Rooms Earn Their Square Footage: Shared spaces that serve several purposes through the day can be worth more than rooms built for a narrow slice of residents, according to one developer. Residents working from home have favored privacy over open coworking tables, and one operator’s brand executive recommends pairing quiet rooms and private call booths with reservable meeting space and reliable high-speed internet.

The pressure has landed hardest on older buildings. In July, operators offered concessions on 21.5% of Class C units, up 5.6 points YoY. Class A was the only class where concessions were less common than a year earlier, according to RealPage. For Class C owners, the renter survey points away from the sauna and toward the basics.

THE BOTTOM LINE

Operators have pulled back on concessions for three straight months, but the deals still on the table have gotten richer. The average discount hit 11% of asking rent in August, up from 9.7% a year earlier. Until those discounts shrink, renters will keep weighing each building against the free month down the street. In that comparison, the washer and dryer will keep outworking the sauna.

🤝 TOGETHER WITH GELT
MOST CPAs REPORT YOUR YEAR. A STRATEGIST HELPS YOU SHAPE IT.

More properties, more LLCs, a partnership or two, maybe an operating business on the side. Your filing got bigger. The advice usually didn't.

Gelt pairs you with a dedicated tax strategist who learns your whole structure and gets involved before decisions are made, not after.

Weighing a refinance, a 1031, a new acquisition, or bringing in a partner? Your strategist works through the tax side with you while there's still time to act on it. Software keeps documents, deadlines, and entities organized, so your time together goes to strategy instead of paperwork.

If your tax relationship only starts when the forms show up, it's worth a second opinion before December 31.

💰 CRE BY THE NUMBERS
SUN BELT SLIDE, RENT PROJECTIONS, AND MORE

 

🏗️ 75%

Sun Belt apartment starts in early 2026 ran about 75% below their 2022 high, and the region’s construction pipeline has shrunk to its 2016 size. Markets are working off oversupply at uneven speeds, with Austin and San Antonio furthest along while Dallas-Fort Worth still has more than 40,000 units under construction.

Absorption Leaders: San Antonio is absorbing 1.7 apartments for every one delivered, and Austin 1.3.

📈 2.4%

Effective apartment rents should rise about 2.4% nationally from Q4 2026 through Q3 2027, according to RealPage, and no top-50 market is projected to see rents fall. San Francisco and Milwaukee lead at 3.8%, while Houston and San Antonio trail at 0.5% and 0.8%, respectively, as they absorb new supply.

Delivery Wave: An estimated 320,000 apartments should deliver over the next four quarters, led by Dallas at more than 20,000 units.

🛍️ 4.3%

National retail vacancy dipped to 4.3% in Q3, down 10 bps and near record lows, as net absorption hit 10.5M SF, the strongest quarter since 2023. With high construction and financing costs limiting speculative building, tight supply is expected to support measured rent growth through 2026.

Mall Momentum: Mall vacancy fell 30 bps to 8.2% in Q3, with malls absorbing 1.9M SF.

🎓 BEST EVER LIVE EDUCATION
TODAY AT 1 PM ET

How much could a bad deal cost you before you even close?

Join CREtelligent CEO Anthony Romano TODAY at 1 PM ET for a free webinar on spotting potential deal-killers before spending thousands on due diligence.

Watch a live property screening demonstration and see how to identify environmental, zoning, and property condition risks in minutes — so you can make smarter acquisition decisions and avoid costly surprises.

Last chance to register!

🎙️ THE BEST EVER CRE SHOW
THE $1 MILLION TAX MOVE THAT (ALMOST) WORKED

One year, right around Christmas, Ash Patel was staring at a large taxable gain, so he asked a friend who owns a tree business whether he had anything Ash could buy for depreciation. Ash bought about $1 million in semi-trucks and trailers, sent the money before Dec. 31, and got the purchase orders in.

But the trucks weren’t placed in service by year-end, and that cost him the deduction for the year.

This week on the Best Ever CRE Show, Ash shared that story with tax strategist Tal Binder. Buying before year-end to offset a gain is a sound strategy, and with about 11 weeks left in 2026, here’s how to pull it off better than Ash did.

• Placed in Service Beats Paid For: For depreciation to count this year, the asset has to be placed in service by Dec. 31, Binder says. Paying for it doesn’t qualify on its own. For a rental, that can mean rent-ready and advertised for rent.

• Finance It, Then Depreciate It: Ash says he should have financed the trucks and leased them to his friend over time. Binder walks through the math: put $100,000 down and borrow $900,000, and if the equipment qualifies and enters service during the year, the full $1 million can be depreciated that year.

• Buy Only What You’ll Use: Never buy something just for the tax break, Binder says. Ash sees the same rush in real estate near year-end, when investors hunting depreciation put money into syndications without knowing the details of what they’re buying.

Every tax move carries a trade-off in time and money, Binder says, and he puts the best planning window between May and August, when CPAs have the most time. For anyone still chasing a 2026 deduction, the clock that ran out on Ash stops at midnight Dec. 31.

👉 Listen to the full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, Isaias hits multifamily, cap spreads shrink, new retail anchors emerge, the apartment pipeline shifts, and much more.

This edition is presented by Headway Capital. A rare West Houston multifamily opportunity has just opened up. Fuse at Park Row, a 318-unit apartment community in Houston’s Energy Corridor, is being acquired at roughly 36% below the seller’s all-in basis — a difference of about $24.8M across the property. Learn more.

🎓 Kill Bad Deals Before the LOI: This Thursday, October 15 at 1 PM ET, join CREtelligent CEO Anthony Romano for a free live demonstration of how institutional lenders screen properties for hidden risks before spending thousands on due diligence. Register free →

🥊 Senior housing vs. multifamily vs. industrial. Four deals are going head-to-head at Best Ever Pitch Slam on October 28. Which one would YOU pursue?

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏢 Thin Cushion: Apartment cap rates sat about 70 bps above the 10-year Treasury when federal debt crossed $40 trillion, the thinnest spread at any $10 trillion milestone, per RealPage. Yields have since risen, leaving buyers counting on rent growth or price cuts.

📦 Moving Target: Among large metros, migration magnets Atlanta, Dallas, Houston, and Phoenix posted the weakest realized self-storage rent growth over two years as developers chased the same demand. Such markets typically become buying opportunities only 36 to 48 months after migration peaks.

🏋️ New Anchors: Apparel store visits fell nearly 25% between 2019 and 2025, while fitness, wellness, coffee, grocery, and off-price retail gained traffic. One report argues shopping center landlords should judge anchors by visit frequency and dwell time rather than square footage alone.

🏗️ Pipeline Turn: Industrial space under construction has risen 16% from its 271M SF low at the end of 2025, a sign a new cycle is forming. Lease-up remains uneven, with 82% of recent Midwest completions occupied versus 48% in the Southeast.

🏬 Mall Divide: Mall values have risen 13% YoY, the strongest gain of any property type, yet $8.7 billion in mall CMBS loans sit with special servicers. About 250 Class A malls hold roughly 90% of sector value, masking distress at weaker centers.

🏆 TOP STORY
WHAT REALLY HAPPENS AFTER A STORM LIKE ISAIAS

Hurricane Isaias came ashore Friday near Destin, Florida, as a Category 2 storm, the first U.S. hurricane landfall since Milton hit near Sarasota in October 2024. Moody’s placed 4,757 multifamily buildings worth an estimated $8.8 billion in Pensacola in the storm’s projected path.

By Saturday, Isaias had torn roofs off apartment buildings in Santa Rosa County, Florida. Nationwide, Cotality counts more than 32.2 million homes at moderate or greater hurricane wind risk. Recent storms offer operators a rough map of what follows, from where costs pile up to what residents remember.

• The First Week Sets the Bill: Waiting a week to start mitigation raises restoration costs at least 53%, and waiting three weeks raises them 155% to 290%, according to Cotality. For owners in Isaias’s path, that clock started Saturday.

• The Deductible Comes First: After Hurricane Ida hit Louisiana in 2021, one New Orleans apartment executive noted that a community insured for $30 million with a 5% windstorm deductible leaves its owner $1.5 million out of pocket. Some policies apply it to each storm separately, so Florida owners hit by both Helene and Milton, 13 days apart in 2024, could have paid it twice. Many owners go years without reading those terms.

• Repairs Run on Storm Time: After Hurricane Ian hit Southwest Florida in 2022, one apartment operator estimated repairs were taking three times as long as normal, with two- to three-month jobs stretching to seven or eight. Florida temporarily waived a rule requiring general contractors to hire licensed roofing subcontractors.

• Displacement Cuts Both Ways: Helene’s surge destroyed the first-floor power systems at a senior housing building in South Pasadena, Florida, forcing out more than 160 residents while management estimated six to 10 months of repairs. Undamaged properties can fill up. After Hurricane Harvey flooded Houston in 2017, the metro absorbed more than 11,000 apartment units in Q4 of that year, according to RealPage, though the surge faded within about six months.

Residents keep score, too. After Helene and Milton, online reviews faulted properties with no plan for water damage or pests, and one said no one called to check on elderly or sick residents. With nearly 390,000 customers in Florida and Alabama without power Sunday and repairs ahead in the coming weeks and months, properties in Isaias’s wake face the same test.

THE BOTTOM LINE

Much of what Isaias costs owners was set before landfall, from the deductible to the restoration vendor on call to the floor where the electrical equipment sits. U.S. commercial property insurance rates fell 13% in Q2 2026, and Marsh expects declines to continue absent a severe storm season. Isaias’s final tally will help decide whether owners far from its path feel it at renewal.

🤝 TOGETHER WITH HEADWAY CAPITAL INVESTMENTS
318 UNITS. 36% BELOW SELLER’S BASIS. $24.8M BASIS ADVANTAGE.

Headway Capital Investments is launching Fuse at Park Row, a 318-unit value-add multifamily acquisition in West Houston’s Energy Corridor / Katy Freeway corridor.

The opportunity stems from the seller’s capital structure rather than a distressed asset. The current owner acquired the property in 2022 for approximately $185K per unit and is roughly $216K per unit all-in. With a recourse loan coming due, the seller has elected to exit around the loan balance.

Headway and its partners are acquiring the property for approximately $138K per unit, 36% below the seller’s all-in basis, creating an estimated $24.8M basis advantage across the 318 units.

The investment combines a reset acquisition basis with an established West Houston location, value-add rent upside and long-term fixed-rate Freddie Mac financing.

Projected investor returns include:

• 16.41%–18.59% IRR

• 2.00x–2.18x Equity Multiple

• ~7.1% Average Cash-on-Cash

• $50K Minimum Investment

🎓 BEST EVER LIVE EDUCATION
WOULD YOU BUY THIS DEAL?

A property looks great on paper. But what happens when you uncover an environmental issue, zoning restriction, or hidden property risk after signing the LOI?

Before you spend thousands on due diligence, learn how to spot the red flags that could kill your deal.

Join Anthony Romano, CEO of CREtelligent, for a live demonstration of how institutional lenders screen properties before committing capital.

You'll see how to:

• Go from an address to a property risk score in minutes

• Catch potential deal-killers before signing an LOI

• Avoid unnecessary due diligence costs on bad deals

• Identify which property reports are worth ordering

THURSDAY, OCTOBER 15 • 1 PM ET

💰 CRE TRENDS
THE APARTMENT PIPELINE IS GETTING LOWER AND WIDER

Developers are testing fewer dense apartment projects. On a feasibility platform that ran more than 100,000 site analyses last quarter, higher-density multifamily fell to 45.2% of residential runs in Q3 2026. That’s down from 61.6% two years earlier, and it’s below half for the first time. The number of dense projects tested dropped 39% in six months.

Feasibility work comes before a developer buys land, so it offers an early look at where new competition could surface. The shift toward lower-density projects has held for two years.

• Dense Apartment Owners: Fewer competing dense projects may enter the pipeline. Even with the effective federal funds rate down to 3.63% from 5.33% in July 2024, deals shelved two years ago haven’t come back.

• Garden and Suburban Owners: Garden-style projects rose to 10.3% of residential runs from 6.9%, and mid-density urban projects to 19.0% from 13.0%. Both pencil at construction loan rates where concrete-podium buildings don’t, and they tend to go up in suburban and secondary markets where land costs don’t force more density.

• Retail and Industrial Owners: Across every asset class, projects under 0.5 floor area ratio, which covers suburban retail, single-story industrial, and horizontal residential, rose to 46.4% of all runs from 35.1%, a new high. Median retail lot size also grew to 6.3 acres from 4.1.

The next wave of competition looks lower, wider, and farther from gateway cities than the last one. The data tracks where developers are looking, and the road from feasibility to delivery is long.

🎤 BEST EVER PITCH SLAM
FOUR DEALS ENTER. WHICH ONE WINS?

Senior housing. Two multifamily deals. An industrial business park.

Four operators are going head-to-head at Best Ever Pitch Slam, pitching their deals to seven judges looking to place $10 MILLION in capital.

Meet the challengers:

• 🏘️ Chris Lenoir | Haverkamp Group: 286-unit 55+ housing community

• 🏠 Mike Swenson | Pinnacle Capital Investments: 128-unit multifamily deal

• 🏢 Conner Thomas | Greenwich Street Capital: 79,139 SF industrial business park

• 🏙️ Sid Shamim | Headway Capital Investments: 318-unit multifamily deal

The judges will decide which deals are worth pursuing. But YOU get a vote in who takes home the championship.

Four deals. Seven judges. $10M looking for a home. One champion.

📅 October 28 | 12 PM ET | Free to Attend

🎙️ THE BEST EVER CRE SHOW
WHERE MOM-AND-POPS LEAVE VALUE ON THE TABLE

The easy way to raise self-storage rents is to pick a number, say 5% or 10%, and apply it to every unit on the property. It’s simple, and one longtime operator who used to do it calls it a fatal mistake.

This week on the Best Ever CRE Show, Matt Ricciardella, founder of Crystal View Capital, joined host Matt Faircloth to walk through his value-add levers in self-storage and manufactured housing, two asset classes he says are still dominated by mom-and-pop owners. His firm owns roughly 20,000 storage units but now focuses almost entirely on manufactured housing for new acquisitions.

• Price by Size Code: Ricciardella sets storage rent increases by unit size rather than across the whole property. At some facilities, 5x10s barely rent while 15x40s stay in high demand. A small unit might warrant a rent cut, he says, while a large one in demand could support an increase of 30% to 40%.

• Fill the Empty Pads: In manufactured housing, one of his largest levers is bringing in new homes to fill vacant sites, using an in-house team to buy, move, set up, and market them. At an average lot rent of $500, each filled site adds about $6,000 in annual NOI by his math, or roughly $120,000 in value at a 5 cap.

• Submeter the Water: At one community where the owner pays the water and sewer bill, his team plans to install submeters across 200 sites and pass the expense to residents, as competing communities do. He expects the roughly $170,000 project to add about $200,000 in annual NOI, worth $4 million at a 5 cap or $3.3 million at a 6 cap.

For communities where the owner holds many of the homes, one option Ricciardella describes is rent-to-own. Residents keep paying, but the payments go toward owning their homes over five to eight years, and repairs and maintenance shift to them. “All of a sudden, they care more,” he said.

👉 Listen to the full episode here.

👋 Hello, Best Ever readers!

In today’s newsletter, renters get relief (for now), buyers renegotiate, insurers get risky, floating debt undercuts fixed, and much more.

This edition is presented by M1 Real Capital. Built through $3B+ in team transactions and trusted by 1,000+ operators, fund managers, and syndicators. M1 Real Capital installs the systems used to create predictable private capital. Book a Capital Constraints Call to diagnose where your raise breaks and what needs to be fixed.

🎓 TODAY at 1 PM ET: The Real Estate Investor’s Guide to Private Lending. Join the session.

🌟 Looking for new capital relationships? Inner Circle members meet dozens of accredited LPs every month and get matched based on the types of investments they’re actively interested in. Explore all the ways we’re putting members in front of capital.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🔄 Retrade Wave: With deals often taking six to 12 months to close, buyers who signed CRE contracts earlier this year have pushed for price cuts as borrowing costs climb. One apartment buyer won $600,000 off a roughly $20 million Midwest property.

🏦 Insurers Unbuckle: Insurance companies, long among CRE's most conservative lenders, posted the biggest LTV jump of any lender group this year, up 250 bps to 62.7%. With $44 billion of their CRE loans maturing in 2027, that leverage raises exposure to valuation swings.

🛎️ Hotel Handoffs: Retiring owners of family-run hotels and motels have been putting properties up for sale as heirs decline to take over. Buyers could inherit deferred capital needs, since owner-operators nearing retirement tend to fund maintenance rather than reinvestment in their final years.

🏭 Shrinking Spread: In-place industrial rents rose 5.4% YoY to $9.31 PSF in August, but the premium on new leases has shrunk to 88 cents, from $2.45 two years ago. With vacancy up 60 bps to 9.3%, owners have less upside when leases roll.

📈 Worst Case: Mortgage rates could climb toward 9% if a Treasury market shock pushes 10-year yields to 6% or 7%, one economist warns. The base case is continued volatility, which keeps financing costs elevated and harder to predict across CRE.

🏆 TOP STORY
WHY RENTERS HAVE SOME BREATHING ROOM — FOR NOW

Every rent increase an operator implements tests the same thing: how much room is left in a resident's paycheck. Across much of the country, that room has grown. A solo renter now needs to earn $150 less a month than a year ago to afford a typical studio, and only 30 of the 100 largest U.S. cities price the median earner out of one, measured against the standard that rent shouldn't top 30% of gross pay. That's the fewest in three years.

New supply has driven this improvement. The U.S. added a record 695,000 apartments in 2024 and another 531,000 in 2025. Rents rose just 1% in the first half of 2026, and roughly a quarter of apartments were listed with incentives between April and June.

That room rests on a pipeline that's emptying. Construction starts are down almost three-quarters since 2022, to their lowest quarterly total since 2011. As new units fill, landlord pricing power could strengthen.

• The Math Works at Any Property: Dividing the local median wage by the income a unit's rent requires at 30% shows whether the typical local earner can carry that rent. A result below one means they can't.

• Affordable, but Still Soft: Austin and Houston crossed into affordable territory between 2023 and 2026, but rents in each were still down YoY in August, according to RealPage. It expects growth below 1% in Austin and a slight decline in Houston through Q2 2027.

• Stretched Markets Carry Different Risk: Renting a New York studio takes $153,600 in pre-tax income, more than double the metro's median wage, yet rents there rose 4.5% YoY in August. San Francisco's rose 14%, and RealPage forecasts 3.8% growth there through Q2 2027, versus about 1.9% nationally. High rents support revenue, but a widening gap with local wages can constrain the renter pool, invite regulatory pressure, and leave properties exposed if job growth weakens.

The studio test reaches beyond studios. One-person households made up 29% of U.S. households in 2025, up from 20% in 1975, according to the Census Bureau. Because contractors largely price construction by square footage, developers are shrinking units of every size to keep costs down and rents competitive.

THE BOTTOM LINE

Rent-to-income headroom has widened across much of the country, and the supply that created it is disappearing. With RealPage forecasting little or no rent growth through mid-2027 in Austin and Houston, any return of pricing power is likely to arrive unevenly. The gap between local wages and local rents offers a direct read on how much room a property's residents have left.

🤝 TOGETHER WITH M1 REAL CAPITAL
INVESTORS DON’T WALK AWAY OVER BAD NEWS

Investors don’t walk away over bad news. They walk away over surprises.

Delays happen. Costs rise. Markets shift. Experienced investors expect challenges, but what they don't forgive is finding out too late.

The operators who raise capital consistently have systems in place to build trust, communicate proactively, and keep investors coming back.

That's where M1 Real Capital comes in.

With a 9-figure capital-raising track record, M1 helps operators raising $1M–$100M+ build institutional-grade capital-raising infrastructure, including:

• Investor Communication Systems: Keep investors informed, even when the news isn't good.

• Investor-Ready Positioning: Build credibility with sophisticated investors and prepare for diligence.

• Predictable Investor Flow: Attract qualified investors before your next raise.

• Repeatable Raise Infrastructure: Build systems that support long-term investor relationships and future raises.

Designed for experienced operators, fund managers, and teams building scalable capital raising platforms, including 506(c) offerings.

Identify what's holding back your next raise and map out the systems you need to fix it.

Bad news is part of every deal. Surprises are optional.

🎓 BEST EVER LIVE EDUCATION
TODAY AT 1 PM ET

Considering private lending? Know what you’re investing in before you write the check.

Join Property Llama co-founders Richard McGirr and Chris Lopez today to learn how to evaluate the lender, loan portfolio, downside protection, and actual risk behind a private lending opportunity, so you can make a more informed investment decision.

Can’t make it live? Register anyway, and we’ll send you the replay.

💰 CRE BY THE NUMBERS
FLOATING VS. FIXED, WHY RENTERS MOVE, AND MORE

 

🔀 30 bps

Among deals that drew both fixed and floating quotes on one lending marketplace in Q3, floating debt came in cheaper 80% of the time, by a median of 30 bps. A steepening yield curve pushed the 5-year Treasury more than 100 bps above SOFR by late September. The savings carry risk, since the Fed raised rates 25 bps in September and floating borrowers would absorb any further hikes.

Quote Gap: On deals with multiple conventional quotes, the best and worst rates differed by a median 75 bps in Q3, up from 50 bps in Q2.

💼 27.4%

Employment and commuting drove 27.4% of moves into multifamily rentals, the top reason among apartment movers, compared with 21.1% for single-family rental movers. Single-family rental movers lead instead with housing and neighborhood reasons, at 29.3%, versus 21.3% for multifamily. Across all rentals, family formation, housing, and jobs each accounted for about a quarter of moves.

Price Check: Seeking cheaper housing drove just 11.6% of multifamily moves and 9.8% of single-family rental moves.

🛍️ 5.6%

Open-air shopping center visits rose 5.6% YoY in September, extending a growth streak that has held all year, even as gas hit a seasonal record of $4.48 a gallon and consumer sentiment fell to a four-month low. Indoor malls followed at 5.5%, their narrowest gap with open-air centers this year, while outlets rose 4.1%.

Holiday Lift: Outlet visits on the weekend before Labor Day, which fell fully in September this year, ran 29.1% above other September weekends, versus 8.2% at indoor malls and 6.9% at open-air centers.

👵 90.4%

Senior housing occupancy across 31 primary markets reached 90.4% in Q3, up from 89.8% in Q2 and the sector's 21st straight quarterly gain. Construction keeps falling behind, with units underway down 1% to 16,159 and annual inventory growth of 0.4%, near record lows. Acquisition prices for newer properties are beginning to exceed replacement costs, which could make new development pencil.

Building Gap: Holding occupancy at 90% would take more than 100,000 new units in most years through the late 2030s, roughly 10 times the current pace of 10,445 a year.

🌟BEST EVER INNER CIRCLE
MEET ACCREDITED LPS EVERY MONTH

Raising capital gets a lot easier when you're consistently meeting more of the right people.

Through LP Lessons Unfiltered, Best Ever Inner Circle members meet dozens of accredited LPs live, hear how they evaluate deals and operators, and get matched with LPs based on the types of investments they're actively interested in, creating more relevant, qualified introductions.

The next LP Lessons Unfiltered is October 21, and operators who join the Inner Circle now will have access to this month's event.

And that's just one of the ways we're helping members build more capital relationships.

🎙️ THE BEST EVER CRE SHOW
WHY YOUR STORIES MIGHT BE WORTH MORE THAN YOU THINK

A strong track record gets a GP in the door. Getting an LP to wire $100,000 takes more. Investors making a decision that size want to understand a sponsor's ethics, judgment, and how they handled the deals that went sideways, and they study whatever they can find before they commit.

This week on the Best Ever CRE Show, Adam Witty, founder and CEO of Advantage, the publisher behind Forbes Books, joined Richard McGirr to explain how a book can carry that load. By his estimate, Witty's firm has published at least 100 real estate titles over the past two decades.

• Define the Book First: Before writing, Witty has authors define the book's job, its audience, and what success looks like. For a GP, that means naming the investor problems the book answers. Without that, he says, its chances are far more limited.

• Write for the LP: Investors can find knowledge anywhere. What they can't find elsewhere is a GP's track record, deal stories, and even the losses, which Witty says need to be woven through the book.

• Pick a Timeless Topic: A book pays off over a long shelf life, whether through Amazon sales or new clients. Witty's own cautionary example is a title his firm published, The 2025 Guide to Denver Real Estate, which was obsolete by 2026.

• Market It Daily: Rather than pouring everything into launch day, Witty recommends one promotional move every day. The highest-leverage use is mailing copies to a Dream 100 list, the people or firms that could change the trajectory of a business. Richard credits that approach with a recent surge in sales at his own company.

Witty also has little patience for the fear that a book gives away the playbook. In his view, the more a GP shares, the more credible they become, and readers who see how much work goes into it are more likely to hire the expert than copy them. "Ninety-nine point nine percent of people don't execute," he says.

👉 Listen to Adam’s full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, property taxes creep, LTVs rise, buyers love gas stations, snowbirds take flight, multifamily capital concentrates, and much more.

Today’s edition is presented by Gelt, a tech-enabled tax advisory firm that helps real estate investors proactively plan around complex portfolios, entities, K-1s, and transactions. With year-end approaching, now is the time to make the tax moves that could change your 2026 numbers. Start your year-end tax plan.

🎓 What if your returns didn’t depend on everything going according to plan? This Thursday, October 8 at 1 PM ET, learn how experienced private lenders structure investments for more predictable outcomes and downside protection. Save your seat.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

⛽ Pump Premium: Investors keep buying gas stations despite soaring fuel prices, helped by 100% bonus depreciation. Houston sites that once traded for $1.5 million to $2 million now fetch $4 million to $5 million, and cap rates have held near 5.6%.

💳 Leverage Returns: Average CRE loan-to-value ratios reached 65.9% in the first half of 2026, up 170 bps YoY, as banks lifted their lending share to 39% and debt funds grew to a 16% share at an average 69.5% LTV.

🌴 Snowbird Belt: Florida and Texas claim 88 of the top 100 snowbird destinations for the 2026-2027 winter, led by Winter Haven and Lakeland, Florida. Seasonal units make up 65% of rentals in Vero Beach.

🧮 Pricing Standoff: Many apartment buyers have kept underwriting flat or falling rents, holding bids below sellers' expectations. Ivy Zelman forecasts rent growth of about 1.5% in 2026, 2.6% in 2027, and 3.7% in 2028, which could help close the gap.

🛎️ Rate Divide: Full-service hotels led rate growth over the year ended in July, with ADR up 4.4%, versus 1.3% for select-service and a 1% decline for limited-service. Limited-service hotels may also take the biggest margin hit from gateway-market wage mandates.

🏆 TOP STORY
HOW PROPERTY TAXES COULD HIT YOUR 2027 BUDGET

As operators pencil out 2027 budgets, insurance tends to get the hardest look. Per-unit insurance costs jumped 152.6% from Q2 2017 to Q2 2026, the steepest climb of any operating cost. Property taxes rose a more modest 29.6%, but they still take a bigger bite of the budget, and two upcoming dates could change those bills in Florida and Texas.

Real estate taxes made up 20.9% of apartment operating expenses in Q2, trailing only payroll at 21.8%. In 2025, effective tax rates on apartments in each state's largest city ranged from 0.33% in Honolulu to 3.70% in Detroit. On average, apartments faced an effective rate 46% higher than the median owner-occupied home, the widest gap since 2008.

Values haven't kept pace with those bills. Apartment values rose just 6.9% from Q2 2016 to Q2 2026, and since Q2 2019, they've fallen 9.4% in the Midwest and 3.2% in the West. Rates, assessment practices, and exemptions can all push a bill higher while values barely move, and each one shapes what lands in next year's budget.

• Underwrite the Jurisdiction: Rates can nearly double within a single metro. Apartments in Aurora, a Chicago suburb, faced a 2.813% rate in 2025, versus 1.437% in Chicago.

• Audit the Assessor's Math: Assessors typically value apartments with a mass-appraisal income approach, using a standardized vacancy factor that rarely matches a property's actual occupancy. Assessments can also assume peak-era rents, and assessor records commonly misstate unit counts, square footage, and unit mix. Appeal windows are short, and most start with an informal review.

• Read the Exemption's Fine Print: Apartment tax abatements are rare compared with homeowner exemptions, and they come with strings. Texas now requires tax-exempt housing finance corporation deals to pass at least 50% of the forgone taxes through to tenants as rent reductions. Properties outside their sponsor's jurisdiction lose the exemption January 1 unless they secure local approval, and several Texas properties that lost exemptions have landed in loan servicing.

Florida will test the homestead gap next month. Amendment 3, on the November 3 ballot, would raise the non-school homestead exemption to $250,000 by 2028. It would cut the annual cap on assessment increases for non-homestead property, rentals included, from 10% to 5%. State analysts estimate it would eventually reduce local property tax revenue by nearly $12 billion a year, which opponents argue would shift onto non-homestead property. It needs 60% of the vote to pass.

THE BOTTOM LINE

A tax line rolled forward from last year's bill misses the parts owners can work. The assessment can be challenged, the rate depends on where the property sits, and in Florida and Texas, the rules behind the bill could change as the 2027 budget year begins.

🤝 TOGETHER WITH GELT
THE TAX MOVES THAT MATTER HAVE TO HAPPEN BEFORE DECEMBER 31

Most real estate investors find out what their tax year looked like in April, when the return is already written. By then, the moves that could have changed it are gone: cost segregation timing, entity cleanup, when to close a sale, how passive losses get used. Those are fourth-quarter decisions, not spring ones.

Gelt is a tech-enabled tax advisory firm built for investors with real portfolios and complicated returns. You work with a dedicated tax strategist who knows your entities, your K-1s, and what you're planning to buy or sell next year. Software keeps your documents and structure current so your strategist spends time on decisions, not chasing paperwork. The planning happens all year, with the heaviest lift before year-end.

If your current CPA's only question is "did you send everything," this is the other model. There are still a few months left to change this year's number, and that work starts now.

🎓 BEST EVER LIVE EDUCATION
WHAT HAPPENS WHEN THE BUSINESS PLAN DOESN’T GO PERFECTLY?

In an equity deal, your returns can depend on a long list of assumptions going right; rent growth, expenses, cap rates, execution, and ultimately the exit.

Private credit plays by a different set of rules.

This Thursday, Property Llama co-founders Richard McGirr and Chris Lopez are breaking down why they believe private lending can offer more predictable outcomes — and how experienced lenders structure deals to protect capital first.

You’ll learn:

• Why private credit returns can have less variance than equity investments

• How being first in the capital stack can change your risk exposure

• How to analyze a loan portfolio like an institutional investor

• Why actual track-record data can tell you more than a pro forma

Chris and Richard have partnered on $40M+ in private lending investments, giving them plenty of real-world data to pull from.

🗺️ ON THE MAP
WHERE MULTIFAMILY CAPITAL IS MOVING IN 2026

Multifamily sales barely budged in the first half of 2026, but the money moved. National volume totaled $41.1 billion, down 0.3% YoY, even as the number of properties sold rose 7.1% to 1,230. The average price per unit fell 5.8% to $188,401, so more buildings traded at lower prices.

The 10 metros with the highest sales volume pulled in $16.4 billion, up 20.9% YoY. That gave them 39.9% of national volume, up from 32.9% a year earlier. Everywhere else, volume fell 10.7%. Across those leaders, Renters by Necessity investment grew almost three times as fast as Lifestyle volume.

1. Chicago: Sales jumped 94.8% to $2.8 billion, and units traded more than doubled to 12,915, even as price per unit fell 12.6%.

2. Washington, D.C.: Volume climbed 73.6% to slightly more than $2 billion, with Renters by Necessity sales more than doubling to $728 million.

3. Miami: Sales rose 36.4% to $1.8 billion as Renters by Necessity volume more than tripled, from $118 million to $436 million.

4. Atlanta: Volume fell 12.7% to $1.8 billion. Price per unit rose just 1.8%, so the drop came mostly from fewer trades.

5. Dallas: Sales slid 14.3% to $1.7 billion as both asset classes lost ground and price per unit fell 5.9% to $158,503.

6. Phoenix: Volume dropped 24.6% to $1.5 billion, the steepest decline in the top 10, even as price per unit rose 3.7% to $271,503.

7. Los Angeles: Volume edged up 0.5% to $1.3 billion while price per unit jumped 17.5% to $356,133, the fastest increase in the ranking.

8. Northern New Jersey: Volume more than doubled to $1.2 billion, up 103.5%, the biggest percentage gain in the ranking, as more deals closed at lower prices.

9. Houston: Sales rose 12.4% to $1.2 billion on 11,117 units, while price per unit fell 14.6% to $106,636, the lowest in the top 10.

10. San Jose: Sales rose 55.3% to nearly $1.2 billion on just 16 properties, at the ranking's highest price per unit, $448,083.

Capital is still active, but it's picking its spots. Outside the top 10, volume fell 10.7%, so owners planning exits elsewhere are selling into a smaller pool of capital. Inside the top 10, falling per-unit prices in Chicago, Dallas, and Houston give buyers lower entry points and reset the comps sellers there will be measured against. Renters by Necessity assets are drawing much of the growth, too. In Houston, they accounted for the market's entire gain.

🎙️ THE BEST EVER CRE SHOW
THE RISING COST OF FINDING CHEAP LAND

In 2008, one land investor could send 500 postcards and buy a lot or two. His first cost $331, plus the back taxes, and sold for $1,900 a couple of weeks later. Today, he needs 5,000 to 10,000 mailers to land one solid deal. More investors are mailing the same owners, and every offer convinces those owners their land is worth more.

This week on the Best Ever CRE Show, Seth Williams, who runs the land investing site REtipster, joined Ash and Amanda to explain how he keeps land flipping profitable as the cost of finding each deal climbs.

• Make Each Deal Bigger: Seth thinks competition peaked around early 2024 and has thinned as investors quit. Even so, a closing now takes 10 to 20 times as many mailers, and it has to pay for all of them, so small-margin flips no longer pencil. "The juice has to be worth the squeeze," Seth said.

• Price the Exit First: Seth assumes a quick sale will mean taking 60% to 70% of market value, then works backward to his offer, which can run as low as 30% to 50% of value. He targets residential lots, which cost absentee owners taxes every year and earn them nothing. Farmland pays its owners, so it's a much harder sell at that kind of discount.

• Automate the First Pass: Seth connects Claude Code or Codex to a land data platform's API, which flags slope, wetlands, floodplains, and road access and pulls MLS comps. He says that covers 85% to 90% of his due diligence. The rest still takes a site visit and sometimes a survey. He knows investors who discovered a pig farm down the street only after they bought.

When a lot won't sell, Seth says, the mistake usually happened at purchase, when the buyer skipped due diligence or overpaid. Seth also works the other side of the table, funding other investors' land deals, since banks rarely lend on raw land without a plan to build.

👉 Listen to Seth’s full episode here.

👋 Hello, Best Ever readers!

In today’s newsletter, a landmark housing law stalls, new SBA rules take effect, Airbnbs backfire, a developer offers residents $10,000, and much more.

Today’s edition is presented by Headway Capital. A rare West Houston multifamily opportunity has just opened up. Fuse at Park Row, a 318-unit apartment community in Houston’s Energy Corridor, is being acquired at roughly 36% below the seller’s all-in basis — a difference of about $24.8M across the property. Learn more.

🎓 October 8 at 1 pm ET: The Real Estate Investor's Guide to Private Lending. What should you actually look for before putting your money into a private lending deal? Learn how to evaluate the lender, the loan portfolio, and the risk beyond LTV. Save your seat →

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏨 SBA Shift: New SBA rules for acquisition loans take effect today, raising minimum debt service coverage from 1.15x to 1.25x and requiring it on historical earnings, not projections. That could squeeze owner-operated hotel buys in the $1 million to $5 million range.

💸 Airbnb Backfire: Vacation homes have become hard to sell as short-term rental returns slip. In Gatlinburg, TN, annual booking revenue now typically runs 7% to 8% of a home's price, below the 10% bar investors cleared easily in 2021.

🛏️ Studio Surge: One-person households have grown to 29% of U.S. households, up from 20% in 1975. In suburban Palm Beach Gardens, FL, a developer that expected studios to be its toughest units to rent leased 20 of 22 within two months.

📉 Price Split: Smaller CRE properties have gained ground as larger ones slide. An index tracking lower-priced deals rose 1.4% in August to sit 0.5% below its March record, while a measure of bigger sales fell 1.3%, its fifth straight monthly decline.

📦 Big Boxes: OKC has kept the top spot in a big-box logistics ranking of the 54 largest U.S. markets, followed by Hartford and Cleveland. Tight supply lifted all three. Cleveland's industrial inventory grew just 1.5% in five years vs. 10.8% nationally.

🏆 TOP STORY
WHY THE BIGGEST HOUSING LAW IN DECADES IS STUCK

Washington is running on a stopgap. A continuing resolution keeps the government funded through December 11, and the biggest housing law in three decades is stuck waiting for its funding.

The 21st Century ROAD to Housing Act sailed through Congress with lopsided bipartisan votes and became law in July. But the law doesn't fund itself. Its new grant programs need money from the annual spending bills, and Congress hasn't passed a full-year bill for FY2027, which starts today, October 1. A House committee approved its version in June. The Senate hasn't released one. Until Congress funds them, those programs exist only on paper.

What that means for operators depends on the provision. Some changes took effect with the law itself. Others need agencies to issue guidance, and the grant program built for conversions needs Congress to fund it.

• Already Law: FHA multifamily loan limits got their first statutory raise since 2003. Per-unit caps that held the program back for more than two decades roughly triple or quadruple. From here, the limits adjust with a Census index of multifamily construction costs instead of CPI.

• Waiting on Guidance: Owners with layered financing should see fewer duplicate inspections. A LIHTC, HOME, or USDA rural housing inspection can satisfy the voucher program too, and new voucher landlords can get units pre-inspected. But according to the National Apartment Association, nothing changes on the ground until agencies issue joint guidance.

• Waiting on Bank Regulators: The law lets banks put up to 20% of their capital and surplus into public welfare investments, up from 15%. That opens more room for LIHTC equity. Guidance from the OCC and the Fed is still pending.

• Waiting on Congress: The new RESIDE pilot would give states and localities $1 million to $10 million grants to turn vacant warehouses, malls, strip malls, and hotels into housing through FY2031. Only those already receiving HOME funds qualify, and only if Congress pays for it. The House committee's bill would also cut HOME itself to $500 million, down from $1.25 billion.

The apartment industry is already playing the long game. Three days after the bill became law, the NAA went back to the Treasury Department for a technical clarification on the build-to-rent exemption. Now it's lobbying Congress for the money. As its lobbyists told Multi-Housing News, a funding delay doesn't erase a law. The programs just wait.

THE BOTTOM LINE

December 11 is the next date to circle. That's when the stopgap runs out, and whatever replaces it will show whether Congress puts real money behind the law's new programs. Until then, operators can count on the parts of the law that never needed a check from Congress.

🤝 TOGETHER WITH HEADWAY CAPITAL
318 UNITS. 36% BELOW SELLER’S BASIS. $24.8M BASIS ADVANTAGE

Headway Capital Investments is launching Fuse at Park Row, a 318-unit value-add multifamily acquisition in West Houston’s Energy Corridor / Katy Freeway corridor.

The opportunity stems from the seller’s capital structure rather than a distressed asset. The current owner acquired the property in 2022 for approximately $185K per unit and is roughly $216K per unit all-in. With a recourse loan coming due, the seller has elected to exit around the loan balance.

Headway and its partners are acquiring the property for approximately $138K per unit — 36% below the seller’s all-in basis, creating an estimated $24.8M basis advantage across the 318 units.

The investment combines a reset acquisition basis with an established West Houston location, value-add rent upside and long-term fixed-rate Freddie Mac financing.

Projected investor returns include:

• 16.41%–18.59% IRR

• 2.00x–2.18x Equity Multiple

• ~7.1% Average Cash-on-Cash

• $50K Minimum Investment

🎓 BEST EVER LIVE EDUCATION
WHAT IF YOU COULD SEE THE RISK BEFORE YOU INVEST?

Most real estate equity deals ask you to underwrite what might happen. Private lending gives you a different set of data to work with.

In The Real Estate Investor’s Guide to Private Lending, Property Llama co-founders Richard McGirr and Chris Lopez break down how they evaluate private credit opportunities.

You’ll learn:

• How to evaluate a loan portfolio using actual performance data

• What to look at beyond LTV when assessing risk and protecting principal

• How to evaluate the lender and their track record before investing

• How private lending compares to equity investing from a risk and return perspective

Their perspective comes from $40M+ in private lending partnerships and 100+ loans without losing a dollar of principal across those loans.

Live October 8 at 1 PM ET

💰 CRE BY THE NUMBERS
RENT GROWTH, NEW JOBS, A $10,000 INCENTIVE, AND MORE

 

📈 2.2%

National multifamily rents rose 2.2% YoY in August, up from 1.9% in July, marking five straight months of accelerating annual growth. About 74.6% of U.S. metros posted monthly gains, the highest share since March 2023. For operators, the recovery is becoming less dependent on a few outperforming markets as the post-pandemic delivery wave is gradually absorbed.

Turning Points: Only 16 of the 100 largest metros still show YoY rent declines, and 14 of them posted monthly gains in August, including Austin, Dallas, Denver, Houston, and Tampa.

🏗️ 55%

About 55% of surveyed contractors delayed, canceled, or scaled back at least one non-data-center project over the past six months, and one-third of firms named rising construction costs as the main reason. Construction input prices rose 1.2% from July to August and nearly 9% YoY.

Cost Relief: Not every cost line is climbing. Middleburg Communities reported total construction costs down 1% to 2% YoY, and Palladius Capital Management said slower activity has made some subcontractors more willing to accept reduced fees.

💵 $10,000

NorthPoint Development has offered $10,000 to each of the 4,500 households in Hazle Township, PA, a $45 million payout, if the town lets it build the first of 15 data-center buildings planned on 1,300 acres. The township rejected the project on zoning grounds, and the developer is suing. Developers increasingly offer towns packages worth tens of millions, but direct cash to residents is new.

🏠 $1.8 Billion

Up to $1.8 billion in annual rental payments could be at risk if HUD caps how much Continuum of Care grantees can request for permanent supportive housing at 30%. The program funds thousands of private-market leases, including rapid rehousing tenants in Class B and C apartments, so landlords could face missed rent checks or vacancy spikes, and lenders may offer less favorable terms.

Grant Backlog: Of roughly 6,400 grants HUD was required to renew from the 2024 funding round, only about 5,300 have been fully executed, leaving more than 1,000 still waiting.

💼 90,000

Private employers added 90,000 jobs in September, beating the 68,000 consensus and rebounding from a downwardly revised 36,000 in August. Education and health services led with 55,000 hires, while leisure and hospitality added 22,000 and construction added 15,000.

🌟BEST EVER PITCH SLAM
CHRIS LENOIR GOES BACK TO BACK

The judges and audience have decided … the Pitch Slam title stays with Chris Lenoir of Haverkamp Group for another month!

Chris successfully defended his Pitch Slam championship yesterday with his 55+ development project in Omaha, NE, but this one came down to the wire.

The final vote ended in a 4–4 tie, leaving it up to the audience as the tiebreaker. 58% chose Chris, giving him his second consecutive Pitch Slam victory.

Now he’ll have to do it again.

Chris returns October 28 at 12 pm ET to defend his title against four new challengers and see if he can make it three in a row.

🎙️ THE BEST EVER CRE SHOW
FROM 100 REJECTIONS TO A $101 MILLION SALE

After roughly 100 rejections, the first yes finally came through. A few days later, the investor followed up by email. They'd toured the site. They were passing. They didn't think the deal would raise money at all.

This week on the Best Ever CRE Show, Chris Tourtellotte, managing director of LaTerra Development, joined Richard McGirr to explain how that deal got built anyway. The project was 228 apartments in Santa Ana, California. Until then, LaTerra had mostly entitled land and sold it to builders, so this was the firm's first ground-up apartment development.

• Borrow the Balance Sheet: The construction lender wanted guarantors with a net worth equal to the loan amount and liquidity equal to 10% of it. LaTerra had neither, so it brought in a co-GP to cover the covenants and contribute roughly 75% of the GP capital. "No harm in getting a co-GP at all," Chris said. It's how the firm scaled.

• Keep Dialing: LPs balked at a first-time developer in a fringe location. Chris kept pitching until, by his rough count, the 118th investor bought in, sold on the land basis and an incoming light rail line. The project cost about $75 million and sold for $101 million.

• Go Top-Down: Most developers start small and work their way up. Chris skipped that step, just as he had when he co-founded SnowGlobe as a full-scale music festival rather than starting with club shows. Entitling, capitalizing, and building eight units takes about the same work as 228, he argues, for a fraction of the payoff.

Chris also sees the window for development reopening. He says value-add and opportunistic funds are struggling to hit their 18% to low-20s IRR targets buying existing multifamily, so some are returning to ground-up deals.

With starts down 70%, he expects developers delivering in 2028 or 2029 to be well rewarded. The bar is still high, though. According to Chris, good locations, cost-effective design, a low land basis, and shovel-ready sites are the price of admission.

👉 Listen to Chris’s full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, rents circle back, inflation vs. CRE, megadeals skew sales, retail reverses, distress triples, and much more.

Today’s edition is presented by DealRiff. The world’s first 60-second deal analyzer is here. DealRiff wants to save you 100 hours this year and empower you to make more offers, faster. Get from OM to Offer in 3 minutes.

🎤 Pitch Slam LIVE is this Wednesday at 12 pm ET. Four deals. Seven judges. One champion. Register now to watch the event live.

🎓 Missed our live workshop with private capital expert Marcin Drozdz? The replay is now available.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🌡️ Hedge Check: Inflation protection in CRE has varied widely by subtype, a new analysis of industrial, retail, and office properties shows. Warehouses and malls have shown evidence of turning rent gaps into income as leases rolled, while flex, several strip-center formats, and the office sector have lagged.

👺 Megadeal Mask: August CRE sales volume jumped 127% YoY to $107 billion, but $70 billion came from M&A-type deals. Strip those out, and sales fell roughly 21%, with office, retail, hotel, and data center volume all down.

📦 Storage Slide: Advertised self storage rents fell 1.9% YoY in August to $16.39 PSF, deepening from July's 1.6% drop, even as under-construction supply shrank to 2.1% of existing inventory. Only four of the top 30 metros posted annual rent growth.

🛍️ Shelf Space: Retailers have opened a net 127 stores this year, reversing 1,954 net closings over the same period last year. Yet with vacancy near 4.4%, retail completions hit a record-low 5.2M SF in Q2 as construction costs outpace rent growth.

🏘️ BTR Competition: Raleigh, Sacramento, and Jacksonville are expected to see a meaningful rise in build-to-rent deliveries over the next two years. Nationally, BTR completions have dropped below 60,000 units on a trailing 12-month basis, down from a peak above 70,000.

🏆 TOP STORY
6 YEARS OF CHAOS, A $5 DIFFERENCE, AND ONE BIG SPLIT

Six and a half years of rent chaos have added up to almost nothing. The surge of 2021 and 2022 and the cuts that have followed since 2023 have canceled each other out so neatly that the national median rent now sits just $5 below where steady growth would have put it, according to new Apartment List analysis.

From 2017 to 2019, rents grew about 2.5% a year. Had that pace held, the national median would be $1,395 today. In August, it came in at $1,390. Roughly half of markets run above that trend line and half below, from Buffalo at 37% above to Austin at 15% below.

That spread is where the underwriting happens. RealPage's latest numbers suggest it's widening, with the Midwest still posting gains while the most supply-heavy markets are forecast to barely move through mid-2027.

• Midwest Momentum Holds: Many Midwest and Northeast markets already sit above trend, and the Midwest keeps adding to its lead. The region led the country with 2% annual rent growth through August, including 5.1% in Milwaukee and 2.6% in Chicago. RealPage ties those gains to manageable new supply and projects 3.5% growth in Milwaukee through Q2 2027. That makes local permits and construction starts the early warning for when the run slows.

• Supply-Heavy Markets Lag: San Antonio rents fell 3.7% YoY in August, with occupancy at 93.1%. Through Q2 2027, RealPage expects growth below 1% in Austin, Denver, Tampa, and Fort Worth and slight declines in Houston and San Antonio. A pro forma running a national 2% to 3% growth rate here overstates the next two years of income.

• Phoenix and Austin Turn: Annual rent cuts in both markets narrowed to roughly 1% to 1.4% in August, down from far steeper declines earlier this year. Phoenix rents sit 25% below where the metro's own 2017–2019 pace would have taken them. Buyers here acquire at rents that have already reset, and declines across the construction-boom markets appear to have bottomed out. Returns depend on debt that can carry flat rents for another year or two.

The national picture is steadier. Occupancy held at 95.5% in August, up 90 bps this year, and RealPage forecasts about 1.9% national rent growth through Q2 2027. Apartment List sees 2027 as potentially the first year of low-single-digit growth since 2019.

THE BOTTOM LINE

The national median is back on its long-run track, but almost no one owns the national median. A market's position against its own trend line and its supply pipeline now say more about rent upside than any national forecast. Above-trend markets with tight occupancy carry pricing leverage on renewals, while in San Antonio, holding residents protects NOI more than pushing rents.

🤝 TOGETHER WITH DEALRIFF
FROM OM TO OFFER IN 3 MINUTES

It’s no longer painful to receive a 40-page OM from your broker. Sifting through sales fluff for a few key data points is for OTHER people, not you.

DealRiff takes you from OM ➡️ OFFER in 3 minutes. The underwriting and pro forma are done in about 60 seconds. That's up to 30x faster than ChatGPT with no scripts, no tokens, and no special skills needed. We built this for SPEED.

👉 Save 100 hours a year on underwriting/admin.

👉 Make more offers, faster.

👉 Get underwriting insights, a pro forma, and more automatically.

👉 Run different scenarios, then compare them side by side.

👉 Share the results with anyone, anytime.

👉 Enter your financing model, or export to Excel for use with another model.

Exclusive for Best Ever Readers: For the first 100 to sign up, buy 6 months, get 6 months free!

🎤 BEST EVER PITCH SLAM
PITCH SLAM LIVE IS THIS WEDNESDAY

Best Ever Pitch Slam LIVE is this Wednesday. Four CRE operators will pitch real opportunities to seven active capital allocators looking to place $10M. And you’ll be the 8th judge.

THE CHALLENGERS

🏆 Chris Lenoir | Haverkamp Group — Defending champion pitching a 286-unit, 55+ housing opportunity in Omaha with a $14.1M target raise.

🏭 Donato Callahan | Timberview Capital — A 174,784 SF NNN industrial opportunity across Michigan and Minnesota with a $2M target raise.

💰 Seth Weis | Reign Funding — A CRE debt fund from a team with 14 deals in its track record and $20M in capital raised.

🏢 Sid Shamim | Headway Capital Investments — A 318-unit multifamily opportunity in Houston with a $6.5M target raise.

THE JUDGES

Seven active capital allocators with a combined $248.8M in reported lifetime capital raised:

Sujata Shyam | LuXE Capital — $20M raised
Morgan Keim | Ocean Ridge Capital Partners — $20M raised
Kimberly Workman | SoLa Capital — $11.8M raised
Chirag Chaudhari | The Syndication Doctor — $20M raised
Thomas St. John | North Corp Capital — $25M raised
Marci Surfas | Veranda Capital — $12M raised
Sam Silverman | Silverman Capital — $140M raised

Each challenger gets 4 minutes to pitch + 5 minutes of live Q&A before the judges (and the audience) vote Pursue or Pass.

💰 CRE TRENDS
DISTRESSED APARTMENT SALES HAVE TRIPLED IN A YEAR

The bill for 2021 is coming due. CRE CLO loans written that year were often structured with a three-year term and two one-year extensions, which puts many of them near final maturity now, just as the Fed has raised rates for the first time in three years.

Distress in CRE CLOs jumped from 19% in July to 28% in August, with 2021 loans driving most of the increase. In one pool now made up almost entirely of apartment loans, 53% of the remaining balance is delinquent.

• The Renovation Math Broke: At a five-property apartment portfolio in Georgia and Texas, first-quarter rents averaged $1,423 against the $1,953 the lender projected, leaving income to cover just 57% of debt service. One CRE financial-services executive says upgrading workforce units no longer reliably earns a rent premium.

• Modifications Follow the Plan: Owners with a solid plan to raise operating income may get a loan modification, according to one asset management executive. For owners holding out for lower rates without one, he says it's past the point of no return.

• Distressed Sales Are Climbing: Distressed sales made up 4.7% of multifamily deals in Q2, up from 1.5% a year earlier. Troubled apartments have finally started to trade.

In the most troubled pool, more than 90% of the loans have already been modified or granted forbearance, and five properties now face foreclosure. For many 2021 borrowers, the final extension is close, and the Fed just made floating-rate debt more expensive.

🎓 BEST EVER LIVE EDUCATION
REPLAY NOW AVAILABLE

Missed our live workshop with private capital expert Marcin Drozdz? The replay is now available.

Learn how to build a predictable investor pipeline, turn investor interest into committed capital, and create a repeatable system you can use across future raises.

🎙️ THE BEST EVER CRE SHOW
WHY THE 10-YEAR HOLD GOT EASIER TO SELL

Opportunity Zone deals look like an easy raise on paper. In practice, a 10-year hold made the first version of the program a tough sell to individual investors. OZ2, which applies to gains invested starting January 1, 2027, gives sponsors a stronger pitch, and Anna-Marie Allander Lieb is testing it on a multifamily development outside Portland.

On a recent episode of the Best Ever CRE Show, Anna-Marie joined Richard McGirr to explain how she sells it. After a decade at CrowdStreet, she now raises capital for Kinect Real Estate Partners, a year-old firm that offers American Capital Group's multifamily deals to private wealth investors. ACG raised only from institutions for nearly 40 years. Selling the same deals to individuals has meant rethinking the pitch, starting with the tax math.

• Pitch the Returns After Taxes. OZ2 lets investors defer a gain for a rolling five years, with a 10% basis step-up at the five-year mark. Hold for 10 years or more, and appreciation is free of federal capital gains tax, with no depreciation recapture. Kinect shows investors returns on a post-tax basis, deferral savings and depreciation included.

• Follow the Gain. Much of the capital she sees comes from real estate sales and company exits. To reach those sellers, she works through CPAs, business brokers, and RIAs with tax practices. For anyone sitting on a big gain, Richard noted, a CPA is "the first person you call."

• Bridge the Equity. The sponsor is putting up 35% of the equity, a $14 million co-investment, and bridging the rest with a convertible note. That lets LPs come in whenever their gain lands, closing the timing gap that tripped up Richard's own OZ1 raise.

The pitch still rests on the asset. Anna-Marie says the Gresham project's 305 units will be the only new supply delivering in Multnomah County in 2028. With land contributed at about $13,000 a unit and an 80% vertical tax abatement, she says it pencils to an untrended 6.4% yield on cost before any OZ benefits.

👉 Listen to Anna-Marie’s full episode here.

👋 Hello, Best Ever readers!

In today’s newsletter, operators spend (and save), Halloween hits retail, appraisals come earlier, surveillance gets scrutinized, sale-leasebacks slide, and much more.

Today’s edition is presented by Reign Funding. While most investors are still waiting for equity returns to recover, Reign Funding’s private credit fund gives accredited investors access to a recourse-backed portfolio of short-duration CRE loans targeting 17–20% annual returns, with zero principal losses to date. Learn more.

🚨 TODAY at 1 PM ET: Join private capital expert Marcin Drozdz for a free workshop on building a predictable investor pipeline before your next deal hits. Save your seat →

🌟 The Inner Circle has changed a lot in the past 30 days. New ways to source capital. New ways to find deals. And a pretty valuable bonus for operators who join now. See what we’ve added before pricing increases October 1.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🎃 Retail Haunts: Spirit Halloween has opened a record 1,550-plus stores this year, even with national retail vacancy at just 4.4%. Its stores take spaces from 5,000 to 50,000 SF, and its ideal lease runs three months, letting landlords kick it out for a permanent tenant.

🏦 Debt Wall: Apartment landlords have more than $1.8 trillion in debt due over the next decade, including $757 billion by 2028. Many face refinancing at roughly twice the rates they locked in. Some are preparing to sell at a loss or hand back the keys.

🔍 Appraisal Shift: Owners and lenders are increasingly bringing in appraisers before committing capital, using early valuations to test assumptions and flag risks. The shift comes as roughly $875 billion of the $5 trillion in outstanding commercial and multifamily mortgages is expected to mature this year.

💰 Seven Again: The average 30-year fixed mortgage rate hit 7.12% for the week ending Sept. 18, its highest level since May 2024. The 10-year Treasury has climbed to around 5%. More buyers have turned to adjustable-rate loans, which are running more than a point lower.

👀 Eyes Everywhere: AI video surveillance has spread across CRE, with apartment operators like Greystar among vendors' clients. The systems can flag anything from brandished weapons to mattresses dumped at move-out. As scrutiny of data-sharing grows, vendors now pitch clients on owning their own footage.

🏆 TOP STORY
WHERE OPERATORS ARE SPENDING AND SAVING IN 2027

The most valuable lease an apartment operator can sign this fall is a renewal. Where concessions are offered, new residents are getting nearly six weeks of free rent, according to RealPage, which found 15.8% of stabilized units offering concessions in July at an average discount of 11.1%. One of the country's largest apartment owners, with more than 100,000 units across 16 states, saw residents renew for 5.2% more in Q2 while new leases priced 5.3% lower.

That gap is steering 2027 budgets. Operators interviewed by Multifamily Executive are pulling capital from unit renovations and pointing it toward the residents they already have. Denver-based value-add investor Platte Canyon Capital has essentially stopped renovating for rent upside, taking on interiors only when a unit needs work to be leasable.

The shift reflects a cautious read on next year. Some operators see fundamentals improving but aren't building budgets around a rent rebound, while others are judging spending by the return it generates at each property.

• Retention Gets the Renovation Dollars: Fogelman Properties, which manages more than 35,000 apartments, plans to put more money into resident activities and engagement, offset by slower repair and maintenance growth and potential marketing savings. Where renovations still happen, another investor is matching scope to what each submarket supports, finding that lighter upgrades often return more than full ones.

• Insurance Relief Has a Shelf Life: Multifamily property rates have fallen 5% to 15%, and property insurance rates dropped 10% in Q1. Platte Canyon locked in meaningful savings on its 2026-27 property policy, but its general liability renewal is landing roughly flat, and it's already hearing the market firm up.

• Last Year Plus Inflation Is Out: Some property managers are picking apart what drives each expense, down to waste service frequency and overages. Others are rebidding service contracts and leaning on portfolio purchasing power, while Platte Canyon is budgeting HVAC as an elevated cost amid tight parts and labor.

Technology is where operators split. Fogelman is avoiding new platforms that can't show a clear return. Other operators may pace AI spending to match core growth, while some move the other way, hiring fewer analysts and junior staff and investing in AI tools for acquisitions, asset management, and renovations.

THE BOTTOM LINE

With concession discounts at their deepest in more than 25 years and new-lease pricing still negative in several REIT portfolios, the residents already on the rent roll have become an operator's most reliable source of income growth. The budgets taking shape now bet that protecting that base will do more for 2027 NOI than chasing premiums the market isn't paying. Insurance savings offer a cushion, though at least one operator expects further cuts to get harder to come by.

🤝 TOGETHER WITH REIGN FUNDING
GET PAID LIKE THE LENDER

17–20% targeted returns, secured by real estate and paid ahead of the sponsor's equity.

That's the position Reign Funding puts investors in.

Reign is a private real estate credit lender specializing in mezzanine, participation, and senior bridge loans on multifamily, industrial, retail, and residential assets.

Investors sit on the debt side of the capital stack: secured by real property, senior to the sponsor's equity, and paid a fixed contractual rate, with interest paid current or fully reserved at closing, so returns don't depend on how the sponsor's business plan plays out.

✅ 17–20% targeted annual returns

✅ Zero principal losses since inception

✅ Full-recourse loans at conservative leverage

✅ Short-duration, 12–24 month terms

Open to accredited investors with a $50,000 minimum.

🎓 BEST EVER LIVE EDUCATION
LIVE TODAY: BUILD A PREDICTABLE CAPITAL-RAISING ENGINE

We’re live TODAY at 1 PM ET.

Join private capital expert Marcin Drozdz, who has raised multiple nine figures, for a free workshop on building an investor acquisition system that’s working before your next deal hits.

You’ll learn how to:

• Position your opportunity so investors understand the value

• Build a consistent pipeline of qualified investor conversations

• Turn investor interest into committed capital

• Create a repeatable system you can use across future raises

If you’re tired of starting every capital raise from scratch, there’s still time to join us.

Can’t make it live? Register anyway, and we’ll send you the replay.

💰 CRE BY THE NUMBERS
CONSTRUCTION PACE, SALE-LEASEBACKS, AND MORE

 

🏗️ 18.9 Months

Multifamily buildings took an average of 18.9 months from permit to completion in 2025, 0.7 months faster than in 2024 but still 3.5 months longer than in 2009. Projects with 20 or more units averaged 21.7 months. Regional timelines ranged from 16.6 months in the Midwest to 21.9 months in the Northeast. For developers, those extra months add carry time before leasing starts.

Bigger Builds: Buildings with 50 or more units made up 57% of multifamily buildings in 2025, up from 43% in 2009. Larger projects take longer to complete, which explains part of the longer timelines.

💼 67%

Suburban areas now hold 67% of U.S. coworking locations after growing 39% since 2024, nearly twice the 22% pace of urban locations. Suburban spaces also run smaller, averaging 15,185 SF versus 22,827 SF in urban markets. For office owners, coworking offers another use for space that has been difficult to lease conventionally.

🏢 12%

Office CMBS delinquency reached 12% in August, near a record and above its post-2008 peak. Almost $40 billion of the roughly $64 billion in office CMBS maturing this year and next is delinquent, in default, or on a watchlist. Distressed office sales this year have brought in 20% less than recent appraisals, and those price resets are drawing buyers back to deeply discounted buildings.

🔄 -67.6%

Sale-leaseback volume fell 67.6% YoY to $1.3 billion in the first half of 2026, even as overall net lease sales hit $13.8 billion in Q2, the strongest second quarter since 2022. Sale-leasebacks made up just 6.7% of net lease transactions in Q2, about half their 13.1% average since 2019. Investors have held back as returns and tenant credit fell short, steering capital toward traditional net lease acquisitions.

Industrial Takeover: Industrial now accounts for 61.5% of national net lease sales volume, up from roughly a third a decade ago. Office's share has fallen from nearly 40% to 13.2% over the same period.

🌟BEST EVER INNER CIRCLE
INNER CIRCLE PRICING INCREASES OCTOBER 1

 

The Best Ever Inner Circle keeps getting bigger: in size (54 members and counting!) AND in what members actually get from it.

In the past 30 days alone, we’ve added LP Lessons Unfiltered, giving members recurring opportunities to meet accredited LPs, and our new Distressed Deal Pipeline, built to surface off-market opportunities in the markets members are targeting.

They join benefits like Pitch Slam LIVE, LinkedIn Passive Investor Lead Generation, an in-house securities attorney, weekly strategy sessions, underwriting reviews, and a whole lot more.

That's why Inner Circle pricing increases October 1.

There’s also a pretty valuable reason to join now: new members receive 4 lead sponsorships in the Best Ever newsletter, putting you in front of our audience of 58,000+ CRE investors.

Curious what the Inner Circle actually looks like today?

Explore the benefits. Hear directly from members. See what we're building. And if it looks relevant to where your business is headed, book a quick call with AJ before October 1.

You don't have to join before the deadline. As long as your call is booked before October 1, we'll honor the current lower price if you decide to join. And that price is locked in for the life of your membership.

Plus, you have 30 days to experience the group. If you don't believe it's valuable for your business, you'll receive a full refund.

🎙️ THE BEST EVER CRE SHOW
THE $3 MILLION LOSS THAT SIGNALS WHAT’S NEXT

It's been roughly three years since good multifamily deals were easy to find. According to Carson Jones, a Nashville-based broker and investor, that's starting to change. Rescue capital propped up apartment assets that should have traded lower, creating a false pricing floor, and owners are finally running out of room.

On a recent episode of the Best Ever CRE Show, Carson joined Matt Faircloth to explain where he sees the next buying opportunity and how operators can get to it first.

• Sellers Are Capitulating. Carson is already seeing off-market deals where owners are ready to walk away at a loss, including a Georgia owner prepared to take a $3 million hit. Others will refinance, cut ties, or hand back the keys, and banks will sell at a discount.

• Work the Lender, Not the Listing. As a broker, Carson can spot a deal that's too far underwater long before it trades. When he does, he reaches out to the bank directly. "I'm not trying to be predatory, but I'm trying to be smart," he said. His logic is simple: if someone is going to get the opportunity, it may as well be his investors.

• Underwrite the Supply. The 2021 mistake, Carson says, was buyers assuming a bad outcome meant a 10% return instead of 20% — without accounting for the construction pipeline or a slowdown in migration. Phoenix, Austin, and Nashville all got overbuilt. "You have to have an eye on supply," he said. He sees the same pattern forming in industrial, where Carson recalls close to 10M SF under construction in the Nashville MSA.

Carson's focus is Class B and C, where he expects repricing to be sharpest, since Class A has historically held its value better through downturns. The hard part is raising equity. Matt, who lives by the adage “observe the masses and do the opposite,” agrees with the thesis, but notes that many LPs still feel like they'd be catching a falling knife.

👉 Listen to Carson’s full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, robots save construction, Bugatti does residential, a crypto bill collapses, LPs go big, starts tank, and much more.

🎓 Still raising capital one deal at a time? Join private capital expert Marcin Drozdz, who has raised multiple nine-figure rounds, for a free workshop on building a predictable investor pipeline that works before your next deal hits. Save your seat →

🌟 Want 50 new accredited investor leads every month? See how the Inner Circle is helping CRE operators get in front of more capital. See what’s inside.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🪙 Crypto Collapse: Senators rejected the Clarity Act 49-50 on Tuesday, 11 short of advancing crypto's market structure bill. It would have set rules for tokenizing real-world assets, including real estate, and split oversight between the SEC and CFTC.

📉 Starts Tank: Multifamily starts plunged nearly 22% in August, dragging total housing starts down 2.6% to a 1.28 million annualized pace. Single-family starts climbed 7.6%, while permits and completions fell 2.7% and nearly 12%, respectively.

📦 Storage Floor: Green Street now expects self-storage NOI to hold flat in 2026 before returning to growth in 2027, with occupancy near 93% and new supply limited to roughly 2% annually through 2030.

🏢 Experiential Office: Australian owners are repositioning the office sector around hotel-style service, adding ice baths and Pilates studios while testing reusable fitouts built for a second and third tenant as AI widens the quality gap.

🏎️ Bugatti Residences: Bugatti has joined Miami's car-branded tower race with a $650 million, 60-story Brickell project holding 183 units. Miami now ranks second worldwide for branded residences, with 73 developments finished or underway.

🏆 TOP STORY
HOW AI COULD CUT BUILDING COSTS BY UP TO 20%

Robots rolled through a 31-story apartment tower in Seattle during construction, shooting 360-degree photos and video of every floor. An AI model checked the images against the blueprints and flagged water leaks, exposed beams, and fire extinguishers hanging in the wrong spot. Skanska's team saved up to 40 hours a week that would have gone to walking the site.

That is AI on a job site today. A new white paper from Suffolk and MIT models what happens when it runs the whole build. Suffolk applied that model to a 180,000 SF San Francisco apartment project finished in 2024 and estimated AI could have cut construction costs 17% to 20% and the schedule 22% to 25%.

The margin math matters more. Those savings would have added 5 to 6 percentage points to unlevered IRR and 1 to 2 points to yield on cost, which the report calls the difference between housing getting built and not. With 75% of projects running late or over budget and labor inefficiency wasting $30 billion to $40 billion a year, the room to improve is enormous.

• Six Places the Money Hides: The report points to design automation, offsite manufacturing, permitting, scheduling, skilled labor and subcontracting, and supply chain and procurement. Permitting alone runs through more than 20,000 independent jurisdictions, each with its own codes and clock.

• Small Contractors Are Already In: Large firms are building their own systems, while smaller ones get it through Autodesk and Procore, which embed AI in software they already use. "Even if smaller contractors don't have all the bells and whistles, they're still dipping their toe in the water," construction technology consultant Erin Khan, a former Suffolk executive, told CoStar.

• The Tools Are in Preconstruction First: Contractors are using AI to evaluate opportunities, analyze RFPs, and speed up estimating, according to Khan, who was not involved in the study. Those are the same steps that set a renovation budget, which gives operators a reason to ask what their GC is running before the next bid comes back.

• Cheaper Building = More Building: Projects that do not pencil today could work at a 20% lower cost basis. For operators buying existing product, that cuts both ways, since the savings that make a development viable can also add competing supply.

None of it happens automatically. Khan says results depend on how teams implement the tools and share data. The authors call their own findings directional rather than validated, and MIT's James Scott says the industry needs a stronger evidence base.

THE BOTTOM LINE

The 17% to 20% is a first-pass model of one project, and nobody has banked those savings yet. What operators can act on today is the preconstruction software their contractors already have, and the questions worth asking before signing the next contract.

🎓 BEST EVER LIVE EDUCATION
STOP STARTING YOUR CAPITAL RAISE FROM SCRATCH

For many operators, raising capital still means going back to the same LP list, working existing relationships, and scrambling to fill the next deal.

What if you had a system already running before the next opportunity landed?

In our upcoming webinar, private capital expert Marcin Drozdz will break down the Investor Acquisition System he uses to help operators build a more predictable capital pipeline.

You’ll learn how to:

• Position your opportunity so investors understand the value

• Build a consistent pipeline of qualified investor conversations

• Turn investor interest into committed capital

• Create a repeatable system you can use across future deals and funds

Marcin has raised multiple nine figures and his team has advised 1,000+ operators, fund managers, and capital allocators on capital-raising systems.

💰 CRE TRENDS
WHY LPs ARE BETTING ON SIZE OVER RETURNS

Smaller fund managers have outperformed the largest alternative asset managers since around 2015. So why did LPs send 78.2% of this year's private capital to billion-dollar funds?

The answer is caution. With less cash coming back from existing funds, LPs have less to commit, and they are steering it toward bigger managers they see as safer because of their size. That billion-dollar share was 59.1% in 2021.

Fundraising has slowed almost everywhere. Private capital is on pace for a fifth straight annual decline, and real estate is on track for its slowest year since 2012.

• Local Knowledge Is the Edge: Newer real estate managers often focus on niche property types or secondary markets, where PitchBook sees more potential to find returns than large, diversified funds offer. Since the GFC, emerging real estate managers have edged out established ones in PitchBook's simulations.

• Alignment Sells: Smaller managers collect less in management fees, so more of their pay depends on performance, which strengthens their alignment with LPs.

• Downside Is the Real Objection: The weakest emerging real estate funds have historically trailed benchmark median IRRs by 19.4 percentage points. Operators who can show how they protect capital are answering the fear that pushes LPs toward size.

Track records still open doors, even though research PitchBook cites finds they are a poor predictor of future performance. For smaller operators, a clear niche, aligned incentives, and a plan to protect the downside give LPs something more useful to judge.

🌟 BEST EVER INNER CIRCLE
RAISING CAPITAL? WE BUILT THE INNER CIRCLE FOR THIS.

Finding investors shouldn’t start when you have a deal under contract.

The Best Ever Inner Circle is a growth system for experienced CRE operators, and we’ve been building an entire capital-raising ecosystem inside it.

As a member, you can:

🤝 Get 50+ Accredited Investors Every Month
Through LP Lessons Unfiltered, members get access to 50+ accredited investor leads each month, plus the opportunity to meet those LPs live and start building relationships before your next raise.

🎤 Put Your Deal in Front of Active Capital
Present your deals through Best Ever Pitch Slam LIVE and your Capital Raise Presentation, which puts your deal in front of active fund managers looking to place millions.

📣 Build Your Visibility With LinkedIn + AI
Get hands-on help with your LinkedIn content and posting, plus access to AI for CRE Collective Premium to use AI more effectively across your CRE business.

🧠 Learn What’s Actually Working Right Now
Get direct access to operators actively raising capital and working through RIAs, family offices, investor communication, pitch materials, and more.

And that’s just the capital-raising side of the Inner Circle.

If raising more capital is a priority for your business over the next 12 months, this is the room you want to know about.

🎙️ THE BEST EVER CRE SHOW
THE CRUELEST IRONY IN CAPITAL RAISING

Apartment values in parts of the Sun Belt have fallen about as far as they did after 2008. The LPs with the most experience reading that kind of cycle are often still nursing losses from the last run-up.

On a recent episode of the Best Ever CRE Show, August Biniaz, co-founder and chief investment officer of CPI Capital, joined Richard McGirr to talk about winning those LPs back. August estimates prices in markets like Tampa and San Antonio have corrected about 30%, and Richard calls the gap between strong buying conditions and weak fundraising the cruelest irony in the business.

• The Recoup Trade: CPI has a DFW-area apartment community under contract for $23 million from a seller August says is being forced to sell. The seller paid $25.5 million in 2022 and put just under $3 million into renovations, but it still owes $22.7 million, leaving it about $300,000 and its LPs nothing. August says experienced LPs burned on similar deals see a chance to recover in the same cycle. Even with flat year-one rents, he expects to double investors' money in five years if the market performs normally.

• Sponsor Capital Goes First: Richard says LPs care less about the split than about knowing the sponsor loses first. The latest Best Ever Conference Pitch Slam winner put in $30 million of his own money as common equity and raised only preferred equity, so he'd lose it all before those investors went unpaid. With sponsor equity ahead of them, Richard would take a 12% pref over common equity targeting 17%.

• Ad-Driven Raises Have Stalled: August heard that one sponsor raised hundreds of millions with about 95% of his leads coming from paid social ads, then left ads out of the capital-raising course he taught. Richard has heard well-run campaigns now cost about 6% of capital raised, and August says the cheap-ad era is over.

Richard sees a payoff for sponsors who can raise in this market, since the job only gets easier once the cycle turns. The episode also tackles a harder question: whether sponsors who lost LP money last cycle can ever win it back.

👉 Listen to August’s full episode here.

👋 Hello, Best Ever readers! The Fed raised interest rates by 25 bps yesterday, its first hike since 2023, with projections pointing to another hike this year. Get your 🍿 ready.

In today’s newsletter, malls are back from the dead, the OZ rush is on, robots do construction, Airbnb starts a fund, Canadian capital loves the U.S., and much more.

⏰ TODAY at 4 pm ET. Learn what institutional buyers actually want from build-to-rent, and how those requirements shape a project from day one. Save your seat.

🎤 Best Ever Pitch Slam LIVE gives you a front-row seat to the questions capital allocators ask when real CRE deals are put in front of them. Join us Sept. 30th.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🗺️ OZ Rush: Developers nationwide have been lobbying states to nominate their sites for Opportunity Zones 2.0 ahead of the Sept. 28 deadline, as tighter income rules are expected to shrink the national map roughly 25% to 6,544 tracts.

🤖 Bot Crews: Construction robots have cut rework and layout time on individual projects, but those gains remain too narrow to meaningfully shrink a U.S. shortage of roughly 1.2 million homes, compounded by nearly 300,000 unfilled construction jobs.

📦 Indies vs. REITs: Independent self-storage operators have outpaced REITs on pricing, lifting street rates 6.5% YoY in July versus 4.7%. Meanwhile, 731 independent-operator loans averaging $2.6 million mature through 2028, setting up a potential small-deal pipeline.

🧭 Debt Migration: Multifamily lenders have looked beyond the Sun Belt as excess supply weighs on parts of the South, with Indianapolis, Kansas City, and Omaha drawing interest as Midwest rent growth runs 2% to 3%.

🏡 Gap Financing: Airbnb has committed an initial $250 million to below-market gap financing for stalled multifamily projects, prioritizing affordable and mixed-income housing. The first $6.4 million backs roughly 200 affordable units in Austin.

🏆 TOP STORY
HOW MALLS CAME BACK FROM THE DEAD TO TOP CRE

Weak returns in multifamily and office have pushed some investors toward malls, where a lack of new supply has kept occupancy and rent growth firm. Resilient consumer spending and limited retailer bankruptcies have strengthened the case.

Malls are now the top-performing property type in CRE. Values have climbed 13% over the past year, outpacing every other property type and more than doubling the rise in overall CRE prices. Simon Property Group, the country's largest mall owner, saw its shares hit a record high in July for the first time since 2016.

Capital that once fled the sector is coming back. Unibail-Rodamco-Westfield (URW), which announced plans to exit the U.S. four years ago, has committed nearly $1 billion this year to buy out partners at two American malls, and its CEO says the company is seeing rent growth it hasn't seen since the early 2010s. Middle-market centers are gaining too, and the owners behind the comeback share a few habits, though the recovery still carries risk.

• A Tenant Mix Built for Foot Traffic: Top owners have renovated and added tenants online shopping can't easily displace, including luxury retailers, popular restaurants like Din Tai Fung, and entertainment venues. Younger Americans are also frequenting malls to shop and socialize.

• Pruning Before Buying: CBL Properties, which spent a year in bankruptcy, has sold or walked away from more than two dozen malls since 2013. It has bought five properties since July 2025, and its stock has climbed 48% this year. URW also shed weaker regional properties and still owns 14 U.S. malls that rank among the country's best.

• Tenants That Are Harder to Replace: One skeptical portfolio manager warns that the restaurants and entertainment venues filling former department store space can be hard to replace if they close, and argues the land beneath a mall holds its lasting value. Mall values also remain well below their peak a decade ago.

Case Study: CBL's West County Center in St. Louis shows the turnaround up close. In 2022, the 1.2M SF mall had debt coming due while lenders avoided midtier malls, leaving CBL unable to refinance. Its value had fallen 30% over the prior decade, three of its four prime restaurant spaces sat empty, and a nearby mall was pulling sales from its Nordstrom anchor.

Business at its department stores has since picked up after Nordstrom closed its store at the competing mall and Macy's renovated its location. Tenant sales are up 13% since 2023, Cheesecake Factory and Urban Outfitters are set to open later this year, and CBL expects to close a refinancing within 60 days.

THE BOTTOM LINE

After years of being written off, malls rebounded on limited new supply, resilient consumer spending, and owners who cut weak properties and rebuilt their tenant rosters. For operators of any out-of-favor property type, West County Center shows how a stronger tenant lineup and rising sales can reopen a refinancing door that looked shut in 2022.

🎓 BEST EVER LIVE EDUCATION
LIVE TODAY: WHAT INSTITUTIONAL BUYERS WANT FROM BTR

We’re live TODAY at 4 pm ET.

Join Red River Development co-founders Ryan and Steven Watts for The Institutional Buyer’s Spec Sheet, a live look at what makes a build-to-rent community attractive to institutional buyers and how those requirements shape a project from day one.

You’ll learn:

• What institutional buyers want in a finished BTR community

• How product type affects your eventual exit

• Where the development spread comes from

• Why operations and track record matter at sale

Ryan and Steven bring experience from $690M+ developed across seven BTR communities, and today they’re opening up the playbook.

Can’t make it live? Register anyway, and we’ll send you the replay.

💰 CRE BY THE NUMBERS
CANADIAN CAPITAL, MIGRATION IMPACT, AND MORE

 

🇨🇦 $9 billion

Canadian firms spent $9 billion on U.S. CRE in the 12 months ending in June, up from $5 billion in the 12 months through March, despite rising tariffs between the two countries. Multifamily draws more of Canadian firms' global real estate capital than any other sector, giving U.S. apartment owners weighing a sale a cross-border buyer pool unfazed so far by the trade war.

🚚 0.16

Net domestic migration and multifamily revenue growth showed a correlation of just 0.16 across the 25 largest U.S. metros from 2021 through 2025. High-inflow markets led revenue growth through 2023, then lost that edge as new supply delivered, while outflow metros held steadier. For owners weighing new markets, construction pipelines can matter as much as population forecasts.

Boom Reversal: Austin's multifamily revenue growth fell to negative 4.5% by 2025 despite strong population inflows. Phoenix swung from 13.2% growth in 2022 to negative 1.6% in 2025.

💰 46%

Dry powder relative to CRE transaction volume fell to 46% in 2026, the lowest since 2021 and down from a 2023 peak of 97%. The decline reflects both shrinking reserves and rising deal volume, leaving less idle capital waiting on the sidelines. For sponsors raising equity, that can mean stiffer competition for the funds still available.

🏢 36%

Median pricing for office buildings above 500,000 SF remains 36% below Q4 2019 levels, even as those assets climbed back to 18.9% of traded space by Q2 2026 from a low of 8.4%. Smaller buildings have moved the other way, with median price PSF up 42% for properties under 50,000 SF. For buyers, large offices are re-entering the market at a reset basis.

Size Premium: Average office pricing ran about $72 PSF above the median in Q4 2019. That gap has narrowed to roughly $15 PSF as buyers pay less for scale.

🏨 21

U.S. hotel RevPAR jumped 16.1% YoY to $100.31 for the week ending Sept. 5, the industry's 21st straight week of YoY gains, with occupancy up 9.4% to 63%. A Labor Day calendar shift boosted that week's comparison, so the longer streak gives hotel owners a steadier read on demand heading into fall.

🎤 BEST EVER PITCH SLAM
RAISING CAPITAL? PAY ATTENTION TO THE QUESTIONS.

 

You can learn a lot from a four-minute pitch. But at Best Ever Pitch Slam LIVE, pay even closer attention to what happens next.

Seven active capital allocators get five minutes to pressure-test each opportunity. What do they ask first? Where do they push back? What numbers need more explanation? What makes them lean in or pass?

If you're raising capital yourself, those are questions worth knowing before you're the one answering them.

Watch four real CRE deals get put to the test at Pitch Slam LIVE on September 30 at 12 PM ET. Then cast your own Pursue or Pass vote as the 8th judge.

🎙️ THE BEST EVER CRE SHOW
TO BUY OR NOT TO BUY: TWO TOP OPERATORS ARE DIVIDED

Two veteran multifamily operators have studied the same market this year and reached opposite conclusions about whether to buy. Neither has closed on an apartment deal in at least eight months.

On a recent episode of the Best Ever CRE Show, Brian Burke of Praxis Capital and Andrew Cushman of Vantage Point Acquisitions joined J Scott to debate whether a market that J estimates has fallen 30% to 35% since 2022 has found its floor. Burke has invested for 37 years, and Cushman has spent 15 in multifamily. Their debate over when to buy is one every operator faces.

• The Case for Waiting: Burke still sees apartments trading at 5.5% cap rates against 6.5% to 7% debt, leaving buyers with negative leverage and no premium for guessing the bottom. With national vacancies and concessions still elevated, he would rather confirm the upturn and ride a long recovery from there.

• The Case for Buying Now: Cushman says fear creates the entry point. Assets trade only every five to seven years, and once capital flips from cautious to crowded, cap rate compression rewards whoever already owns. He sees the math favoring five- to 10-year holds over two- to three-year plays.

• The Arbitrage Exception: A run-down property with rents far below market can pencil in any cycle. Burke calls that arbitrage, closer to flipping a house than betting on the market. Cushman underwrites those renovated rents at today's levels and holds them flat for two years.

In practice, the gap between them narrows. Cushman's team hasn't found a deal that works on today's numbers since last October, and nothing sits on the horizon. After the last downturn, recovery took about five years, he says — and this cycle is already more than four years in. Burke left the door open, saying his view on buying might change if asked again next year.

👉 Listen to the full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, renters turn from the sun, units sit empty, rates (might) rise, tertiary markets thrive, storage deals move, and much more.

This edition is presented by Headway Capital. A rare West Houston multifamily opportunity has just opened up. Fuse at Park Row, a 318-unit apartment community in Houston’s Energy Corridor, is being acquired at roughly 36% below the seller’s all-in basis — a difference of about $24.8M across the property. Learn more.

🎓 September 17 at 1 pm ET: The Institutional Buyer’s Spec Sheet. Learn what makes a BTR community attractive to institutional buyers — and where investors can participate in the value created. Save your seat.

🔓 Accredited LPs: Learn from the wins, losses, and hard-earned lessons of an investor with 40+ passive deals. Then connect with fellow LPs and experienced CRE operators in an intimate live mixer. RSVP here.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

⚖️ Pinnacle Settles: Pinnacle Property Management Services has agreed to settle with the Justice Department in the RealPage antitrust case, pending court approval, leaving Camden Property Trust as the only landlord defendant yet to reach a deal.

🏦 Rate Hike: Fed officials have signaled they're prepared to raise rates at the September 15-16 meeting if inflation fails to improve, though the main drivers behind the current numbers — tariffs, oil prices, and AI spending — appear largely insensitive to borrowing costs.

🏚️ Empty Units: Income-restricted units are sitting empty in Austin, Denver, and Portland as 60% AMI rents approach market rate. Austin's affordable vacancy is near 16%, and only about 12% of units financed through LIHTC in 2024 targeted extremely low-income renters.

📦 Storage Status: Self-storage completions are forecast at 53M SF in 2026, the smallest delivery slate since 2016, while transaction counts rose nearly 20% YoY and deal volume nearly 50% through June. Asking rents are expected to fall a fourth straight year.

🎓 Gen Z: Pittsburgh has taken the top spot among midsized cities for Gen Z, edging Madison by one point without leading any of nine metrics spanning affordability, opportunity, and quality of life. Lincoln, Cincinnati, and Lubbock rounded out the top five.

🏆 TOP STORY
OUT-OF-TOWN SEARCHES POINT AWAY FROM THE SUN BELT

Before anyone signs a lease in a new city, they spend weeks scrolling listings from an apartment two states away. Zillow tracks those page views, and the pattern they form is one of the earliest available reads on where renters are headed next.

Out-of-town interest is climbing fastest in Buffalo, where the share of rental page views coming from outside the metro rose 4.2 percentage points YoY. Chicago followed at 3.7 points, then Houston at 3.4, New Orleans at 3.2, and Dallas at 3.

Houston, Dallas, and New Orleans are names operators expect on a list like this. Buffalo and Chicago are the surprise, and rent explains part of it. A one-bedroom in Boston runs about $2,400 a month against roughly $1,400 in Buffalo, and Boston is Buffalo's largest outside source of searches.

• Long-Distance Searches Run Downhill on Rent: The four biggest flows between metros at least 100 miles apart and across state lines all move from a pricier market to a cheaper one. New York renters make up 6% of Hartford's page views, Los Angeles renters 5.5% of Las Vegas, Houston renters 5.2% of Oklahoma City, and Boston renters 5% of Buffalo.

• Established Destinations Are Cooling: Raleigh still pulls the highest out-of-town share in the country at 59%, with Hartford at 55.1% and Birmingham and Richmond both at 50%. All four lost ground YoY after absorbing years of relocation demand.

• Local Searchers Are Driving Other Markets: Cincinnati posted the largest gain in local search share at 8.1 percentage points, ahead of Jacksonville at 4.6 and Columbus at 3.2, where demand is coming from households already in the metro.

Rent data is already moving the same direction. Buffalo led all 50 of the largest U.S. metros in single-family rent growth during the first half of 2026 at 3.6%, and eight of the top 10 were Midwest or Northeast markets.

Most searching still happens next door. Washington, D.C. renters generate 23.9% of all page views on Baltimore listings, the largest flow in the data, followed by Los Angeles renters at 21.3% in Riverside and San Francisco renters at 17.6% in San Jose. New Yorkers are the exception, accounting for 4.8% of Miami views, 2.8% in Raleigh, and 2.4% in Tampa.

THE BOTTOM LINE

A search that never becomes a lease costs a renter nothing, which is why the signal runs early and noisy. What it captures right now is two Great Lakes metros with cheap rent and no recent reputation as relocation destinations catching the attention of renters priced out of bigger, costlier markets. Operators who wrote off the Rust Belt years ago are looking at the first evidence that the math has flipped.

🤝 TOGETHER WITH HEADWAY CAPITAL
318 UNITS. 36% BELOW SELLER’S BASIS. $24.8M BASIS ADVANTAGE.

Headway Capital Investments is launching Fuse at Park Row, a 318-unit value-add multifamily acquisition in West Houston’s Energy Corridor / Katy Freeway corridor.

The opportunity stems from the seller’s capital structure rather than a distressed asset. The current owner acquired the property in 2022 for approximately $185K per unit and is roughly $216K per unit all-in. With a recourse loan coming due, the seller has elected to exit around the loan balance.

Headway and its partners are acquiring the property for approximately $138K per unit, 36% below the seller’s all-in basis, creating an estimated $24.8M basis advantage across the 318 units.

The investment combines a reset acquisition basis with an established West Houston location, value-add rent upside and long-term fixed-rate Freddie Mac financing.

Projected investor returns include:

• 16.41%–18.59% IRR

• 2.00x–2.18x Equity Multiple

• ~7.1% Average Cash-on-Cash

• $50K Minimum Investment

View the opportunity, and join Headway Capital for their investment webinar on September 17 by clicking below.

🎓 BEST EVER LIVE EDUCATION
WHY INSTITUTIONS WANT BUILD-TO-RENT — AFTER SOMEONE ELSE BUILDS IT

Billions of dollars are chasing build-to-rent. But institutional buyers generally aren't looking to entitle land, manage construction, or lease up hundreds of homes.

They want the finished, stabilized community.

On September 17 at 1 pm ET, Red River Development co-founders Ryan and Steven Watts will break down what those buyers actually require and how that “spec sheet” shapes a BTR development deal from day one.

You’ll learn:

• What institutional buyers want in a finished BTR community

• How product type affects your exit from rents and density to the eventual buyer pool

• Where the development spread comes from and what can shrink or expand it

• Why operations matter at sale and how a proven operating history can affect value

Ryan and Steven bring experience from $690M+ developed across seven BTR communities, including taking their first project all the way through an institutional exit.

💰 CRE TRENDS
TERTIARY MARKETS ARE STEALING CRE DEALS

Tertiary markets crossed half of all CRE deal counts in 2023 and have held near that mark since. Their combined share across office, retail, multifamily, and industrial has climbed from 35% in 2010, while primary markets slid to roughly 34%.

The climb was slow before it was fast. Tertiary share moved to 38% by 2017, then crossed 50% over the six years that followed. Transaction counts went from about 7,700 in 2010 to more than 44,000 in the latest year measured.

That volume changed the underwriting question. Shallow buyer pools and thin comp sets were the standing argument against tertiary assets, and more than 44,000 annual transactions produce the comparable sales that argument assumed were missing. The premium narrowed as the liquidity arrived.

• Multifamily Gave Up the Most: Cap rate spreads over primary markets compressed from 210 bps in 2015 to 70 bps in 2025, even though multifamily's tertiary deal share sits furthest behind at 40%.

• Office and Retail Cut Spreads in Half: Office fell from roughly 125 bps to between 40 and 60 bps. Retail dropped from about 80 bps to 40 bps.

• Industrial Held Its Ground: The spread ran 140 bps in 2021 and 100 bps through Q2 2026, the widest premium left among the four types.

Single-tenant retail leads on share at 58%, ahead of multi-tenant retail at 52% and industrial at 51%. Concentration risk in smaller economies has not moved, and buyer pools are still shallower than gateway markets. The price of that exposure is what changed.

🔓 LP LESSONS UNFILTERED
COME FOR THE LESSONS. STAY FOR THE CONNECTIONS.

Most real estate events have you sitting in the audience. LP Lessons Unfiltered puts you in the conversation.

On September 23 at 12 PM ET, join a small group of accredited investors for a candid conversation with Paul Shannon, author of Both Sides of the Table and an LP in 40+ real estate investments.

Hear what Paul has learned from the deals that worked and the ones that didn’t. The mistakes he made. The red flags he learned to recognize. How he evaluates operators and downside risk today. And what he now looks for before putting his money into another deal.

Then, the mixer begins.

You’ll join intimate, small-group conversations with other accredited LPs and experienced Best Ever Inner Circle operators. Compare investing experiences, talk about what you’re looking for next, ask operators questions directly, and build relationships with people actively investing and operating in CRE.

Half investing lessons. Half relationship building. One hour designed to make you a better-connected, better-informed investor.

Live attendance is limited to 25 accredited passive investors.

🎙️ THE BEST EVER CRE SHOW
WHAT A BROKEN MARKET TAUGHT A NEW OPERATOR

The worst time to buy an apartment building turns out to be a decent time to learn how they get financed. In 2021 and 2022, nothing penciled. The numbers on deals stopped making sense, and anyone trying to break into multifamily spent months studying assets they had no way to justify buying.

On a recent episode of the Best Ever CRE Show, Mark D'Alessandro joined Matt Faircloth to explain why, during that stretch, he and his brother started writing loans instead of chasing acquisitions.

• One Loan While They Studied: A private lending opportunity surfaced while the brothers were still learning how to buy multifamily. They took it on the logic that capital sitting idle during a research phase might as well go to work.

• Then 42 More: What started as a single loan grew into roughly 42 loans and about $6.5 million originated through Two Brothers Capital, with another $2.5 million to $3 million raised from outside investors along the way.

• The Bank's View of the Same Deal: Lending put them on the other side of the underwriting, evaluating borrowers and collateral rather than business plans and upside. D'Alessandro carries that read into the multifamily deals he underwrites now.

The market did some of the teaching too. D'Alessandro describes the period as a better education than a strong one would have been, because watching deals fail to clear shows what stress looks like on paper. That view is available to any operator with capital and no acquisition that pencils, and it comes with the added benefit of learning how the lender on the other side of the next deal will read it.

👉 Listen to the full episode here.

👋 Hello, Best Ever readers!

In today’s newsletter, preleasing numbers lie, El Niño looms, landlords unite, sale-leasebacks surge, luxury falls behind, and much more.

🔓 Introducing LP Lessons Unfiltered: Get the lessons experienced investors learned the hard way, then mingle with fellow LPs and seasoned CRE operators in an intimate, relationship-focused setting. Join us September 23 at 12pm ET.

⏰ We’re live today at 1 PM ET. Learn how Property Llama evaluates private real estate lending opportunities — and what you should look for before putting your capital to work. Register free →

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🌊 El Niño: Forecasters have put the odds of a very strong El Niño above 90% this fall and winter, with heavy December through February rain expected across the Southeast, Southern California, and the Gulf Coast, where insurance premiums already run high.

⚖️ Landlords Unite: More than 2,600 landlords have joined a federal lawsuit over the 2020-21 eviction moratorium, up more than 75% since spring. Settlement talks point toward roughly $1 billion after plaintiffs originally sought $26 billion in restitution.

🏙️ Zoning Plea: Frisco officials have asked to be exempted from SB 840, which allows apartments in commercial and warehouse zones without rezoning in Texas cities above 150,000 residents. The city created a heavy industrial designation to sidestep it.

🚢 Tariff Impact: Cross-border tariffs could shift industrial demand as companies onshore production and hold more inventory, though exposure varies. Maryland and Texas import tariff-affected goods at twice the North American average, but trade accounts for under 2% of each state's economy.

🏛️ Publicly Private: HUD has loosened Section 18 rules to draw private financing toward a $170 billion public housing capital needs backlog, widening obsolescence criteria, covering agencies with 75 or fewer units instead of 50, and opening mixed-finance properties once LIHTC periods expire.

🏆 TOP STORY
INVESTORS ARE BETTING ON SCHOOLS, NOT COLLEGE

Hundreds of freshmen at Cal State Long Beach started the semester in a hotel this fall, shuttling to campus while crews finished a delayed 424-bed dorm. About 2,000 miles east, Wisconsin-Oshkosh is tearing down three residence halls it no longer has students to fill.

Both scenes come out of the same shift, and it's the one deciding where student housing money goes now. The number of new U.S. high school graduates peaked around 3.9 million in 2025 and is projected to fall 13% to roughly 3.4 million by 2041. The same data shows 38 states with fewer graduates in 2041 than in 2023, with the Midwest and Northeast under the most pressure and the South holding up better than the country overall.

Investors have already adjusted. JLL data shows the 68 Power Four universities accounting for 82% of student housing beds delivering in 2025 and 2026. Scion Group and Ares Real Estate have put more than $1.3 billion into two portfolios this year, including 12 properties and 7,578 beds for roughly $910 million in May. Their September purchase covered four properties at Georgia, Tennessee, and Texas State for about $435 million, all large public universities that have expanded enrollment in recent years.

Preleasing across the Yardi 200 reached 89.1% in July, up from 88.1% a year earlier, and the spread underneath it is where the story sits. Twenty markets are effectively full at 99% preleased. Thirty-five sit below 80%, and 25 of those have dropped at least 10 percentage points from last year.

• Supply Timing Beats Prestige: Walker & Dunlop's 2026 outlook puts Missouri, Penn State, Alabama, Auburn, Texas, and Oklahoma among the sector's stronger markets, with Texas A&M, Florida State, Central Florida, Arizona State, North Carolina State, and Michigan facing heavier pipelines. A university can keep adding students while the housing market around it goes temporarily overbuilt.

• Rent Growth Has Gone Regional: Northeast rents rose 3% YoY in July to $1,039 per bed, and Midwest rents rose 2.5% to $873. The West carries the highest rents at $1,094 but has managed 0.1% growth this leasing season.

• Growth Without Supply Draws Developers: Landmark Properties and Paceline Equity Partners are building a 656-bed complex near Kennesaw State, where record enrollment has met nearly five years without new purpose-built supply. It opens for the 2028-29 academic year.

Transaction volume reached $6.3 billion over the past year, up about 40% from the 2023 trough. National asking rents held near flat at $938 per bed in Q3 to date, with effective rents easing to $925 from $928. Walker & Dunlop's outlook points to slowing construction starts improving the supply picture over the medium term, and to owners increasingly turning to recapitalizations and structured liquidity rather than selling outright. For operators holding beds at a school with a thin pipeline, that combination buys time.

THE BOTTOM LINE

The demographic squeeze arrives slowly enough that operators can still pick their spots, and the two variables that matter most at any given school are enrollment trajectory and how many competing beds are already under construction nearby.

👀 LP LESSONS UNFILTERED
WHERE LP EXPERIENCE MEETS OPERATOR ACCESS

We’re launching a new kind of event for passive investors.

On September 23 at 12 PM ET, we’re bringing together a select group of accredited LPs and experienced CRE operators for an hour built around real investing lessons and real relationships.

First, Joe Fairless sits down with Paul Shannon, author of Both Sides of the Table and an LP in 40+ real estate deals, for a candid conversation about what actually happens after you invest: the wins, the losses, the red flags he missed, and what he does differently with his money today.

Then, the mixer begins.

You’ll break into small groups with other accredited LPs and experienced operators from the Best Ever Inner Circle, giving you the chance to ask questions, compare perspectives, learn what others are seeing in the market, and build relationships with people actively investing and operating in CRE.

No sitting through an hour-long presentation. Half lessons. Half connections.

Live attendance is limited to 25 accredited passive investors.

🎓 BEST EVER LIVE EDUCATION
LIVE TODAY: HOW TO EVALUATE PRIVATE REAL ESTATE LENDING

We’re going live today at 1 PM ET.

Property Llama co-founders Richard McGirr and Chris Lopez are joining us to break down how they evaluate private real estate lending opportunities, drawing from $40M+ in private lending partnerships and 100+ loans.

You’ll learn what to look for beyond LTV, how to assess the strength of a loan portfolio, why an operator’s track record matters, and what may actually be protecting your principal when you invest.

If private lending is already part of your strategy, or you’re considering it, there’s still time to join us.

Can’t make it live? Register anyway, and we’ll send you the replay.

💰 CRE BY THE NUMBERS
SALE-LEASEBACKS, LUX RETAIL, POP GROWTH, AND MORE

 

🏭 $4.6 billion

Sale-leaseback volume reached $4.6 billion in Q2, up roughly 27% QoQ and the strongest half-year start since 2022. Large portfolio sales drove the dollar figure, led by VICI's $1.1 billion purchase of a Golden Entertainment casino and hotel portfolio and W.P. Carey's $400 million pickup of a GardenCore portfolio.

Industrial Leads Count: Industrial accounted for 42% of the quarter's 178 transactions, the largest share by count, while retail slipped three percentage points QoQ to 39%.

🛍️ 46%

New luxury store openings in the U.S. fell 46% YoY in the first half of 2026, totaling 123,334 SF against 227,000 SF a year earlier. Brands are trading door count for flagship scale, with monobrand openings running below 2022 levels and average flagship size up more than 30%.

🏙️ 86

Population growth slowed or turned negative in 86 of the nation's 92 largest cities in 2024-25, with 56 growing more slowly, 24 flipping from growth to decline, and six posting deeper losses. Growth across the group fell from 1.13% to 0.31%, and cities losing population rose from eight to 32.

City-Suburb Split: Primary cities in 40 of the 56 major metros slowed more sharply than their suburbs, reversing the city-led growth pattern that held the year before.

🏠 6.66%

Mortgage rates on the 30-year average reached 6.66% in late August, against 6.56% a year earlier and 2.67% in December 2020. Buying a home now runs about 50% more expensive than renting one, and monthly payments on the median home have roughly doubled from pre-2020 levels.

🎙️ THE BEST EVER CRE SHOW
WHY LAND FLIPS HAVE GOTTEN SLOWER AND HARDER

The land flip used to be one of the fastest trades in real estate. Buy from a seller who doesn't know what they have, clear a lot or drop in a well, and exit at roughly double inside three or four months. That math stopped working in 2022.

On a recent episode of the Best Ever CRE Show, Chris Duff joined Ash and Amanda to explain what the rate environment did to land. Duff and his partners came in as the capital behind a Florida operator, spun up their own shop, then moved entirely into funding other people's deals.

• Exits Take Twice As Long: Duff still reverse-engineers deals for a sub-90-day hold, but since mid-2022 he plans for six months or more, often with multiple price cuts along the way. His response has been to build bigger discounts into the buy.

• Equity Beats Debt On Land: Debt lenders in the space are getting 8% to 15% and betting on the operator. Duff funds through equity instead, takes title, controls the listing agreement, and asks for 30% to 50% of the profit.

• Price Per Acre Falls Apart Below Three Acres: A two-acre parcel usually sells for close to what a one-acre parcel does, because a builder can only put one house on either. Infill is his most cautious category for a different reason: one use case, no way to subdivide, no outs if the buy price is wrong.

AI has pulled more competition into land than the asset class has ever seen, and Duff has spent two-plus years trying to automate underwriting for it. County-level pricing and a floodplain overlay don't tell an operator whether a parcel's comps hold up. That work still runs parcel by parcel, and it's the part that decides whether the deal clears.

👉 Listen to the full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, top markets have an occupancy problem, investors get scammed, apartment caps creep, NOI becomes priority, and much more.

This edition is presented by Headway Capital. A rare West Houston multifamily opportunity has just opened up. Fuse at Park Row, a 318-unit apartment community in Houston’s Energy Corridor, is being acquired at roughly 36% below the seller’s all-in basis — a difference of about $24.8M across the property. Learn more.

🎓 A low LTV doesn’t automatically mean a safe investment. On September 10, Property Llama is breaking down what investors should actually look for when evaluating private real estate lending opportunities. Save your seat.

Pitch Slam LIVE is where the four-minute pitch ends and the real questions begin. Watch it live.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🚨 Fund Fraud: The SEC has charged two California fund executives with running a Ponzi-like scheme that raised more than $80 million from more than 150 mostly retail investors. Two funds holding $121 million in outstanding investments now have under $17 million in recoverable assets.

📈 Cap Creep: Apartment cap rates rose 10 bps YoY to a 5.6% trailing 12-month average in July, according to MSCI. Sales fell 16% YoY to $12.4 billion, with single-asset trades down 25% to $9 billion.

📦 Storage Needs: Self-storage use has broadened, with 26% of surveyed Americans currently renting a unit and another 28% planning to. Searches across 150 major cities rose 23% YoY in 2025, nearly triple the prior year's growth.

🏗️ Permit Shift: Durham led all 100 largest metros in multifamily permitting intensity in H1 2026, authorizing 2,826 units, or 45.2 per 10,000 residents. Twelve of 16 Northeast metros permitted more units YoY while the South posted the weakest gains.

🏙️ Family Math: Child populations in Seattle and Washington, D.C., each grew 10% between 2015 and 2024, outpacing many Sun Belt metros. In both cities, the number of children in households earning under $100,000 fell while higher-income households rose sharply.

🏆 TOP STORY
TOP RENTER MARKETS HAVE AN OCCUPANCY PROBLEM

Reports of the South's demise may have been exaggerated. Southern cities took 37 of the 50 top spots on RentCafe's annual ranking of the best places to rent, with Florida, Texas, and North Carolina the most represented states. Holding No. 1 for the second year running is McKinney, Texas, a Dallas suburb of roughly 210,000 that ranks third in cost of living and housing and ninth in quality of life.

What elevates a city on this list is a specific mix. The ranking scores 150 cities across 20 metrics using Yardi Matrix data as of June 2026, and the winners share below-average living costs, fast-rising renter incomes, and a heavy share of new apartments.

That last ingredient is the one operators should read twice. New supply is what makes a city score well for renters, because it means more choice, more concessions, and more room to negotiate. It is also what sits on the other side of an operator's rent roll. Here is how that played out across the top five.

• McKinney wins on housing and amenities. Cost of living runs 2.9% below the national average, renter household incomes are up 35.9%, and the city pairs a high share of high-end rentals with highly rated schools and more than 3,000 acres of parkland.

• Huntsville jumped three spots to second. Alabama's aerospace hub posts a cost of living 9.2% below average and a 60.4% increase in renter income gains, with NASA's Marshall Space Flight Center and Blue Origin anchoring the job base. It ranks second in cost of living and housing and sixth in local economy.

• Texas and North Carolina round out the top five. Austin climbed one spot to third on a fourth-place local economy showing. Wilmington, North Carolina, moved up two spots to fourth with 49.4% renter income growth. Atlanta slipped two spots to fifth but still ranks second nationally in local economy.

The occupancy numbers tell the other half of the story. McKinney sits at 92.1% and Huntsville at 87.1%. San Marcos, Texas, which takes the top spot in cost of living and housing, runs 84.5% occupancy with new apartments making up 30.6% of its stock. Manhattan, which misses the top 50 entirely, sits at 98.2%. Renters are rewarding the markets where they hold the most leverage.

THE BOTTOM LINE

The gap between where renters want to be and where owners have pricing power is the whole story for anyone underwriting Sun Belt acquisitions right now. Abundant supply is what makes these cities attractive to renters and what has pushed Huntsville and San Marcos into the 80s on occupancy. Deliveries will taper. The operators holding McKinney, Huntsville, and San Marcos assets when they do are the ones positioned for the turn.

🤝 TOGETHER WITH HEADWAY CAPITAL
318 UNITS. 36% BELOW SELLER’S BASIS. $24.8M BASIS ADVANTAGE.

Headway Capital Investments is launching Fuse at Park Row, a 318-unit value-add multifamily acquisition in West Houston’s Energy Corridor / Katy Freeway corridor.

The opportunity stems from the seller’s capital structure rather than a distressed asset. The current owner acquired the property in 2022 for approximately $185K per unit and is roughly $216K per unit all-in. With a recourse loan coming due, the seller has elected to exit around the loan balance.

Headway and its partners are acquiring the property for approximately $138K per unit 36% below the seller’s all-in basis, creating an estimated $24.8M basis advantage across the 318 units.

The investment combines a reset acquisition basis with an established West Houston location, value-add rent upside and long-term fixed-rate Freddie Mac financing.

Projected investor returns include:

• 16.41%–18.59% IRR

• 2.00x–2.18x Equity Multiple

• ~7.1% Average Cash-on-Cash

• $50K Minimum Investment

View the opportunity, and join Headway Capital for their investment webinar on September 17 by clicking below.

🎓 BEST EVER LIVE EDUCATION
WOULD YOU KNOW A GOOD PRIVATE LENDING DEAL IF YOU SAW ONE?

A low LTV might look safe on paper. But it doesn’t tell you the whole story.

On September 10 at 1pm ET, Property Llama co-founders Richard McGirr and Chris Lopez are joining us live to break down how they evaluate private real estate lending opportunities and what investors should be looking at before putting their capital to work.

You’ll learn how to assess the strength of a loan portfolio, what matters beyond LTV, and why an operator’s actual track record can tell you more than projected returns.

Their approach is informed by $40M+ in private lending partnerships and 100+ loans, and they’re opening up the playbook.

💰 CRE TRENDS
HOW NOI REPLACED APPRECIATION AS A RETURN DRIVER

For the past few years, a lot of investors had the same plan: wait for owners in trouble to sell cheap, then buy the discount. It mostly never came. Lenders kept extending loans instead of forcing sales, as long as owners put in more cash, and the distressed inventory never hit the market in volume.

What that leaves is a market where value has to come from NOI growth rather than a favorable exit. For most of the last decade it worked the other way. Falling rates pushed cap rates down and lifted values whether or not a property performed, and appreciation carried the return.

The longer history says that was the exception. Across the full cycle, income accounted for 84% of total returns in the NCREIF ODCE index. Over the prior cycle it accounted for 43%. Principal Real Estate argues the market lost sight of how much income matters, and its Q1 2026 numbers show the correction already underway. U.S. unlevered total returns ran roughly 5% YoY, with capital returns contributing 0.2%. Income did nearly all of it.

Principal does not expect meaningful cap rate compression from here. For multifamily operators, that puts occupancy, retention, and expense control back at the center of the return.

🎤 BEST EVER PITCH SLAM
THE PITCH IS ONLY THE BEGINNING

Every Pitch Slam challenger gets four minutes to make the case for their deal.

Then time’s up. And the questions start.

Seven capital allocators get five minutes to dig into the opportunity. What assumptions do they challenge? Where do they see risk? What makes them lean in? What makes them walk away?

Then they make the call: Pursue or Pass.

At Pitch Slam LIVE, you get to hear the pitch and watch experienced capital evaluate it in real time. And once you’ve heard both sides, you get to cast your vote, too.

September 30 | 12 PM ET | Free to Attend

🎙️ THE BEST EVER CRE SHOW
MARINA PRICING IS BROKEN, AND THAT’S THE OPPORTUNITY

Two dry stack marinas sit about a mile apart in Charleston. Both run 100% occupancy with seven-year waitlists. One charges 50% more than the other, and neither owner seemed to know.

That kind of pricing gap is what happens in an asset class with no CoStar and no Bloomberg. On a recent episode of the Best Ever CRE Show, Ethan King joined Amanda and Ash to explain how he built a marina fund by driving to hundreds of properties across the Southeast and collecting the data by hand. He started the strategy at 21 from a college apartment. At 25, he owns 12 marinas, expects roughly 20 within nine months, and has raised about $125 million in equity commitments.

• The Supply Math Is Extreme: In the markets where King's fund invests, he counts 15 to 20 registered boats for every available slip. He puts housing at 5 to 10% undersupplied by comparison. Supply is also shrinking, because commercially zoned waterfront pencils better as a hotel or condo than as a 200-slip marina.

• Mark-To-Market Beats Cap Rate Arbitrage: King treats cap rate compression as a tertiary lever he does not lean on in underwriting. The primary value driver is rate, because disjointed slip pricing is consistent across the region. The second is adding incremental slips to an existing marina, where permitting is far lighter than building new.

• Third-Party Management Has Not Worked: Two marinas 100 yards apart can serve completely different boater bases, one running pontoons to a sandbar and the other running center consoles offshore. Every successful operator King names runs in-house. He and his partner lived at their first marina and took the complaints in person when rate increases went out.

Institutional capital has already noticed, with Blackstone-owned Safe Harbor and REIT operator Suntex consolidating at the top. King counts roughly 10,000 to 11,000 U.S. marinas against a largest owner holding about 130, which leaves most of the field with mom-and-pop sellers who price on what they need to retire rather than on a cap rate.

👉 Listen to Ethan’s full episode here.

👋 Hello, Best Ever readers!

In today’s newsletter, one number predicts your rent, OZ bills come due, distress spreads across sectors, the renter divide widens, HUD reshuffles public housing, and much more.

🎤 Seven judges. Millions in capital. And you get a vote. Meet the fund managers judging September’s Pitch Slam, then register to join us live on September 30 at 12 PM ET and help decide who becomes the next Champion. Watch Pitch Slam LIVE.

🔓 New opportunities are coming for LPs in the Best Ever community. If you want access to invitation-only events, new ways to connect with experienced CRE operators, and more, raise your hand →

🎓 How do you protect your capital when the market gets messy? On September 10, Property Llama is breaking down how they evaluate private real estate lending opportunities, including what they look at beyond LTV and projections. Register now.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

⏳ OZ Reckoning: Opportunity Zone investors face a December 31 recognition date on more than $75 billion in deferred gains, and Treasury could collect roughly $29 billion whether or not any property sells.

📈 Renter Divide: Higher-income renter households grew by 1.7 million from 2021 to 2024, driving nearly all net renter formation, while 80% to 90% of net apartment absorption has gone up-market for three years.

🚩 Distress Spreads: Industrial, hospitality, retail, and self-storage added $4.6 billion in troubled loan balances during August, pushing an overall distress rate that had already climbed to 10.78% by July.

🔑 Recovery Broadens: National apartment vacancy has fallen below 9% for the first time since 2024, while Class B lease trade-outs turned positive and concessions fell under 2.5% across one 144,000-unit managed portfolio.

🏛️ Housing Reset: HUD has loosened demolition and disposition rules for public housing authorities facing a $170 billion capital needs backlog, clearing a path to move properties onto the Section 8 platform and draw private capital.

🏆 TOP STORY
THE ONE NUMBER THAT PREDICTS WHERE RENTS WILL GO

Giving tenants two months free started as a temporary measure. It was going to come off at the next renewal cycle, then the one after that, and somewhere in the last two years it stopped being a concession and became the price. Every operator in a high-supply market has some version of this line item, penciled in as temporary long after it stopped being temporary.

One number tells you whether it's about to change: how fast your market is adding apartments. Compare annual inventory growth against rent performance across major markets and the line sits around 3%. Markets adding supply below that pace held onto rent growth. Markets above it gave rent back. RealPage reached the same conclusion in its 2025 year-end analysis, finding that markets building above 3% kept seeing rents fall.

The number works because it's knowable in advance. Permits and deliveries are public, so an operator can run the screen on any market before writing a single rent assumption.

• Below 2% Inventory Growth: Pricing power the current rent roll probably isn't capturing. Chicago added supply at well under 1% a year and was among the national leaders in rent growth. In thin-supply markets, the concession is likely costing more than occupancy requires.

• Right at the Line, Around 3%: Columbus and Richmond built at this level and still grew rents, which means the number alone won't call it. This is where demand has to be confirmed before underwriting a rent bump.

• Above 3% Inventory Growth: Expect flat to negative rents regardless of how a deal is marketed. Austin built above 6% a year and cut rents for nearly four years. The concession stays, and it stays longest on Class C, where Austin rents are still down 11.6% YoY.

The screen has one blind spot: it measures supply, not demand. Los Angeles added almost no inventory since 2023 and still finished the stretch at -0.2% on rents, a demand problem no supply number would flag. Richmond ran the reverse, building above 3% a year from 2020 to 2023 and growing rents straight through it, with Class A up 2.4% annually while the rest of the market lagged. Supply tells you the pressure a market is under. Demand tells you whether it holds anyway.

THE BOTTOM LINE

Annual inventory growth is knowable before any model gets built, and it sets the floor for what a market can do on rent. Below 2%, the pressure that justified the concession has likely eased. Above 3%, the data points to flat or negative rents no matter how the deal is marketed. Around 3%, the supply read hands off to a demand read, and Richmond is the proof that a market can carry more supply than the line predicts when the demand is there to absorb it.

👀 COMING SOON
NEW OPPORTUNITIES ARE COMING FOR LPS

We’re creating new ways for passive investors in the Best Ever community to connect with experienced CRE operators, including invitation-only events, opportunities at the Best Ever Conference, and more rolling out soon.

Some of these opportunities will be exclusively available to accredited investors, and we want to make sure we know who in our community should receive an invitation.

Raise your hand now so you don’t miss what’s coming.

🎤 BEST EVER PITCH SLAM
MEET SEPTEMBER’S PITCH SLAM JUDGES

The challengers are set. Now meet the seven capital allocators they’ll have to convince.

Pitch Slam LIVE returns September 30 at 12 PM ET, with seven active fund managers on the judging panel looking to place $10M+:

They’ll question each challenger, debate the deals, and ultimately decide which deals they want to Pursue. And which ones they don’t.

But they don’t have the only vote. You’re the eighth judge.

💰 CRE BY THE NUMBERS
MIDDLE-MARKET DOMINANCE, SENIOR HOUSING, AND MORE

📊 $5.1 Trillion

The middle market runs the vast majority of institutional CRE and barely registers with the funds that finance it. Roughly 5,800 mid-sized sponsors control $5.1 trillion in U.S. property, about 85% of the institutionally sponsored market, according to an Arctos analysis of CoStar and Preqin data.

Fund Gap: Some 69% of that real estate sits outside traditional closed-end funds, in joint ventures, syndications, and balance-sheet deals that institutional capital struggles to reach.

🏦 $20 Billion

A proposed cut to the largest banks' capital requirements would free up about $20 billion, or 2.4% under current rules, according to GlobeSt. Paired with a narrower definition of unsafe banking practices, the change could widen CRE lending capacity for borrowers facing refinancing and maturity pressure.

🏥 $1 Trillion

Maintaining 90% senior housing occupancy through 2050 will require more than $1 trillion in new investment, according to NIC Map. Senior housing posted a 10.6% total return in 2025, the best of any CRE asset class.

Starts Collapse: Construction starts have fallen 67% since 2021, from roughly 30,000 units a year to 10,000, even as 13 million more Americans are projected to choose senior housing within 15 years.

🏠 $2,000

The median U.S. asking rent rose 2.3% in July to nearly $2,000 a month, the fastest annual gain in over a year, according to Zillow. Single-family rentals drove most of the increase as would-be buyers stayed renters against 6.7% mortgage rates.

🎓 BEST EVER LIVE EDUCATION
PROTECT YOUR CAPITAL WHEN THE MARKET GETS MESSY

In private real estate, returns matter. But protecting your principal comes first.

On September 10 at 1PM ET, join Property Llama co-founders Richard McGirr and Chris Lopez for a live session on how they approach private real estate lending in a volatile market.

They’ll break down how to evaluate loan portfolios, look beyond LTV to understand what actually protects your capital, and analyze proven track records instead of relying solely on projections.

You’ll also see the framework Property Llama uses to evaluate lending opportunities informed by more than $40 million in private lending partnerships and 100+ loans.

Can’t make it live? Register anyway, and we’ll send you the replay.

🎙️ THE BEST EVER CRE SHOW
THE 24-MONTH BET INSIDE EVERY CAPITAL CALL

Every rescue capital call comes with a timeline, and the timeline is where most of them fall apart. Ash says he's never sat through a capital call webinar with an exit plan he found realistic, because the pitch always assumes the same three things break the right way at once: interest rates fall, cap rates compress, and rents rise, all inside a 24-month extension.

On a recent episode of the Best Ever CRE Show, Ash and Amanda worked through what separates a deal that survives a bad market from one that doesn't, and it came back to how long the clock runs.

• The Extension Is Shorter Than the Recovery: Amanda's point is that time fixes distressed real estate, because rents eventually rise if an owner can hold. A one-year extension, or even 24 months, isn't long enough, so sponsors sell or refinance back into the same conditions that broke the deal. The exit only works if the recovery arrives on schedule, and it rarely does.

• The Rescue Raise Resets the Stack: Ash described Scott Everett rolling underwater properties into one fund, then raising $70 million that sat ahead of existing investors in the repayment order. Original LPs were written down to 25 cents, then to 10, before the $400 million fund collapsed. The new money bought time at the cost of the original investors' position.

• No Maturity, No Clock: An all-cash buyer facing the same rents and expenses absorbs a 20% to 30% loss and rarely loses everything, because nothing forces a sale. Leverage adds a maturity date, and that date hands the timing decision to a lender. Amanda noted mobile home parks largely avoided the wipeouts, since bridge debt was never widely available there.

Amanda framed the failure as sponsors battling their own reluctance to admit defeat, telling themselves rates would drop right up until they didn't. What matters on any rescue pitch is what the plan requires and when. A plan that needs rates, cap rates, and rents all breaking the right way inside two years is a bet on timing, not a strategy for holding through it.

👉 Listen to the full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, AI does more than you think, renters go broke, manufacturing markets emerge, HUD gets blocked, senior housing slips, and much more.

💰 Need more capital for your deals? We’re building the Inner Circle to continually put operators in front of new investors and capital partners. And you have just 24 hours left to lock in current pricing. Book your intro call before September 1st.

🎤 September’s Pitch Slam lineup is here. 🏆 August Champion Chris Lenoir is back to defend his title against three new challengers bringing fresh CRE opportunities to the stage. Register for free to be the eighth judge on September 30.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏛️ Grant Block: A federal judge has blocked HUD from restructuring its fair housing grants, a plan that would have cut off more than 100 nonprofits and limited awards to five groups with budgets above $5 million.

👵 Silver Struggle: Senior housing occupancy has reached 90% while construction starts fell 67% between 2021 and 2025, leaving a shortfall of more than 1 million units by 2035 and a $1 trillion investment need through 2050.

🏙️ Coastal Comeback: New York multifamily permitting rose 47.9% to 35,888 units over the past year and Los Angeles nearly doubled, according to RealPage, while Dallas and Houston each shed roughly 1,850 units and Austin led all declines.

🧊 Cold Front: Cold storage vacancy has hit a record 7.7% after the sector posted its first negative absorption since 2007, and buildings completed in 2006 or earlier now account for 68% of all vacant space.

📉 NOI Hit: Median multifamily NOI growth slowed to 1.8% in 2025 from 3.4% a year earlier, as operating expenses rose 3.7% against revenue growth of 2.8% and utilities costs accelerated to 6.7%.

🏆 TOP STORY
HE BUILT A FULL AI BACK OFFICE. HERE’S HOW.

Most operators have been using AI for two years and have gotten little in return. The pattern repeats across CRE — a few enthusiasts who test and tinker with it constantly, a larger group who use it for tedious tasks, and everyone else treating it as a glorified search engine.

Neal Bawa operates at a level most operators assume is out of reach. His company writes its own production software and runs more than 100 trained tools that read incoming email, Slack, and meeting transcripts and then act on what they find.

On a recent episode of the Best Ever CRE Show, Bawa, who heads Grocapitus Investments and Multifamily University, joined Matt Faircloth to walk through how he built his system over two years and four phases, in an order he says mattered more than any tool in it.

• Phase One, Adoption: Nine months went to making ChatGPT second nature for every employee, driven by training, bonuses, and quarterly company goals tied entirely to usage. Two or three staffers were let go for refusing to come along. Nothing more advanced got built until the habit held.

• Phase Two, Reusable Tools: Departments carried monthly and quarterly quotas for building custom GPTs, each trained up front on CoStar reports, rent comps, and property data so it needs only one input to run. They built 400, searchable through an internal app. Thirteen weekly property management transcripts now produce an investor update that arrives 90% finished.

• Phase Three, Connected Workflows: Another nine months went to wiring those tools into Gmail, Slack, Asana, and Zoom so they handle the steps on either side of a task. Offering memorandums arriving in the deals inbox get screened against the buy box, and once an analyst approves one, underwriting and rent comps run on their own.

• Phase Four, In-House Software: Two non-programmers per department write 5,000 to 8,000 lines of code a week in Claude or Codex. The firm built its own underwriting tool with the six functions it actually uses, plus hundreds of proprietary rules on what it will and won't buy.

Bawa is candid about the cost. Beyond the firings and the 18 months of process work, he spent two or three months personally configuring GitHub, Codespaces, and an application server so employees couldn't break anything important. He holds a computer science degree. The software still makes mistakes, and humans approve, reject, or correct at every handoff.

That last part is where the path forks. Phase four takes a technologist, or at least someone willing to become one. Phases one and two take neither, and they're where most of the return sits — the investor update that arrives 90% finished came out of phase two, built by staff who write memos, not code. 

A firm with no engineer and no budget can run the same play: pick one recurring task that eats a person's week, train a tool on the inputs it already produces, and put the quota on a department the way Bawa put it on his. The software runs $50 to $100 in API charges per application, so the constraint is attention.

THE BOTTOM LINE

Phase one required no hire, no platform, and no capital, just nine months of making a habit stick before anything got built on top of it. Any firm can start that clock this quarter, and the ones that do will spend next year screening every deal that reaches the inbox rather than the handful they have staff for. The useful question heading into 2027 planning is which department gets the quota first.

👉 Listen to the full episode here.

🌟 BEST EVER INNER CIRCLE
24 HOURS LEFT: LOCK IN PRICING FOR LIFE

Finding a great deal is only half the battle. You still need the capital to close it.

That’s why we’re building the Inner Circle to continually put operators in front of new sources of capital.

• Pitch your deal directly to fund managers through Pitch Slam.

• Build relationships with LPs and capital partners through new investor communities.

• Tap into Best Ever’s 55,000+ person CRE audience.

• And soon, meet 25+ LPs and fund managers every month through our new Capital Mixer.

And capital raising is just one part of the Inner Circle system. You’ll also get resources to source distressed opportunities, solve legal and securities questions, scale operations, pressure-test decisions, and work through challenges with experienced operators.

Inner Circle pricing increases September 1. You have 24 hours left to book an intro call with AJ to see if it’s the right fit for your business and lock in today’s pricing for life.

🎤 BEST EVER PITCH SLAM
SEPTEMBER PITCH SLAM LINEUP

Pitch Slam LIVE returns September 30 at 12 PM ET, and our first champion is coming back to defend his title.

Chris Lenoir of Haverkamp Group took the August crown. Now, three new challengers are stepping onto the stage to try to take it from him.

🏆 Chris Lenoir | Haverkamp Group — Defending Champion
55+ Active Adult Housing | Omaha | $14.1M Raise

🥊 Donato Callahan | Timberview Capital
NNN Industrial | Michigan & Minnesota | $2M Raise

🥊 Seth Weis | Reign Funding
Private CRE Debt Fund

🥊 Sid Shamim | Headway Capital Investments
318-Unit Multifamily | Houston | $6.5M Raise

Each challenger gets 4 minutes to pitch, followed by 5 minutes of questions from seven active capital allocators. The judges vote. The audience votes. And one operator leaves with the title.

Think Your Deal Belongs on This Stage?

We are still accepting applications for September’s event as well

Inner Circle members can pitch at no additional cost and receive priority consideration. Not a member? You can apply to present at Pitch Slam for a one-time $4,000 fee. If you join the Inner Circle within 7 days after presenting, 100% of that fee will be applied toward your membership. Apply to pitch.

💰 CRE TRENDS
A THIRD OF RENTERS CAN’T COVER OPERATING COSTS

Roughly 30% of U.S. renters earn under $30,000 a year, and more than 1.1 million renter households report zero income. Rental housing economist Jay Parsons ran the affordability math on that group this week. A household at $30,000 can afford about $600 a month in rent and utilities, and operating expenses alone clear that number on most rentals, with older stock often costing more to maintain than newer product.

For operators, the line sits between two different businesses. Above $30,000 in household income, pricing levers work as expected — concessions move traffic, renewal caps hold occupancy, and a rent increase gets absorbed or it doesn't. Below it, none of that reaches the constraint. The gap between physical and economic occupancy widens, and the shortfall lands in collections rather than on the rent roll.

That has underwriting consequences. Wages and subsidy availability drive affordability at the bottom of the distribution, and neither one responds to anything an operator does with pricing.

🗺️ ON THE MAP
WHERE THE MANUFACTURING BUILDOUT ACTUALLY LANDS

U.S. manufacturing construction spending could reach roughly $1 trillion between 2026 and 2030, and almost none of it will show up in rent growth where operators expect it. Hines Research scored 1,455 industrial submarkets across 75 metros on existing manufacturing stock, five-year employment growth, and workforce size, then tested those scores against what rents and occupied space actually did afterward. 

Only 167 submarkets cleared a score of 70, spread across 54 metros, and six of them hold the largest clusters.

• Dallas–Fort Worth: Eighteen top-scoring submarkets, more than double any other metro, built on logistics and defense-related activity spread across a wide geography rather than one campus.

• Houston: Nine submarkets anchored in energy and petrochemical manufacturing, a base that predates the current buildout and comes with trained workers already in place.

• Phoenix: Nine submarkets tied to semiconductor investment, where fabrication plants pull component logistics, testing facilities, and suppliers in behind them.

• Atlanta: Nine submarkets carrying both data center and battery exposure, the only metro in the top tier where those two drivers overlap at scale.

• Chicago: Seven submarkets, and the clearest case that existing industrial depth outweighs growth rate in this analysis.

• San Jose: Seven submarkets on semiconductors, with land constraints that have historically kept rent growth firm.

Rent growth separated the tiers by 170 bps, from 4.7% annually in the lowest-scoring bucket to 6.4% in the highest. Demand growth is where the gap opened wide, with the bottom bucket shedding occupied space at -0.2% annually while the top added 2.7%.

For multifamily operators, the useful read is payroll rather than pallets. These 167 submarkets mark where advanced manufacturing has translated into sustained hiring instead of a groundbreaking photo, and the metros holding several of them are absorbing workers across a wide enough footprint to move rooftop demand.

👋 Hello, Best Ever readers!

In today’s newsletter, utility billbacks are under attack, Zillow settles, tariff wars continue, marinas heat up, construction rebounds, and much more.

🎤 We have our first Pitch Slam Champion. Chris Lenoir took the August title, and next month, he’ll be back to defend it against an entirely new lineup of challengers. Register for free to see if he can make it two in a row.

🌟 More benefits. More ways to grow. And soon, a higher price. Inner Circle pricing increases September 1, but book your intro call by August 31 and you can still lock in today’s rate. Book your intro call.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

⚖️ Zillow Settles: The FTC settled with Zillow and Redfin, reversing a $100 million deal that kept Redfin out of internet listing services for up to nine years. Redfin will reenter, which the agency expects to lower costs for property managers.

🪵 Trade Wars: Tariffs of 50% have taken effect on roughly $20 billion of Canadian goods, covering plywood, engineered wood, and Portland cement. Softwood lumber is excluded, since it already falls under separate Section 232 duties. Canada's response is set for September 8.

📉 Concessions Ease: Discounts have eased for a second straight month, with 15.8% of stabilized units offering one in July, down 70 bps, according to RealPage. The average concession still equals nearly six weeks of free rent.

⛵ Sea Legs: Institutional capital has moved into marinas, with Blackstone-owned Safe Harbor acquiring MarineMax for $1.5 billion. Roughly 90% of the 11,000 U.S. marinas remain in the hands of single-property owners.

🛍️ Store Fatigue: Shoppers are walking out early, with 72% saying they have left a store because the environment felt overwhelming and 53% of Gen Z and Millennial respondents preferring to browse without algorithmic prompts.

🏆 TOP STORY
WHY UTILITY BILLBACKS ARE UNDER ATTACK

Utility recovery has become one of the easiest ways to lift NOI without touching rent. Bill water, sewer, and trash back to residents through a ratio formula, add an administrative charge on top, and a single unit can carry $200 to $300 a month in charges that never appear on the rent roll. Most of that is real cost recovery. The administrative fee is the part that clears margin, and legislators have started taking it away.

Colorado answered the question first. A 2025 price transparency law left operators there unsure whether ratio utility billing was permitted at all, and House Bill 26-1013 resolved it in March. The bill took effect the day it was signed, and the clarification came with four conditions that other states appear to be moving toward.

• No Markup on the Bill: The total charged across all residents cannot exceed what the utility charges for the property, and no administrative fee, surcharge, or markup can be added on top of actual utility costs unless separately authorized elsewhere in law.

• Common Areas Come Out: Hallway lighting, irrigation, and shared facility usage have to be carved out of what residents pay. The allocation method also has to appear in the lease or an addendum, so a formula that lives only with the third-party biller no longer clears the bar.

• New Construction Loses the Option: Colorado properties applying for permits on or after July 1, 2027 must meter gas, electric, and water directly or through submeters. Existing properties keep RUBS, so the requirement lands on the development pipeline rather than on stabilized assets.

Enforcement has been running ahead of the legislation. Greystar agreed in December to pay $24 million — $23 million to the FTC and $1 million to Colorado — over advertised rents that left out mandatory fees, utility administration among them. In California, Mission Rock Residential paid $495,000 last October after moving roughly 140 North Bay households onto RUBS while raising rents close to the state's Tenant Protection Act cap. Utility charges there ran as high as $200 a month, and the combination pushed total housing costs past what the cap allowed. At least 13 lawsuits have challenged RUBS across five states since the start of 2025, and eight California cities now prohibit the practice in most arrangements.

Two line items carry most of the exposure. The administrative or service fee is the piece that functions as margin on a pass-through, and Colorado's statute restricted it. Common-area allocation is the second, showing up in both the Colorado conditions and the California complaint. 

The practical audit is whether the third-party biller's current formula pulls hallway lighting, irrigation, and leasing office usage into what residents pay, and whether the allocation method appears in the lease rather than only in the biller's system. In rent-capped jurisdictions, timing matters as much as the formula, since converting an existing resident to RUBS can count as a rent increase and stack against the cap.

THE BOTTOM LINE

The FTC's rulemaking on total rent disclosure drew comments through April, and the agency has not said whether it will propose a rule, which leaves the national standard unsettled. Any underwriting that assumes utility administrative fees survive the next 24 months is taking a position on a regulation nobody has read yet.

🎤 BEST EVER PITCH SLAM
AND THE BEST EVER DEAL IS…

The votes are in. Chris Lenoir of Haverkamp Group is the August Pitch Slam LIVE Champion!

Chris took the stage to pitch Attivo Trail Omaha, a Class A, 55+ active adult community in Omaha, and after four pitches, live Q&A, Pursue or Pass votes, and final deliberation, he came out on top.

But winning means Chris isn't done yet.

Next month, he'll return to defend his title against an entirely new lineup of challengers bringing new CRE opportunities to the stage. They'll face a new panel of fund managers and capital allocators looking to place $10M+. And once again, you'll be the 8th judge.

Can Chris make it two in a row? Or will September crown a new champion?

📅 September 30 | 12 PM ET

💰 CRE BY THE NUMBERS
ON-TIME RENTS, CONSTRUCTION STARTS, AND MORE

📊 83.2%

On-time rent payments at independently owned rentals rose to 83.2% in August on a three-month moving average, up 40 bps from a revised July figure and 85 bps YoY, the strongest annual gain since May 2023. Multifamily drove most of the improvement, climbing to 82.5%, though it remains the weakest segment behind single-family and 2–4 family rentals.

Late Payments: The most recent reading held at 12.1% in June, down from a post-pandemic high of 13.5% in January and February.

🧱 114 bps

More than 2,600 conduit and SBLL CMBS loans totaling above $100 billion mature over the next nine months, and replacing that debt costs roughly 114 bps more than it carries today. Maturing loans average a 5.44% note rate against 6.58% on recent originations, a gap that applies whether or not a loan is flagged as distressed.

🏗️ 25.6%

Construction starts rebounded 25.6% MoM in July to a seasonally adjusted annual rate of $1.79 trillion, reversing a 19.9% drop in June. Multifamily starts rose 5.7% for the month, while residential construction remains down 1.7% YTD.

Megaproject Skew: Data center starts jumped 107.9% MoM and manufacturing 277.8%, while healthcare fell 59.7%.

💵 $40 trillion

Gross U.S. debt topped $40 trillion for the first time, with publicly held debt at $32.266 trillion, or close to 100% of annual GDP. Treasury yields set the floor under commercial borrowing costs, and the Congressional Budget Office projects the debt ratio reaches 120% within 10 years under current law.

🌟 BEST EVER INNER CIRCLE
5 DAYS TO LOCK IN CURRENT PRICING FOR LIFE.

The Best Ever Inner Circle has changed a lot in the last 30 days.

We’ve added a Distressed Deal Pipeline to help members uncover opportunities earlier, LinkedIn Investor Lead Generation to help turn authority into investor conversations, and Pitch Slam, where members get priority consideration to pitch their deals to active fund managers looking to place $10M+.

And we’re still adding more.

That’s why Inner Circle pricing is increasing September 1.

Want to lock in the current rate? Book your 15-minute intro call by August 31. We’ll honor today’s pricing even if you decide to join after the deadline.

Your rate is locked in for as long as you remain a member, membership includes up to three people from your company, and there’s a 30-day money-back guarantee.

✍️ BEST EVER BLOG
THE REAL SECRET TO FINDING BETTER DEALS

After a decade in acquisitions, Patrick Carino has learned that the best deals rarely come from better technology. They come from being the person brokers, owners, and industry relationships think of first.

Patrick breaks down how he sources deals, stays top of mind, and why relationships still beat automation, including the lessons behind 425 opportunities reviewed to land five sites totaling 1,613 units.

🎙️ THE BEST EVER CRE SHOW
THE $80 LEAD AND THE $550 LEAD

Two operators can chase the same off-market seller in the same ZIP code and pay wildly different prices for the privilege. In Phoenix, one was paying $550 per lead. The other was paying $80.

On a recent episode of the Best Ever CRE Show, Kasim Aslam joined Richard McGirr to break down the seven years he and his partner spent generating motivated-seller leads at a fraction of what everyone else paid, and the testing discipline that got them there.

• The Vocabulary Test: Lead quality varied sharply depending on whether a seller searched "house" or "home." One word describes four walls and a roof, the other describes attachment. That was one of roughly 150 distinctions the partnership split-tested, though Google has since narrowed the keyword-level control that made the tactic work.

• The Five-Minute Rule: Clients who didn't work a lead within five minutes were dropped. Slow follow-up polluted the conversion data the campaigns optimized against, which meant one sloppy buyer degraded performance in every other market running through the same account.

• The Pooled Account: Competing agencies kept each client in a separate account. Kasim routed every geography through one, concentrating spend and conversion history where it lifted the Google quality scores that set his cost per click.

Pricing came last. They sold each metro cheap for a lean first year, then used one Atlanta client's documented $1 in, $6 out return to auction exclusivity to the highest bidder. A few investors bought their own city outright just to shut the campaigns down, having watched Kasim skim the bottom of funnels they were filling with radio and television spend.

👉 Listen to the full episode here.

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, trophy space is gone, completions stall, manufactured housing booms, small cap wins, and much more.

Today’s edition is presented by M1 Real Capital. Built through $3B+ in transactions and trusted by 1,000+ operators, fund managers and capital allocators. M1 Real Capital installs the systems used to create predictable private capital. Book a Capital Constraints Call to diagnose exactly where your raise breaks and what needs to be fixed.

🎤 Only 3 days until Pitch Slam LIVE. Four CRE operators will put their deals in the hot seat in front of seven capital allocators looking to place $10M. And you get a vote, too. Wednesday, August 26 at 12 PM ET. Reserve your free seat.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏗️ Supply Squeeze: Multifamily completions dropped to a seasonally adjusted 329,000 in July, down 25.6% YoY, meaning far fewer new apartments are hitting lease-up. Permits ran the other direction at 490,000, up 6.3% YoY, so the pipeline is refilling even as deliveries thin out.

📉 Regional Split: Multifamily cap rates have risen 81 bps nationally since 2022, but cash flow decided who absorbed it. New England apartment prices climbed 23.5% to roughly $186,900 per unit, while Mountain division values fell 10.3% to about $170,900.

🏢 Doors Reopening: National office vacancy fell to 17.7% in July, down 130 bps YoY and its lowest reading in over a year, with 19 of the top 25 markets improving. Dallas dropped below 20% for the first time since 2023, while San Francisco sits at 26%.

🛍️ Landlord Leverage: Retail absorbed 10.2M SF in Q2 after giving back 4.5M SF to start the year, and there is almost nothing coming to meet it. Just 56.1M SF is under construction against 11.8 billion SF of existing inventory, holding vacancy at 4.4%.

🏘️ Factory Made: Manufactured housing has started appearing in suburban subdivisions after the 21st Century ROAD to Housing Act dropped a decades-old rule requiring a permanent chassis. VA and ID now allow factory-built homes on nearly any residential lot, with the average unit running $90,700.

🏆 TOP STORY
TROPHY SPACE IS GONE, AND THE PIPELINE IS FULL

No office market got written off harder than Washington, D.C. Values have fallen sharply since the pandemic, with some buildings trading at a quarter of what they previously fetched, and 22% of the market still sits vacant. What that collapse created was a basis low enough to make renovation pencil.

Garfield Investments bought 300 M St. SE, a 285K SF Navy Yard building, for $28 million, put $3 million into common area renovations, and has leased 76K SF since. Last month the firm paid $26.2 million for 1667 K St., less than half the building's prior sale price, with $10 million in renovations set to begin this fall. More than $210 million has gone into 10 renovation projects across the commercial core since 2022, according to CBRE.

• The Basis Math: One buyer describes acquiring at 15% to 20% of replacement cost. Another targets properties running 50% to 60% leased at roughly $150 PSF, then commits a further $100 PSF to renovation to push occupancy toward 80% to 90%.

• The Trophy Squeeze: D.C.'s trophy market is the second tightest in the country behind Manhattan. Of 14M SF of top-tier product, just 9.3% is vacant, and only eight blocks larger than 50K SF are available — none of them including a building's top floor. The two announced ground-up projects from BXP are already 75% and 87% preleased.

• The Rent Ceiling: Triple-net rents at 1701 Pennsylvania hit $105 PSF on a deal with White & Case for nearly the entire building, a new high for the city. Grosvenor is replacing the exterior windows, adding a rooftop penthouse, and upgrading the lobby, common areas, and fitness center to get there.

The renovation work itself has converged on a short list of moves. Rooftop terraces and penthouse amenity floors, new lobbies, conference centers, fitness space, and ground-floor restaurants show up on nearly every project, from Drawbridge Realty's $10 million lighter-touch upgrade at 1331 L St. NW to the $40 million FarmViewVentures is spending at 1625 Eye St. NW, where O'Melveny & Myers renewed for 100K SF last quarter. Garfield's CEO is in due diligence on another D.C. building and underwriting several more.

THE BOTTOM LINE

Flight to quality has stopped meaning flight to new construction. With the trophy tier at 9.3% vacancy and the pipeline preleased before it breaks ground, a well-located building bought at a fraction of replacement cost can be renovated into competitive product. The underwriting is familiar to any value-add operator — a fixed per-SF capex spend against a defined occupancy target — and D.C. is where it is being tested on assets nobody wanted.

🤝 TOGETHER WITH M1 REAL CAPITAL
WHAT HAPPENS AFTER THE WIRE CLEARS?

Most conversations about capital raising stop at the close.

But the close isn't completion. It's the start of a phase almost no operator builds a system for.

Here's the part that surprises people: an investor who just wired capital is watching more closely, not less. Every delay, every vague update, every quiet stretch becomes data about how you'll behave when something actually goes wrong.

Three things quietly decide whether your next raise is easier or harder than this one:

• how fast you communicate after the close

• how clearly you report outcomes

• how present you are when there's nothing to sell

Skip those, and your best investors don't leave loudly. They just get quieter, slower, and harder to reach next time you raise.

THE M1 ADVANTAGE

$1M – $100M+ Target Raises: Designed for single acquisitions, portfolios, and fund platforms

506(c) & Institutional-Grade Positioning: Compliant. Professional. Built to hold up under sophisticated diligence.

9-Figure Capital Raising Track Record: Across multiple funds, structures, and market cycles

WHAT GETS INSTALLED

Post-Close Investor Systems: Structured touchpoints that keep investors engaged after they've already said yes

Predictable Investor Flow: Systems that attract accredited investors before a deal is announced

High-Intent Capital Conversations: No chasing. No convincing. Qualified allocation discussions.

Repeatable Raise Infrastructure: So re-commitment feels automatic, not like starting over

This is for operators raising $1M–$100M+, fund managers building a scalable platform, or teams tired of re-earning investor trust from scratch every raise.

This is NOT for first-time investors without a defined strategy, deal-by-deal hustlers, or anyone looking for scripts, hacks, or shortcuts

It's a working session to:

• identify where your investor acquisition process breaks down

• diagnose the constraint limiting your raise

• map how to fix it before your next deal goes live

The raise doesn't end at the close. Build what happens next.

🎤 BEST EVER PITCH SLAM
3 DAYS UNTIL PITCH SLAM LIVE

Four challengers. Seven judges. One champion. And you get a vote.

This Wednesday, real CRE operators will pitch real investment opportunities live to a panel of fund managers and capital allocators looking to place $10M+ in capital.

Each challenger gets 4 minutes to make their case, followed by 5 minutes of live Q&A. Then the judges vote Pursue or Pass before ultimately crowning one Pitch Slam Champion.

But the judges aren't the only ones deciding. You’re the 8th judge. You'll evaluate every opportunity and cast your Pursue or Pass vote alongside the panel.

Pitch Slam LIVE
📅 Wednesday, August 26
⏰ 12 PM ET
🎟️ Free to attend

Three days left. Save your seat and join us live.

💰 CRE TRENDS
THE SMALL-CAP MIX BARELY MOVED IN THREE YEARS

Multifamily sits at 26% of deals between $5 million and $25 million, industrial 25%, retail 23%, office 16%, niche 8%, hotel 3%. Volume across the band rose 9.3% YoY to $57.1 billion in H1 2026.

• Multifamily and Industrial Sit Within a Point: Across three consecutive first halves the two largest sectors have run 25% and 25%, then 27% and 24%, then 26% and 25%.

• Office Moved Two Points in Three Years: Share went 15%, 17%, 16% over the window while volume rose 6.2% YoY.

• Niche Fell From 10% to 8%: Self-storage and data centers, counted together, dropped two points in 1H-25 and held there in 1H-26.

A 9.3% volume increase that leaves every sector within a couple of points of where it started means the additional capital spread across the band rather than landing in one place. Buyers are underwriting against current rents with the 10-year Treasury near 4.7%, and institutional capital that once ignored anything below $100 million is now working down toward $10 million.

🎙️ THE BEST EVER CRE SHOW
THE STORAGE FEATURES THAT CUT YOUR TAX BILL

Two storage facilities can trade at the same price and hand their owners tax bills that differ by hundreds of thousands of dollars. The difference comes down to what's sitting outside the buildings, and what's bolted between the units inside them.

On a recent episode of the Best Ever CRE Show, Sean Graham, owner of Maven Cost Segregation, joined colleague Chris Pierce to break down where the deductions in a storage facility actually come from, and why one property gives up so much more than the next.

• Complexity Drives the Percentage: Class A climate-controlled facilities can push toward 40% of basis into five- and 15-year asset classes. A bare-bones drive-up property sitting on concrete pads with a gravel drive gets stuck in the 20s. The more there is to work with, the more comes out.

• Climate Control Unlocks the Interior: Roll-up doors on the outside of a building hold it together, so they stay at 39 years. Walk down a conditioned hallway inside and those same doors can often move to five-year life. Partition walls between units come out with a wrench, which pulls them out of real property too.

• Site Improvements Carry the 15-Year Bucket: Paving, fencing, gates, pole lighting, landscaping, and signage all sit at 15-year life and qualify for bonus depreciation. A facility with a gravel driveway and no fence around it doesn't have much to hand over.

Graham's warning is not to let the tax treatment talk you into a deal. Storage demand is hyper-local and runs on housing turnover — when rates slow home sales down, people stop moving and occupancy softens. He's also wary of templated work. The IRS wants the engineering done on each individual property, which means the last facility's numbers don't carry over to the next one.

👉 Listen to the full episode here.

👋 Hello, Best Ever readers!

In today’s newsletter, the demand map sharpens, tariffs pause, retailers go big, confidence shakes, and much more.

Today’s edition is presented by AI for CRE Collective. AI is moving fast across commercial real estate. The hard part is knowing where to start and which tools are worth your time. The AI for CRE Collective brings together 800+ brokers, investors, developers, owners, lenders, asset managers, and property managers using AI to underwrite deals, build BOVs and OMs, research markets, analyze sites, abstract leases, and automate repetitive work. Learn more.

🎤 Seven judges. $10M+ in capital looking for a home. And you get a vote, too. Meet the capital allocators taking the judges’ seats at Pitch Slam LIVE on August 26, and save your free seat to join them as the 8th judge. Reserve your free seat.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🇨🇦 Tariff Reprieve: President Trump has paused 50% Section 338 tariffs on Canada through Friday after announcing a deal Canada described as unfinished. The duties would have hit roughly $20 billion in imports, including building materials that feed U.S. construction pipelines.

🔥 Wildfire Fallout: Wildfire smoke has pushed indoor air management up the priority list for office landlords, with 21 of the 25 hardest-hit metros recording unhealthy pollution for six straight days in July. Durst now tracks seven air metrics across 16M SF.

🏠 Rent Burden: Families with children are getting hit hardest, with 54% now cost-burdened as median annual rent reaches $21,480. Nearly half of all U.S. renters spend more than 30% of income on housing, a share that has held near 50% for years.

🏪 Bigger Boxes: Retailers have posted a net loss of 144 stores through July while adding 26.1M SF, as incoming locations averaged nearly 80% more space than closures. The store-count gap narrowed sharply from 1,778 net closures a year earlier.

💵 Tighter Terms: Small multifamily originations reached an annualized $71.6 billion through the first half, topping 2025's full-year total by 2.8%. Debt yields climbed to 9.6% while LTVs slipped to 63.4%, leaving less leverage against property income.

🏆 TOP STORY
WHERE DEMAND IS BUILDING, AND WHERE IT ISN'T

A metro of 200,000 in southwestern Utah now ranks first in the country for future CRE demand — ahead of Austin, ahead of Miami, ahead of every market that dominated investor conversation for the last four years. That finding comes from the National Association of Realtors' Commercial Real Estate Demand Index, a new quarterly measure launched this week that tracks 306 metros using employment and migration data to flag demand before it surfaces in rents, vacancy, or leasing.

The index scores every market against a national average of 100, with each 15 points representing one standard deviation. What it exposes is a full reversal of the geography operators built portfolios around.

• Austin peaked at 135.7 in Q3 2022 and now sits at 115.6, a 20.1-point slide that tracks the market's supply glut and cooling in-migration. Professional and business services employment there has grown just 1.9% YoY.

• Naples has been cut down harder than any boom market on the list. The metro scored 127.8 in Q3 2022. It now sits at 94.5, below the national average and ranked 226th. Manufacturing employment there has contracted 4.1% YoY while retail trade employment is down 2.6%.

• Miami has crossed from strength into weakness. After peaking at 116 in Q4 2023, the metro has dropped to 96, ranking 198th, with negative readings across transportation, manufacturing, leisure and hospitality, and retail trade. Both net migration and population growth turned negative in 2025.

Raleigh is the exception. At 121, it ranks highest among the 50 largest metros and is the only major market stronger today than it was during the 2022 migration peak. Above it sit metros most institutional screens never surface.

• The Carolinas Lead Nationally: South Carolina ranks as the strongest state in the index, with demand momentum concentrated in secondary markets rather than the metros that drew capital in 2021 and 2022.

• Small Metros Are Outrunning Big Ones: St. George scores 128 on the back of 15.5% growth in professional and business services employment, 2.5% population growth, and 2.2% net migration. Fayetteville, AR, and Huntsville, AL, show similar broad-based strength, with Huntsville posting one of the highest multifamily scores in the country.

• Sector Divergence Is Widening: Salem, OR, and Fairbanks, AK, top the industrial rankings — markets that appear in almost no institutional screening model. The index breaks out office, industrial, retail, and multifamily separately, with industrial and multifamily carrying the most weight.

The index measures inputs, not outcomes. A score below 100 doesn't mean a market is shrinking — Naples is still adding residents, just slower than the average metro. What the scores capture is the trajectory, not the level, which is the part underwriting tends to get wrong.

THE BOTTOM LINE

Deals underwritten in 2021 and 2022 assumed the demand drivers in Austin, Miami, and Naples would hold. Those assumptions are now measurably wrong, and the gap shows up first in lease-up velocity and renewal pricing rather than in headline occupancy. Operators sitting on Sun Belt exposure have a cleaner way to test whether their rent growth assumptions still have economic support behind them, and operators hunting acquisitions have a screening tool that points somewhere other than where everyone else is looking.

🤝 TOGETHER WITH AI FOR CRE COLLECTIVE
GET YOUR FIRST AI WIN IN CRE

Join 800+ CRE professionals using AI to underwrite deals, build BOVs and OMs, research markets, screen sites, abstract leases, review operating reports, and automate repetitive work with AI for CRE Collective.

Inside, you get:
✓ AI for CRE Certification and role tracks for every CRE seat
✓ 500+ hand-tested tools with member-only discounts
✓ 300+ workflows, 500+ prompts, and CRE AI skills
✓ Live workshops, monthly member huddles, and weekly office hours
✓ Advanced masterclasses, including the $599 Claude for CRE course
✓ A community sharing what works on active deals and assets

Start free for 7 days and get full access. Bring one task that is eating your time, find the workflow built for it, and use the community or office hours when you get stuck.

Underwrite a live deal, draft the BOV, abstract the lease, research the market, or automate the report before the trial ends.

Finish the Certification in your first 30 days. If you don't get your first win, we refund your entire first month. Cancel anytime.

🎤 BEST EVER PITCH SLAM
MEET THE JUDGES OF PITCH SLAM LIVE

The challengers are bringing the deals. These are the people they have to convince.

On August 26 at 12 PM ET, seven fund managers and capital allocators will take the judges' seats at Pitch Slam LIVE. Together, they're actively looking to place $10M+ in capital and bring experience spanning billions of dollars in CRE acquisitions, investments, lending, and capital formation.

They'll put each opportunity to the test during live Q&A, cast their Pursue or Pass votes, and ultimately help crown the August Pitch Slam Champion.

👤 Nishant Sondhi | Sondhi Capital Group
17 investments representing ~$600M in aggregate asset value

👤 Manish Poddar | Wealthify Capital
$200M+ in multifamily transactions as GP and co-GP

👤 Bronson Hill | Bronson Equity
$60M+ raised across real estate and private equity

👤 Chris Larsen | Next Level Income
$120M+ deployed • $2B+ in CRE acquisitions

👤 Yakhin Israel | Twin Pillar Capital
25 years in CRE • $2B+ in opportunities

👤 Peter Mathews | CGM Alternatives
Institutional CRE valuation background • 200+ investor network

👤 Paul Shannon | Investwise Collective
40+ LP investments • $10M+ raised

And they don't get the only vote. You’re the 8th judge. Watch every pitch, evaluate the deals alongside the panel, and cast your own Pursue or Pass vote.

📅 August 26 | 12 PM ET

💰 CRE BY THE NUMBERS
ALL THE RENTS, MOBS, CONFIDENCE, AND MORE

🏙️ 1.8%

National multifamily rent growth reached 1.8% YoY in July, its fastest annual pace since May 2025, with monthly annualized growth hitting 4.0%, the strongest reading since March 2023. Nearly 89% of metros posted annual gains and 73.4% recorded monthly increases, the broadest participation since September 2025. San Francisco led at 10.3%.

🏢 9.5%

Office net effective rents rose 9.5% over the trailing twelve months to June, with retail close behind at 9.6% and industrial at 3.4%, though office momentum has slowed. Twenty-five of 38 office markets posted positive annual growth. Sacramento industrial jumped 22.5% while Los Angeles and Riverside recorded outright declines of 2.4% and 2.5%, respectively.

🏥 $2.7 billion

Medical outpatient investment volume reached $2.7 billion in Q2, up 24% YoY and 11% above the five-year Q2 average, lifting the trailing-four-quarter total to $14.4 billion. Average sale prices hit $307 PSF, roughly 57% higher than traditional office. Completions fell 76% below the five-year quarterly average as absorption stayed positive for a fifth straight quarter.

📉 61%

Sixty-one percent of private multifamily investors have turned pessimistic on the back half of 2026 as capital-markets volatility persists, and 52% said the first half underperformed their expectations. Nearly half are now underwriting 25 to 50 bps of exit cap rate expansion, while roughly three-quarters assume rent growth no higher than 2.5% through late 2027.

🎙️ THE BEST EVER CRE SHOW
WHY A FUND MANAGER PIVOTED BEYOND MULTIFAMILY

The lease is the asset. That distinction sits underneath every argument for moving capital out of apartments and into industrial, retail, and medical office right now, and it explains why operators who diversified early are sitting in a different position than those who didn't.

On a recent episode of the Best Ever CRE Show, Mike Zlotnik joined Ash Patel and Amanda Cruise to walk through how his fund reallocated away from multifamily concentration and what the other asset classes actually underwrite like.

• Annual Leases Versus Contractual Ones: Apartment rents reset every year against whatever supply and demand are doing in that submarket, which means the underwriting is a forecast. Industrial, retail, and medical office run on leases with known terms and known maturity dates, so the revenue side is a documented quantity rather than a projection.

• Tenant Credit Replaces Renter Turnover: The underwriting question shifts from what a submarket's renters will pay next year to whether a specific business can service its lease through the term. That work is harder in some ways and far more concrete in others, and it rewards operators willing to dig into a tenant's balance sheet.

• Triple Net Absorbs Inflation: When operating costs climbed across the board, triple-net tenants absorbed the increases rather than the owner. Zlotnik also pointed to leverage as the quieter advantage — commercial deals in these sectors typically borrow at roughly two-thirds loan-to-value against multifamily's three-quarters, which changes what a downturn does to equity.

The trade is real. Single-tenant exposure concentrates risk in one credit, and a lease that runs down without renewal takes value with it every year. Zlotnik screens for that by underwriting location stickiness — how expensive it would be for that specific tenant to leave — and by favoring multi-tenant assets where diversification does some of the work.

👉 Listen to Mike’s full episode here.