🧪 A meth lab and a $70,000 lesson

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, a land guy’s nightmare deal, continuation vehicles are back, concessions rise, single-asset deals surge, and much more.

🚀 Tired of bidding wars and 5% returns? The Triple Net Fast Track shows you how to find passive commercial deals that actually deliver. No tenants, no property managers, no competition.

🛑 Stop flipping houses and start building real wealth. Join our free training — Apartments 101 — with Michael Blank and discover how to close your first apartment deal in the next 180 days, even without millions in capital or years of experience.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

📈 Market Peak: LightBox's CRE Activity Index hit 116.8 in September, the highest 2025 reading, as property listings surged 25% MoM following the Fed's rate cut. Preliminary data shows $26 billion in transactions — the busiest month of 2025.

🏘️ Rent Concessions: Nearly 22% of apartments offered rent breaks in Q3 as demand slowed and occupancy fell 30 bps to 95.4%, while September's $6 rent decline to $1,750 marked the sharpest drop since 2009.

🔬 Conversion Opps: Life sciences faces an inflection point as 18.7M SF — roughly 30% of available lab space — could be converted by 2030 amid oversupply, with 223 buildings fully vacant and AI-native biotech firms using one-third less space than traditional companies.

🏭 Modernization Push: Industrial developers see opportunity to replace aging warehouse stock, with tenant demand growing for automation-ready facilities featuring higher ceilings, 10x more power, and precise flooring specifications.

🏢 Office Update: Prime Class A office rents surpassed Q4 2019 levels in Q2, while Class B rents exceeded pre-pandemic marks for the first time as hybrid work stabilizes and construction costs limit new supply.

🏆 TOP STORY
A SEPTIC NIGHTMARE, A METH LAB, AND A $70,000 LESSON

You can have systems in place. You can hire local experts. You can follow your checklist to the letter. And sometimes, a deal can still blow up in your face.

Clay Hepler does land deals remotely across 35 states from his base in Pennsylvania. He has closed over 270 transactions using a reliable due diligence process that includes hiring local brokers to physically walk properties, full drone photography, surveys, environmental checks, and more. This week, on the Best Ever CRE Show, he joined Ash Patel to share a situation where those systems completely failed him.

The Deal: Clay found a five-acre infill lot with Nashville views in Williamson County, the wealthiest county in Tennessee. He got it under contract for $190,000, and his local broker estimated the valuation at $600,000. They got a full-price offer almost immediately. "I was pumped," Clay says. "I'm thinking I'm going to make a quarter of a million dollars on this deal."

Then, a nightmare discovery. In Tennessee, properties without sewer access need septic systems, which requires a percolation test — essentially testing whether the soil can handle wastewater. Clay's lot failed. 

• No problem, he thought. In South Carolina, where he typically operates, you can use an engineered septic system when conventional ones don't work. It’s more expensive, but workable. His local broker agreed with the strategy. 

• The Problem: Williamson County doesn't allow engineered systems. Period. The broker either lied or was simply uneducated.

• The Fallout: The full-price buyer wanted to build a home on the property. Without septic, that wasn’t feasible, so the buyer walked.

And it gets worse. Remember how the broker said he walked the property? Further due diligence revealed an active meth lab on site, complete with a shack and barrels. The same broker who didn't know the local septic regulations also somehow missed the drug operation.

The property sat … and sat. Clay kept dropping the price, but there were no buyers for a residential lot that can't support a home and comes with a free meth lab.

Finally, Clay got creative. He offered owner financing at 4% (below bank rates) with a minimal down payment, selling the property for approximately $190,000 — essentially his purchase price. He then sold that owner-financed note on the secondary market at a steep discount. 

• The Damage: After closing costs, note discount, and carrying costs, Clay lost close to $70,000 personally. He did, however, make all investors whole by paying them back principal plus promised returns out of his own pocket.

Clay learned that remote investing allows you to scale your business, but it also scales your reliance on local partners. When they fail, even systems can't save you.

🎙️ Listen to Clay's full interview here.

🤖 YOU’RE INVITED!
FREE TRAINING: APARTMENTS 101

Flipping houses? That's just another job. Single-family rentals? You'll be lucky to clear $200/month.

📅 Join multifamily expert Michael Blank for Apartments 101: How to Purchase Your First (or Next) Apartment Building in the Next 180 Days on October 21 at 2 pm ET. This game-changing training will show you how to close your first apartment deal in the next six months, even without experience or millions in capital.

Here’s what you’ll discover:

✅ Why multifamily outperforms every other real estate strategy for building lasting wealth

✅ The economics behind profitable apartment deals—what makes them work and how to analyze them

✅ Market trends creating opportunities RIGHT NOW for smart investors

✅ Syndications 101: How they actually work (and how you can use them)

✅ 2 myths holding you back from your first deal and how to overcome them

✅ 3 proven scaling tips to land your first apartment building in 6 months

💰 CRE TRENDS
GPs ARE AVOIDING SELLING FOR LOSSES. HERE’S HOW.

GPs are dusting off the 2008 playbook. But this time it's not survival — it’s strategy. Continuation vehicles, once the last resort for distressed managers, are now the first call for sponsors who refuse to sell at a loss.

GP-led deals in the real estate secondaries market surged 52% to $9.3 billion in 2024. The overall RE secondaries market jumped 49% to $14.6 billion. So it’s clear that instead of exiting deals at discounts, sponsors are restructuring.

Here's how it works. GPs facing fund maturities give existing investors a choice: Cash out now or roll your stake into a new vehicle that extends the hold period another five to eight years. New LPs can join to replace those who exit, creating fresh liquidity without forcing asset sales into a brutal market.

The current state of CRE is an ideal market for these vehicles:

• Timing Collision: Private equity funds created in 2015-2016 with eight-to-ten-year terms are hitting maturity just as higher interest rates make refinancing far more expensive than originally underwritten.

• Performance Pressure: When assets cost more to hold than anticipated, sponsors aren't hitting their hurdles to earn incentive compensation, so they don't want to sell.

• Economics Have Flipped: Borrowing costs and operating expenses have fundamentally changed from the assumptions made eight to ten years ago when these funds launched, making original exit timelines obsolete.

• The Fundraising Dilemma: Sponsors need to return capital to raise new funds, but selling now means locking in losses. Continuation vehicles let them do both by offering exits to some LPs while keeping assets alive.

The modern turning point came in October 2020 when Blackstone executed a $14.6 billion recap of BioMed Realty Trust, giving existing investors the option to stay in or cash out. That deal moved continuation vehicles from niche strategy to mainstream tool.

• Where they're being used: Mostly in alternative sectors like senior housing, logistics, and life sciences, where valuations are clearer. The strategy hasn't penetrated struggling asset classes like office, hotels, or retail because getting multiple LPs to agree on pricing is nearly impossible when fundamentals are too uncertain.

The execution isn't easy. Continuation vehicles typically take six-plus months and require alignment on valuations across multiple parties. But the infrastructure is improving. Investment banks are providing fairness opinions, and national appraisal firms have standardized processes across portfolios.

THE BOTTOM LINE

Continuation vehicles are the new normal for sponsors who can't — or won't — sell into today's market. When GP and LP interests align, they're the preferred alternative to crystallizing losses in an environment where nothing feels stable.

📝 BEST EVER COURSES
TRIPLE NET FAST TRACK

Tired of chasing overpriced apartments? There's a better way.

While everyone's fighting over the same tired multifamily deals with razor-thin returns, smart investors are quietly building wealth and generating passive income with Triple Net (NNN) properties.

The Triple Net Fast Track is your shortcut to commercial deals no one else is seeing. Learn directly from Ash Patel, who's closed dozens of NNN deals nationwide, alongside Matt Faircloth, who bridges the gap between multifamily and NNN investing.

Five focused modules. Zero fluff. All the tools you need.

Inside this video masterclass:

🎯 Deal sourcing strategies that uncover hidden retail opportunities others miss.

📊 Pro forma analysis frameworks to evaluate deals with confidence, including CAM calculations and tenant analysis.

🧰 Complete toolkit included: Worksheets, templates, and materials for every module.

💼 Real student wins: See how investors found strip malls and retail properties flying under the radar.

📈 Practical, step-by-step guidance you can implement immediately.

No more property managers. No more midnight maintenance calls. No more bidding wars over mediocre returns.

Get the fast track to truly passive commercial income.

📋 CHART OF THE WEEK
LARGE SINGLE-ASSET DEALS SURGE TO RECORD LEVELS

Big money is passing on portfolios and going all-in on single properties. Large single-asset deals over $100 million in logistics, retail, and multifamily hit record highs in Q2, even as total CRE sales remain 20% below 2019 levels.

The numbers tell a tale of two markets. While overall transaction volume stays sluggish, big-ticket individual deals are booming. Q2 saw these large transactions climb to record levels — not including the mid-pandemic peak — in logistics, multifamily, and even retail.

What's driving the surge:

• Capital Concentration: Over half of all real estate fund capital raised this year went to just 10 large fund managers deploying it strategically on fewer, bigger deals.

• Quality vs. Quantity: Deep-pocketed investors are targeting resilient, top-tier assets rather than taking portfolio risks in an uncertain market.

• Supply Dynamics: The development surge in logistics and multifamily between 2021-23 added more high-quality properties to chase, while retail sees elevated activity despite minimal new construction.

The contrast with office couldn't be more stark. Pre-2020, office dominated high-value sales. Today, office deals over $100 million totaled just $14 billion in the past 12 months, down from the $40-50 billion annual norm pre-pandemic. Multifamily now leads, followed by logistics and select retail.

Portfolio deals have stayed flat, but could rebound quickly once leasing activity picks up and confidence returns. Until then, institutional investors are sticking with what works: large, high-quality individual assets offering safer returns. 

▶️ WATCH THE REPLAY
CAPITAL RAISING FEELING HARDER THAN EVER?

Chasing investors doesn’t scale. That’s why the top CRE professionals publish books — a 24/7 lead magnet that establishes authority and attracts capital.

In this replay, Chandler Bolt (Forbes 30 Under 30) shows you how to:

• Draft your book in a weekend (without writing a word)

• Launch it to position yourself as the go-to authority

• Use it to generate 7-figure revenue streams