🏬 American malls are changing. Will it work?

👋 Hello, Best Ever readers!

In today’s newsletter, malls get (another) makeover, tariffs bring in billions, an MVP gets sued, RV parks thrive, and much more.

🎓 But first … Join us and selfpublishing.com at 1 p.m. ET on Aug. 21 for an exclusive free workshop to learn how you can turn your CRE expertise into a bestselling book. Spots are limited, so lock in your seat now!

💎 Also … there’s a hidden gem in CRE that’s delivering 12%+ returns. Can you name it? If not, download this exclusive FREE report from Sunrise Capital Partners today and discover it for yourself.

O.K., enough housekeeping.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

💰 Tariff Record: Trump's tariffs generated a record $27.7 billion in July, up from $8 billion a year ago, bringing fiscal year totals to $135.7 billion as tariffs continue to push higher construction costs, increased industrial demand from reshoring, retail tenant stress, and growing logistics needs.

⚾ MVP Lawsuit: The Dodgers' Shohei Ohtani and his agent are accused of sabotaging a $240 million Hawaii luxury development, allegedly forcing developer partners out after using "celebrity leverage" to demand concessions on the 14-home project averaging $17.3 million each.

🤖 Rent Rigging: Greystar has agreed to stop using RealPage's rent-setting algorithms in a DOJ settlement over alleged price-fixing, marking a major precedent as prosecutors target algorithmic collusion in housing markets nationwide.

🏢 Back to Office: Seventy-two percent of organizations now report meeting office attendance goals, up from 61% in 2024, as policy enforcement doubled to 37% and the gap between employer expectations and employee behavior continues to close in hybrid work environments. 

📦 Storage Support: Ninety-four percent of lenders report unchanged appetite for self-storage lending despite tighter underwriting, with three-quarters avoiding loan restructures in the past year as the sector maintains stability amid broader CRE market pressures and construction slowdowns.

🏆 TOP STORY
HOW SAVVY OPERATORS ARE REVIVING AMERICAN MALLS

The latest major retail casualty — Claire's, which filed bankruptcy this week — is just another indication that traditional mall tenants continue to struggle. In light of this, savvy mall operators are ditching legacy boutiques and department store anchors for bookstores, bowling alleys, and even churches and concert venues — and so far, it’s working. This new wave of anchors can generate up to three times the revenue of struggling traditional anchors like Sears or Macy's.

Crossroads Church, for instance, has transformed 90,000 square feet of a former Sears at Ohio's Dayton Mall into a community hub, drawing thousands of churchgoers who stick around to shop and eat. The strategy creates 'cross-shopping' opportunities — when someone visits for church services or entertainment, then stays to grab food or shop at other stores. It's just one aspect of the American mall playbook that is being rewritten. 

Other recent pivots include:

• Subdivided Spaces: Former anchor stores are being carved up among multiple tenants. CBL Properties reports that some subdivided former Sears locations now generate five to six times their previous $7-8 million annual revenue.

• Mixed-Use Conversion: Mall owners are adding apartments, large food courts, bowling complexes, yoga studios, and restaurants like The Cheesecake Factory to create community gathering spaces.

• The Barnes & Noble Effect: The bookstore chain outperformed both Macy's and JCPenney at Albuquerque's Coronado Center, accounting for 7.9% of mall visits in 2024, with plans to add 10 more mall locations this year.

• Experiential Entertainment: The American Dream mall in New Jersey, which has reimagined the mall concept altogether, hosts major events like JONASCON (a Jonas Brothers fan experience) and WWE SummerSlam takeovers to drive foot traffic beyond traditional shopping. It also hosted a series of festivities ahead of the FIFA Club World Cup matches played in New Jersey this summer, including the final. It also has the nation’s largest indoor waterpark.

The turnaround is showing results. Placer.ai data reveals tangible increases in enclosed mall traffic, with 2024 holiday season visits ahead of general retail trends. Gen Z particularly embraces the mall experience, seeking in-person social spaces that older generations remember fondly. Mall visits increasingly happen for reasons beyond shopping — seasonal events, dining, movies, and entertainment draw crowds who then cross-shop at traditional retailers.

THE BOTTOM LINE

The American mall isn't dead. It's evolving into something closer to a community center than a shopping destination. By embracing non-traditional tenants and experiential offerings, struggling malls are finding new life and significantly higher revenues. The key is creating destinations that give people reasons to visit, stay longer, and spend across multiple businesses. It's taken years for this anchor backfill strategy to pay off, but mall operators who've successfully pivoted are beginning to see the payoff.

📚 FREE LIVE EVENT
TURN YOUR CRE EXPERTISE INTO A BESTSELLING BOOK

Want to establish yourself as THE authority in commercial real estate? 

On August 21st at 1 p.m. ET, we're hosting an exclusive FREE workshop with Chandler Bolt, bestselling author and CEO of selfpublishing.com. Chandler will reveal The 3 Key Principles for Growing Your Business with a Book — the same system that's helped him publish over 365 books in just the last 12 months — so you can:

🏢 Build massive authority in your CRE niche

💰 Generate passive income for life

📈 Attract high-quality investors and deals automatically

Chandler has grown selfpublishing.com to over $8,000,000 per year and will show you how to find your bestselling book idea, turn it into a finished book, and sell it without being "salesy."

The workshop is completely free, but spots are limited. Register below before we hit capacity! 🚀

💰 CRE BY THE NUMBERS
RECORD DEMAND, THE RISE OF RV PARKS, AND MORE

🏘️ 15 

Out of the nation's 50 largest apartment markets, 15 hit all-time demand records in Q2, according to RealPage, with record absorption pacing ahead of completion volumes. Dallas led with over 42,200 units absorbed — double its 10-year average — while Atlanta, Phoenix, and Charlotte absorbed 22,000-33,000 units each at roughly three times their decade norm, mostly concentrated in the South.

🔄 1,100 

NYC developers are converting at least a dozen former migrant shelter hotels into apartments, creating over 1,100 units so far, with potentially dozens more conversions ahead. Hotels work well for residential conversion due to existing bathrooms and natural light, taking about half the time of ground-up construction at lower costs.

🏕️ $30 Billion 

The outdoor hospitality industry could grow from $8-9 billion today to $30 billion within five years as investors pour money into luxury RV campgrounds. These high-end sites can cost near $100 nightly — double standard RV rates — featuring amenities like putting greens, lazy rivers, and coworking spaces for $1 million rigs.

💰 $1 Million 

Affordable housing projects using LIHTCs routinely cost more than $800,000 per unit in major markets, with some exceeding $1 million, while market-rate apartments typically cost under $500,000. Soft costs for LIHTC projects often surpass 25% of budgets due to complex financing requirements, multiple funding sources, and extensive compliance needs.

🏘️ DEAL OF THE WEEK
76% CASH-ON-CASH AND 10% PREFERRED RETURNS

Justin Burke and the team at VitaCare Living doubled the occupancy rate at this assisted living facility to produce 76% annual cash-on-cash and 10% preferred returns for investors.

Here's how they’re doing it 👇

🏢 Property details: This Class B assisted living and memory care community was purchased in July 2021. It’s located in Proctor, Minnesota, and has capacity for 30 residents.

💸 Finances: The property was purchased for $850,000. The team raised $150,000 in capital and secured a $680,000 loan at 3.89% fixed interest for a 10-year term.

💼 Business plan: Renovations included flooring, paint, and the installation of several furnaces. The team also replaced management and completely overhauled the nursing and administrative staff. Upgrading staff in this way allowed them to admit higher acuity residents, which drastically increased revenue. Occupancy was at 53% at the time of purchase, and they now rarely experience vacancy.

The team currently has no plans to sell or refinance and will instead hold the property for cash flow.

🍾 Results: Today, the property generates $800,000 in annual NOI, 76% annual cash-on-cash returns, and 10% preferred returns for investors. Its current property value is estimated to be over $7 million.

💪 Takeaways: "Only 20% of our rooms are private, the rest are shared,” said Burke. “This made it more difficult to attract residents until we changed the mindset in the building and made it about community instead of privacy.

“I hired the wrong person to lead our staff,” he continued, “which made it difficult to keep good employees. Ultimately, it took two years to put the right leadership in place to correct the operational problems.”

👉 If you have a deal you'd like us to feature, share it with us!

🎓 EXPERT RESOURCES FROM SUNRISE CAPITAL INVESTORS
FREE DOWNLOAD

UNLOCK THE PARKING LOT GOLDMINE

While most investors chase crowded apartment deals and overpriced office buildings, smart money is quietly accumulating parking lots — one of CRE's most overlooked cash cows. With vehicle registrations surging from 285 million to over 350 million by 2040 and urban density creating severe parking shortages, this asset class is primed for explosive growth.

Inside this exclusive report:

• Cash Flow Maximization: Discover the three revenue streams most parking lot owners completely ignore 💰

• EV & Autonomous Vehicle Impact: Get the real data on how emerging tech creates opportunity (not threats) for savvy investors 🔋

• Acquisition Secrets: The "hidden gem" parking lots that deliver 12%+ returns while others settle for 6-8% 📊