🏢 Buying at 15 cents on the dollar

👋 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.