💰 Dillard's paid $34M for a whole mall. But why?

👋 Hello, Best Ever readers!

In today’s newsletter, Dillard’s plays defense, renters run late, Aldi explodes, Kansas City shines, and much more.

🎓 But first … Join us September 2 at 2 p.m. ET for Fund Administration Demystified — a free expert session designed for GPs who want to master the art of fund operations. Can’t make it? Register anyway, and we’ll send you the replay.

🚗 Plus, grab this exclusive parking lot investment report from Sunrise Capital Investors — 65+ million new vehicle registrations by 2040, but parking supply stays flat (do the math).

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

💸 Rent’s Due: On-time apartment rent payments have declined since April 2023 as financial strains mount, with late payment rates climbing from 8.8% to 11.7% in June as renters increasingly rely on mid-month income to catch up on overdue rent.

⛪ Holy Rolling: Religious construction spending surged nearly 17% in the 12 months through June as churches add coffee shops, childcare, and community amenities to attract new members, with projects like Wake Church's $6.5 million Kroger conversion leading the trend.

🏭 Big Box Boom: Industrial bulk leasing of 100,000-plus SF spaces jumped 17.5% to 177M SF in H1, led by logistics and manufacturing companies. Still, net absorption dropped 33% due to rising move-outs in smaller properties.

🏘️ Priority Shift: Fewer landlords plan portfolio expansion, as buying intentions dropped from 67% to 53% over six months. More landlords are focused on property improvements, with 35% expecting to spend over $20,000 on upgrades this year, up from 27%.

📊 Recovery > Recession: More CRE markets are in recovery than recession for the first time in years, with a clear flight to quality emerging as investors prioritize high-performing assets as underwriting focuses on long-term resilience over momentum.

🏆 TOP STORY
DILLARD’S DROPPED $34 MILLION ON A MALL. HERE’S WHY.

While most department stores are fleeing malls and selling real estate as fast as possible, Dillard's just dropped $34 million to buy the Longview Mall in Texas. The move reveals a calculated strategy to protect their retail operations from what they call "bad actors" in the mall ownership game — investors who buy distressed properties at rock-bottom prices, then let them deteriorate while collecting rent from trapped tenants.

Regarding the threat these operators pose, Dillard's co-CFO Chris Johnson didn't mince words when speaking to The Wall Street Journal, specifically citing concerns about owners who don't pay utility bills or property taxes while allowing properties to fall apart. Though he declined to name names, the most prolific mall buyers in recent years — Kohan Retail Investment Group and Namdar Realty Group — have faced criticism and lawsuits from city officials for exactly these practices.

Here’s how Dillard’s is playing offense by going on the defensive:

• Anchor tenant protection: Unlike typical retailers that can relocate when leases expire, department stores usually own their anchor spaces, making them vulnerable to landlord neglect that destroys foot traffic and shopping experience.

• Defensive acquisition: The Dillard's move represents a rare case of a retailer buying real estate to ensure operational continuity rather than for investment returns.

• Market opportunity: The deal highlights how distressed mall assets can attract non-traditional buyers when priced appropriately. Longview Mall was identified as one of only 14 healthy properties in the previous owner’s post-bankruptcy portfolio.

• Contrarian positioning: While Macy's targets $750 million in asset sales and JCPenney sold 119 stores for $950 million, Dillard's boasts a strong balance sheet ($1 billion cash), enabling it to acquire rather than divest.

• Operational control: Trademark Property, which partnered with Dillard’s on the deal, will handle leasing and management, focusing on basic improvements like replacing broken lights and updating common areas to drive traffic and tenant interest.

The acquisition underscores a broader trend where quality retail real estate faces a bifurcated market, as premium properties attract institutional capital while distressed assets fall to opportunistic buyers with questionable operational intentions. For anchor tenants with long-term commitments, strategic real estate acquisition becomes a defensive necessity rather than an investment play.

THE BOTTOM LINE

This defensive strategy highlights how quality mall assets may increasingly attract premium buyers willing to pay for operational control, while distressed properties remain dominated by value players focused on cash extraction rather than improvement. Retailers with strong balance sheets may begin competing for strategically important properties, creating new demand dynamics in what many consider a dead asset class.

⛽ UNDERSTANDING THE ENERGY CRISIS
WHY SMART MONEY IS MOVING INTO OIL & GAS

⚡ The global energy situation is stark: Oil and gas investment has plummeted 55% since 2014, yet fossil fuels still power 81% of global energy and 91% of transportation. J.P. Morgan Research projects oil markets could face a staggering 7.1 million barrel-per-day deficit by 2030, potentially driving prices to $150 per barrel.

The energy crisis isn't just a challenge, it's a once-in-a-decade investment opportunity. Discover how to position yourself ahead of the curve while others are looking the other way in this industry breakdown from Aspen Funds. You’ll learn:

• Why the "end of fossil fuels" narrative overlooks critical market realities

• How declining investment has created a supply-demand imbalance

• Four proven ways to invest in oil & gas, from mineral rights to midstream opportunities

• Strategic approaches that balance high returns with risk management

👇 Click below to read the full analysis and get access to Aspen Funds’ energy investment strategy with their latest venture, the 51 Upstream Energy Fund VII.

💰 CRE BY THE NUMBERS
DEALS FLOW, NOLA SUFFERS, ALDI EXPLODES, AND MORE

💰 $115 Billion 

CRE transaction volume totaled $115 billion in Q2, up 3.8% YoY, driven by multifamily surging 39.5% and office gaining 11.8% to account for 44.1% of total volume. However, 41,463 properties transacted, down 7.4% YoY, as coastal metros outperformed national trends (except New York and San Francisco).

​​🏘️ $35.1 Billion 

Apartment transactions made up $35.1 billion of that Q2 volume, up 11% from Q1 but down 14% YoY, with July sales inching up just 1% YoY to $10.6 billion, according to RealPage. Average price per unit held at $213,629 — well above the 2015-2019 average of $151,000 — while cap rates eased to 5.41%, the lowest among major property types.

🌀 20 Years 

It’s been 20 years since Hurricane Katrina caused $201 billion in damage and wiped out 123,000 homes. Still, New Orleans' promised CRE renaissance remains unfulfilled, with 350,000 fewer residents than before the storm and less than half of pre-storm publicly traded companies returning as rising insurance costs now drive development away from flood-prone areas.

🛒 200 

Aldi will reach around 2,600 U.S. stores by year-end after opening more than 200 locations in 2025, with Florida accounting for nearly half of all announcements. The expansion is fueled by converting over 40 former Winn-Dixie stores from its 2023 acquisition of 400 Southeastern Grocers locations.

🗺️ ON THE MAP
MARKET SPOTLIGHT: KANSAS CITY, THE HEART OF AMERICA

Taylor Swift and Travis Kelce aren't the only big thing going in Kansas City in 2025. While coastal cities navigate oversupply and pricing corrections, Kansas City is quietly becoming the CRE story of 2025. With $2.7 billion in trailing transaction volume and cap rates that actually pencil, the Heart of America is proving that boring fundamentals beat flashy headlines.

📈 Kansas City is delivering results across market sectors:

• Industrial: 7.5M SF positive net absorption in Q1 (second-highest quarterly total in market history)

• Office: 432,000 SF positive absorption in H1, defying national trends

• Multifamily: 96.4% occupancy with 4% rent growth (second highest nationally)

• Retail: 95.9% occupancy with $520M in investment volume over 12 months

💰 Major corporate commitments aren't cost-cutting relocations, they're billion-dollar bets on Kansas City's future:

• Pfizer: $175 million commitment, 425,000 SF, 2,000 jobs

• Panasonic: $4 billion EV battery plant, 8,000 total jobs

• Google/Meta: $1.8 billion in data center investments

• Fiserv: 427,000 SF lease (largest new-to-market lease in KC history)

🧢 Cap rates offer real value at a 7.1% average:

• Multifamily: 6.0% 

• Retail: 7.1%

• Industrial: 7.6%

• Office: 8.4%

🏗️ Infrastructure is happening now, unlike markets promising future improvements:

• $6.3 billion across eight major developments under construction

• $351 million streetcar extension will be completed this year

• $334 million in downtown public space investments

• 88% downtown population growth since 2010

• $3 billion+ in completed development over the past five years

📣 "Kansas City isn't the next big thing,” local broker Logan Freeman said on the Best Ever CRE Show this week. “We're the right thing happening right now. While everyone else hopes for markets to come back, Kansas City never left. We're delivering today what other markets are promising tomorrow.”

Read the full market breakdown here.

🎓 EXPERT RESOURCES FROM SUNRISE CAPITAL INVESTORS
FREE REPORT

THE PARKING SHORTAGE HIDING IN PLAIN SIGHT

While you're getting crushed by taxes on your current investments, a massive supply shortage is brewing right under your nose. With vehicle registrations jumping from 285 million to over 350 million by 2040 and the U.S. population growing from 325 million to 400 million by 2050, parking supply can't keep up.

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• Tax Optimization Secrets: How parking lot investments can slash your biggest annual expense 💰

• Future-Proofing Your Portfolio: The real data on autonomous vehicles (hint: it's not what the media says) 🚗

• Perfect Storm Timing: Why the next 15 years represent a once-in-a-generation opportunity ⏰