🎡 If drugstore tenants are out, who's in?

👋 Hello, Best Ever readers!

In this week’s newsletter, drugstores are out, builders brace for tariffs, hotels heat up, and net lease investments surge.

Today’s edition is presented by Vintage Capital, which is currently accepting investments in a diversified fund of recession-resilient mobile home parks. Discover more about investing in MHPs today.

Let’s CRE!

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CRE HEADLINES

😣 Bracing for Tariffs: U.S. housing starts fell 9.8% in January to 1.37 million units while multifamily starts fell 11%, signifying that builder confidence has declined amid concerns over President Trump's tariff threats and high housing costs.

🔥 Hotels Heating Up: A January CBRE survey shows 94% of hotel investors plan to maintain or increase holdings in 2025, up from 85% in 2024. Inflation protection, limited new construction, and strong performance — particularly in NYC — are driving investor interest.

☣️ Toxic Mold Settlement: A Nevada jury awarded $6.6 million to a family over toxic mold and a ceiling collapse at their Las Vegas apartment. Despite 36 prior complaints about leaks and mold, the property manager allegedly failed to address issues. The company has appealed the verdict.

🔎 Warehouse Woes: As industrial developers focus on larger spaces due to better economics, the vacancy rate for warehouses under 100K SF was 3.9% in Q4 compared to 10.1% for larger spaces, leaving businesses looking to downsize into smaller warehouses without many options.

🎙️ Cardone’s Right Hand: Cardone Capital EVP Ryan Tseko joined the Best Ever CRE Show this week to discuss working for Grant Cardone, the firm’s strategy of combining fixed-rate financing with 10-year hold periods, bundling Bitcoin with multifamily investments, and more. Listen to the full episode here.

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IF DRUGSTORE TENANTS ARE OUT, WHO’S IN?

Retailers have announced more than 9,900 store closures in the past year, outpacing the number of store openings by more than 2,000. Even with national retail vacancy at a near-historic low of 4.1%, these closures threaten to create more than 140 million square feet of available retail space in 2025.

• Drugstores have been hit hardest. Walgreens announced in October that it plans to close 1,200 stores over the next three years. CVS closed 900 locations between 2022 and 2024 and is likely to announce more closures in 2025. Rite Aid has closed more than 800 stores since filing for bankruptcy in 2023.

• Other mass closings include Party City (700 stores), Big Lots (500+ locations), and Macy’s (150 closures over the next three years), among many others contributing to a list of closures that could reach 15,000 in 2025.

Retail landlords are adapting by targeting experience-driven tenants. Food and beverage leads with 21% of 2024's leasing activity through chains like McDonald's and Chipotle, while fitness concepts like Planet Fitness and Club Pilates claim 12%. Healthcare providers, including urgent care and dental offices, represent 6% of new leases, while niche grocers and even pickleball concepts are adapting empty spaces.

Dollar stores are also snatching up vacated pharmacies, with Dollar Tree nabbing 300 vacated Walgreens locations in the last year and Dollar General announcing 800 new store openings early in 2024.

WHAT IT ALL MEANS

Retail leasing dynamics are shifting toward experience-based tenants, with growing consumer demand for services and experiences over goods. This trend is expected to continue to drive leasing in 2025 as traditional retailers struggle, pharmacies dwindle, and landlords adjust lease terms to fill vacancies in a changing landscape.

_{💰 VINTAGE CAPITAL}
WHY MOBILE HOME PARKS, AND WHY VINTAGE CAPITAL?

Looking for stable returns in today's volatile market? Vintage Capital offers direct access to one of commercial real estate's most recession-resilient sectors: Mobile Home Parks.

With an $80+ million track record of successful deployments, Vintage doesn’t just talk about results. It delivers them.

Why Vintage Capital?

• Proven Performance: Track record of strong returns through multiple market cycles.

• Strategic Diversification: Recent investments in high-growth markets including Austin and Charleston.

• Institutional Access: Pooling capital opens up access to premium deals and operators typically reserved for large institutions.

• Flexible Options: Invest directly in properties or through Vintage’s diversified fund. 1031 exchanges are also possible. 

Mobile home parks offer remarkable stability with average tenant stays of 10-12 years — four times longer than multifamily residents — providing predictable cash flow and lower operating costs while serving the essential need for affordable housing. 

Now is the time to take advantage of this highly recession-resilient asset class. Get started today and enjoy the benefits of investing in mobile home parks with Vintage Capital.

_{💰 CRE TRENDS}
NET LEASE INVESTMENT VOLUME SURGES 57% YOY

Net-lease investment volume increased by 19% QoQ and 57% YoY in Q4 to reach $13.7 billion, according to CBRE. This strong quarter helped drive full-year 2024 volume to $43.7 billion, a 13% increase from 2023.

The industrial and logistics sector dominated this growth, increasing its market share to 64% in Q4 from 54% the previous year. Net lease investment in industrial assets surged 87% compared to the prior year, while the office sector’s share decreased slightly from 20% to 19% and retail’s fell from 26% to 18%.

Key factors behind this surge include:

• Predictable cash flow and appeal to investors seeking solid risk-adjusted returns.

• Growing preference for low-risk opportunities amid potential market volatility.

• Attractive 2-3% annual escalations on long-term net leases.

• Continued expansion of e-commerce and evolving supply chain needs.

• Widening cap rates making positive leverage more accessible.

While higher long-term interest rates are expected to weigh on capital markets activity in H1 2025, CBRE forecasts an 8% increase in overall investment volume for the year as investment fundamentals are expected to remain healthy, reflecting the sector’s stability.

_{🖥️ BEST EVER CONFERENCE IX}
10 DAYS TO BEST EVER CONFERENCE IX!

Best Ever Conference IX kicks off in just 10 days! We can't wait to see you there.

🏠 Here are some housekeeping items to make sure you're prepared and help you have the Best Ever experience: 

• Registration will be open from 12-5pm on Sunday, March 2, and from 7:30am-5pm on Monday, March 3, in the Blue Spruce Room. Please stop by as soon as you arrive to pick up your badge.

• Get the Best Ever Conference app: Download the Pheedloop Go! app through iOS or Android and use the email address you registered with to find the Best Ever Conference 2025 event. It’s the best way to stay plugged into what’s happening at the conference.

• Looking for fun things to do around Salt Lake City while you're in town? Check out this great guide to the city. 

You can still secure your ticket, and join us! Click below to grab your ticket, and use promo code hurry25 at checkout for 25% off.

_{🏠 DEAL OF THE WEEK}
MOBILE HOME PARK DEAL DOUBLES INVESTOR MONEY IN JUST 14 MONTHS

Tim Woodbridge and the team at WCG Communities doubled investor money on this mobile home park in just 14 months rather than the four-year projected period.

Here's how they did it 👇

🏢 Property Details: This C Class mobile home park is made up of 55 lots and one single-family home. It is located in Henderson, North Carolina, and was purchased in November 2022.

💸 Finances: The property was purchased for $1.05 million. It was a joint venture (JV) deal with $800,000 of seller financing secured at 5% interest-only for five years. $250,000 was used for a down payment, and $100,000 was used for CapEx and reserves.

💼 Business Plan: The previous owner was elderly and still self-managing the community, which led to a lot of deferred maintenance. Tim and his team repaired the poorly maintained roads, fixed all running water leaks in the community (which were the cause of the road problems), and replaced septic tanks and drain lines.

The original projected hold period on this property was four years, but they got a great offer after the first year and sold.

🍾 Results: The team originally projected to sell the property at $1.4 million in 2026, but the property was sold in February 2024 for $1.55 million. All JV partners doubled their investment in just 14 months.

💪 Biggest Challenge: “The biggest challenge was getting all tenants used to things being run like a legitimate company with specific rules and regulations,” Tim said. “We almost had our rockstar community manager quit because tenants were being nasty to her. I had an in-person community meeting with residents to answer all questions and show our manager some solidarity. She stayed on board.”

“We also thought we weren’t responsible for any of the water leaks in the community when we took over because the seller told us she didn’t pay for any water. After purchase, the city informed us that we were responsible. We solved the problem, but we know now to talk to municipalities before we buy anything.”

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

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FREE DOCUMENT DOWNLOAD

19 Proven Strategies to Attract High-Quality Tenants to Your Rental Property

Filling your multifamily property with the right tenants is critical to your overall business plan. Choose incorrectly enough times, and it could drastically impact occupancy and your overall bottom line. Here are 19 creative and effective ways to market your rental listings, get the residents you desire, and increase overall occupancy.