📗 Gen Z is rewriting the rental playbook. Here's how.

👋 Happy Sunday, Best Ever readers! We hope you have a safe and enjoyable Memorial Day. Let’s all take a moment to remember what it truly means.

In today’s newsletter, amenities get an upgrade, Trump tries again, retail volume surges, ugly boxes win, and more.

Today’s weekend edition is presented by Ownwell’s best-in-class tax reduction services. Schedule a free consultation today and see how much you could save on property taxes.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

Future of Fannie, Freddie: President Trump said he's giving "very serious consideration" to taking Fannie Mae and Freddie Mac public after over a decade of government control. A public offering could raise up to $382 billion, potentially becoming one of history's largest IPOs, but not without collateral damage.

Shovel Ready: Rising construction costs are driving growing developer interest in "shovel-ready" properties as well as “double-ready” sites, which come with both permits and architectural approvals secured, as developers seek to reduce expenses and timeline risks.

Spring Slowdown: March was the slowest month in nearly a year for CRE deals, with transaction volume dropping 3.9%. All property types except industrial and hotel declined, though some indicators suggest potential recovery as investors pause.

Next-Gen Retail: New retail concepts focused on wellness, health, fitness, pets, and ethnic foods are filling spaces left vacant by big-box legacy chains while indoor golf simulators, IV drip centers, and diverse grocery chains are replacing traditional tenants as landlords adapt to post-pandemic consumer priorities.

Office Recovery: U.S. office sales totaled $185 billion in Q1 2025, up 34% YoY, with buyers and lenders returning to the office market as prices reach attractive entry points, with trophy assets in mixed-use settings drawing renewed interest.

🏆 TOP STORY
GEN Z IS REWRITING THE RENTAL PLAYBOOK

Gen Z renters are fundamentally transforming the multifamily housing market, moving away from the trend of renting a basic apartment after graduation just to get a roof over their head. Instead, this generation — representing 47% of recent U.S. renters and 25% of all renters — seeks amenity-rich, high-design complexes that offer instant, self-contained communities where they can curate their living experience like a personalized social media feed.

• Gen Z represents 9.1 million renter households as of 2023, with 44% living in apartment-style buildings that demand immediate attention from developers and investors.

• Essential amenities now include fitness centers, coworking spaces, social lounges, pools, yoga studios, pet salons, coffee bars, and Instagram-worthy design elements that serve both functional and aesthetic purposes.

• Gen Z actively prioritizes mental health by seeking environments that positively impact mood and productivity while avoiding spaces with "heavy energy" that could harm their well-being.

• This generation expects apartment hunting to be "as simple as renting an Uber," with seamless online processes that eliminate traditional rental friction points.

• One Surprising Trend: Mailrooms — redesigned with lounge seating, soft lighting, and work tables — have become central gathering spaces, combining daily package pickup with community interaction and coworking functionality.

Unlike previous generations, Gen Z prioritizes community over individual space, seeking buildings that function as "thriving young communities" where residents support each other's goals. They're willing to pay premium rents ($1,260-$3,595 monthly) for spaces that serve multiple functions — living, working, socializing, and content creation.

Visual aesthetics matter tremendously. Spaces must be Pinterest-worthy with natural light, color-coordinated libraries, and chandelier lighting. Post-pandemic, the apartment buildings where they live have replaced traditional nightlife scenes as the primary place where Gen Z-ers form genuine relationships.

WHAT IT ALL MEANS

The Gen Z revolution represents a permanent shift demanding significant investment in amenities and design, but creates opportunities for premium pricing and reduced turnover. Gen Z views quality rental experiences as "adding value" rather than "throwing money away." Investors who prioritize community-building over individual amenities will capture this dominant market segment and command higher rents as this generation enters peak earning years.

🏘️ TOGETHER WITH OWNWELL
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Don't leave money on the table. Schedule a consultation today to determine if YOUR properties are overassessed and estimate your potential savings.

💰 CRE TRENDS
RETAIL Q1 VOLUME JUMPS 13% TO $9.8 BILLION

The retail sector started 2025 strong with transaction volume jumping 13% to $9.8 billion.

• Grocery-anchored centers dominated activity, capturing nearly one-third of multi-tenant deals with institutional investment quadrupling YoY.

• Urban retail showed resilience through major acquisitions like Uniqlo's $352.5 million Fifth Avenue purchase and Apple's $88 million Boston deal.

• Big-box and mall investments surged 82% as investors targeted value-add opportunities, with the Mid-Atlantic leading regional growth at 38%.

As the Fed signals potential rate cuts ahead, investors are clearly gravitating toward stable, necessity-based assets that can weather broader market volatility.

🎙️ BEST EVER PODCAST
HOW TO WIN WITH UNDERPERFORMING INDUSTRIAL

Brian Ker, President of Snowball Developments, joined Amanda Cruise on the Best Ever CRE Show this week to share a contrarian approach to industrial investing. While most investors chase pristine buildings in suburban markets, Brian targets underperforming properties on premium urban infill sites. "Throw out the idea of buying a nicer box in a far-away land," he says. "Focus on the ugly box in the best location."

Here’s Brian’s strategy in action:

• Target Urban Infill Sites: Look for 2-3 acre properties in fully built-out areas with no competing green space. Brian's team will even buy buildings from the 1940s if the dirt is irreplaceable — proximity to highways, ports, and labor pools makes tenants "sticky."

• Buy Underperforming Assets on Premium Land: Focus on properties where rents reflect years of underinvestment. "We come in fully capitalized to renovate and improve a not-great property on a great site," says Brian.

• Leverage the E-Commerce Shift: Industrial tenants now prioritize proximity to population centers for last-mile delivery. "Industrial is retail now," Brian says, with users paying premiums for urban access rather than accepting discounts for better buildings further out.

Real-World Example: Brian's team bought a property in New Jersey at less than $2 million per acre when development comps were trading at $3-3.5 million per acre. Even if they lost their tenant and had to scrape the buildings, they'd still own prime development land at an attractive basis.

This approach turns conventional industrial wisdom on its head. Instead of evaluating deals on building metrics like clear height, focus on irreplaceable location advantages and untapped site potential. The downside protection is built in — lose your tenant, and you're left with prime dirt that likely makes economic sense for redevelopment.

🎙️ For more on this strategy, listen to Brian’s full episode here.

🎓 BEST EVER TIPS
A COMMERCIAL LEASE CLAUSE TO CONSIDER

TENANT RESPONSIBILITY CLAUSE

In his recent book, Value Over Volume, investor Tanh Truong shares how a nail salon tenant wanted to relocate her entryway door for "Feng Shui" reasons at a $50,000 cost, and she wanted Tanh to foot the bill. But because a clause in the lease made the tenant responsible, he was off the hook. Retail and industrial tenants often want to customize entrances or add glass storefronts. So to protect yourself from a potential five-figure cost that could eat into your returns, make sure this clause is in each of your commercial leases.

📚 For more tips and stories like these, Value Over Volume is available now.