🦸‍♂️ Has the office sector found its saviors?

👋 Happy Sunday, Best Ever readers! If you’re caught in the path of this winter storm, please stay warm and stay safe 🙏 

In today’s newsletter, office finds new capital, insurers take heat, MOBs face tailwinds, niches thrive, and much more.

Today’s edition is presented by Tribevest. Capital raising is becoming more structured, regulated, and professionalized — and sponsors who adapt early gain a real advantage. Learn how experienced Lead Sponsors are building compliant, scalable capital programs by joining the waitlist for the Institute for Structured Capital.

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Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

☂️ Insurance Uproar: New York and other states are considering profit caps on insurers after companies like reported record profits — as high as 26% to $6.3 billion — while homeowners faced premium hikes, some more than doubling.

💵 Straight Cash: Multifamily lenders have shifted from perpetual rent growth assumptions to discounted cash flow models as NOI performance diverges sharply across the sector, with 41% of securitized loans showing flat or negative growth.

🏢 Lending’s RTO: Office lending nearly doubled to $46 billion in 2025 as banks returned to the market, but 70% of new loan originations targeted trophy assets in gateway markets like NYC and Silicon Valley while D.C. and Phoenix saw pullbacks.

🌍 European Exodus: European investors have pulled back from U.S. CRE amid geopolitical concerns around Trump policies — Greenland rhetoric, tariff threats, Fed independence questions — pivoting capital deployment to Europe instead.

💚 C-PACE Surge: C-PACE lending posted record deals in 2025 as more states adopt the tool for energy efficiency and resilience upgrades. Cumulative lending reached $10 billion in 2024, with growth accelerating as other lending remains tight.

🏆 TOP STORY
HAS THE OFFICE SECTOR FOUND ITS SAVIORS?

There's a new breed of real estate mogul emerging from Washington D.C.'s troubled office market. Private buyers with flexible capital and no investment committees slowing them down are claiming deals that institutional investors dominated for decades.

Private investors claimed 33% of capital allocated to D.C. office buildings in 2025, more than double their 14% share in 2020. The shift comes as office values have contracted sharply and lenders finally accept reality, creating opportunities institutions can't justify but private capital sees as asymmetric bets. D.C. office buildings traded for an average of $172 PSF in 2025, down 41% from $294 PSF in 2019. That reset is unlocking deals across the market.

• Lenders Taking Losses: D.C. saw 43 office-building trades in 2025, more than any year since the pandemic. The uptick follows years of "extend and pretend" as lenders refused to crystallize losses. Lenders holding distressed office assets have concluded they're not equipped to be landlords and are selling at major discounts rather than continuing deferrals.

• Basis Reset Value: Buildings purchased at steep discounts can support fresh capital investment without legacy debt burdens. New owners are renovating properties, offering competitive tenant improvement allowances, and hiring brokers to fill vacancies — investments the previous capital structure couldn't support. Properties often appreciate immediately after closing simply because new owners can transact and deploy capital.

• Speed Advantage: Private buyers investing for wealthy families or individuals can close all-cash, make decisions quickly, and pursue opportunities outside traditional underwriting parameters. One buyer acquired a 305K SF building all-cash after purchasing the distressed loan at a massive discount. Another paid roughly $180 PSF for a nearly 200K SF building — a deal that pencils at the new basis but wouldn't have worked at legacy pricing.

• Competition Heating Up: Early movers faced limited competition, but more buyers are entering the market as the reset gains momentum. Longtime local players have ramped up acquisitions alongside new entrants buying distressed senior loans and converting them to ownership.

What's happening in D.C. isn't unique — it's a blueprint for how distressed office markets nationwide will likely reset. Secondary markets experiencing similar institutional retreat and pricing compression could see the same dynamic: private capital with speed and flexibility buying at a deeply discounted basis, lenders accepting reality, and a new ownership class emerging from the wreckage.

THE BOTTOM LINE

The office recovery won't be led by institutions that dominated the sector for decades. It will be driven by private investors comfortable with uncertainty, willing to move fast, and positioned to reset the basis low enough that fresh capital and improved operations can create value again. For investors watching other distressed office markets, D.C. is showing how the cycle resets.

🤝 TOGETHER WITH TRIBEVEST
BUILDING THE NEXT STANDARD FOR CAPITAL RAISING

As more sponsors work with capital partners and Independent Capital Aggregators (ICAs), structure and compliance are no longer optional — they’re foundational.

✍️ The Institute for Structured Capital is a new education initiative designed for experienced real estate sponsors who want to move beyond one-off raises and build durable, repeatable capital programs. Through practical frameworks, real-world examples, and infrastructure-first thinking, the Institute helps sponsors understand how to structure Fund-of-Funds programs, work responsibly with ICAs, and scale capital raising without increasing risk.

If you’re focused on doing more deals — and doing them the right way — this is where it starts.

👇 Join the Institute for Structured Capital waitlist.

💰 CRE TRENDS
MOB SUPPLY CRUNCH DRIVING RENT GROWTH IN 2026

Medical office building construction is pulling back sharply as healthcare providers face policy uncertainty and elevated development costs, creating a supply squeeze that will push rents to record highs this year.

MOB construction completions are projected to drop 26% in 2026 to the lowest level in over a decade, reducing occupier options. On-campus hospital facilities will contract even further as healthcare systems grow less willing to assume development risk amid uncertain U.S. healthcare policy and higher land and construction costs.

• Vacancy Stabilizing: MOB vacancy will hold within its typical 9.5-10.5% band as limited new supply supports fundamentals.

• Record Rents: Average MOB rent is projected to climb to an all-time high in 2026, with rent growth accelerating to 1.4% from 0.9% in 2025. Select markets in the South and West will see the strongest gains.

• Cost Efficiency Push: Healthcare occupiers are increasingly focusing on real estate for savings as industry cost pressures persist, pursuing lower-cost delivery options, including conversions of obsolete office and retail buildings. Financially strong healthcare systems will continue leasing build-to-suit MOBs with long-term commitments.

The ongoing industry pivot toward outpatient care, combined with low vacancies, will sustain rent growth momentum through 2026. Low supply, rising rents, and a structural shift toward outpatient care — MOBs are one of the few CRE sectors with genuine tailwinds in 2026.

📩 YOU’RE INVITED
6-FIGURE GROWTH WITH A TEDx TALK | FREE WEBINAR

The best deals don't go to the hardest workers—they go to the most trusted operators.

When you've built real authority in the market, everything shifts. Capital chases you. Terms improve. Exclusive opportunities surface before they hit the open market. You stop selling and start selecting.

📆 Join us January 28 at 12 pm ET for this free webinar with Nate Hambrick of Leadr to discover how platforms like TEDx can become your most powerful business development tool.

In this session, you'll learn how to:

✅ Establish Instant Credibility — Leverage high-profile speaking platforms like TEDx to position yourself as the expert investors want to back

✅ Accelerate Investor Relationships — Cut months off the traditional trust-building process by converting public recognition into private conversations

✅ Attract Capital Instead of Chasing It — Build a reputation that brings pre-qualified investors and off-market deals directly to you

✅ Secure Better Terms Consistently — Use strategic authority-building to lower your cost of capital and create long-term partnership advantages

Can't make it to the live event? Register anyway, and we'll send you the replay.

🎙️ THE BEST EVER CRE SHOW
THE TRUTH ABOUT NICHE INVESTMENTS

The highest returns in CRE aren't coming from where they used to. They’re being found in the niches. Ben Lapidus, founder of Playground and co-founder of the Best Ever Conference, joined John Chang on the Best Ever CRE Show this week to discuss why operators attacking specialized opportunities are producing 30-40% IRRs while traditional value-add multifamily groups struggle to find deals that pencil.

The shift reflects a fundamental market reality: When 2,000 operators are competing for the same deals using the same playbook, margins compress. The operators generating outsized returns today have identified plays where competition is minimal and structural advantages create pricing gaps that won't disappear overnight.

🎲 The Garage Condo Play: Ben's targeting industrial garage condos — think climate-controlled man caves where buyers store collector cars, boats, or workshops — and selling them to individual owners for personal enjoyment rather than investors buying on a cap rate. That approach unlocks a 10-15% sales premium by arbitraging commercial construction costs against residential-style pricing for personal-use buyers. 

• The Result: 30% IRRs in a market most operators don't even know exists. "I seek to be a category of one," Ben explains. "I want to be able to describe what I do as unique enough that nobody else can do it the way that I'm describing it."

🧠 The Information Edge: Traditional multifamily operators and larger groups in conventional asset classes all have access to the same public data — CoStar, Yardi, the standard sources everyone uses. When publicly available data doesn't exist, operators who invest time gathering local intelligence gain massive advantages. 

• The Edge: It’s not operational excellence — it's knowing something the market hasn't priced in yet.

🤝 The Partnership Piece: Ben spotted an opportunity in garage condos and dove in headfirst, gathering proprietary market intelligence by doing the boots-on-the-ground work most operators won't. He then partnered with a 23-year condo conversion veteran to cover his knowledge and experience gaps.

• The Payoff: An institutional investor recognized the marriage of complementary skills and committed to the entire first allocation, valuing the sum of the partnership’s parts and market timing over a perfect track record match.

LPs burned by the downturn are increasingly focused on whether operators have identified genuine opportunities rather than counting years of experience in a specific asset class. In a market where the old playbooks aren't working, the ability to spot what others miss has become the most valuable skill. Right now, that skill is paying off in the niches many aren’t watching.

🎙️ Listen to Ben's full episode here.

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