🔑 Inside multifamily's historic retention surge

👋 Hello, Best Ever readers!

In today’s newsletter, renters settle, pickleball lifts MOBs, lending rebounds, units get bigger, caps rise, and much more.

Today’s edition is presented by AI for CRE Collective. AI is moving fast across commercial real estate. The hard part is knowing where to start and which tools are worth your time. The AI for CRE Collective brings together 800+ brokers, investors, developers, owners, lenders, asset managers, and property managers using AI to underwrite deals, build BOVs and OMs, research markets, analyze sites, abstract leases, and automate repetitive work. Learn more.

🎤 Pitch Slam is back. And now it’s LIVE every month. On August 26, watch four CRE operators pitch real deals to active fund managers and RIAs, then become the eighth judge and cast your own Pursue or Pass vote. Reserve your free seat.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

⚖️ Zillow Trial: Zillow and Rocket's Redfin face the FTC and five state attorneys general in a Virginia courtroom on Aug. 24, less than two weeks out. Regulators say the $100 million deal pushed Redfin out of apartment listings entirely and locked it out of competing for nine years.

💵 Lending Rebound: Commercial and multifamily originations rose 16% YoY in Q2 and 12% from Q1, the second straight quarter of recovery. Retail led all property types at 61% and office jumped 47%, while GSE volume fell 17% and life insurer originations dropped 27%.

⚽ Free Kick: U.S. hotels are forecast to close 2026 with RevPAR up 4.4% as ADR growth reaches 3.1%, ahead of expectations. World Cup host markets saw occupancy slip as corporate groups steered clear, and the 104 matches generated $3.9 billion in room revenue against FIFA's $11.3 billion claim.

📦 Bulk Advantage: Construction of 1M SF-plus logistics facilities has fallen nearly 70% from its 2022 peak, down to 43M SF from 137M SF. Vacancy in those buildings has dropped 196 bps since Q4 2024, making them the only size cohort below its 20-year average.

🥒 Pickle Driven: Pickleball injuries rose 88% between 2020 and 2022, and 91% of them involved players 50 and older. Medical outpatient buildings absorbing that volume hit record 92.7% occupancy in Q4 2025, with physical therapy and rehabilitation among the fastest-growing outpatient service lines.

🏆 TOP STORY
INSIDE MULTIFAMILY'S HISTORIC RETENTION SURGE

Two-thirds of American renters now say a mortgage is out of reach. That is a story about stalled wealth-building and a generation renting deep into the years their parents spent building equity. It has also created a renter who has given up on an American Dream that keeps drifting further away, and who happens to be exactly the resident multifamily operators want: one who stays.

Renters now put their odds of moving within three years at 37%, down from roughly 57% in 2014. Homeowners slipped from 21% to 14% over the same period. Renters started out far more mobile and gave up much more ground.

• Homeownership Is the Driver: Renters now put their chance of ever buying a home at 34.7%, down from 52.7% in 2015. Roughly 44% say getting a mortgage would be very difficult, and close to 69% say it would be difficult in some form. The renters who feel priced out are the ones planning to stay.

• Rent Rolls Already Show It: Resident retention is approaching an all-time high, according to RealPage. Sun Belt REIT MAA held turnover to 39.6% last quarter, with home purchases behind only 10.9% of move-outs. Coastal REIT Equity Residential renewed 60%, and Sun Belt/Midwest owner IRT retained 60.5% in Q1.

• Pricing Power Cuts Both Ways: MAA raised renewal pricing 5.2% in Q2 while new lease pricing fell 5.3%. That 1,050-bps spread rewards operators who keep residents in place and punishes the ones who push a renewal hard enough to send someone shopping in a soft market.

Intent is not the same as action, but the Fed treats moving expectations as an early signal rather than a lagging one. Rental housing economist Jay Parsons sees the trend as contentment rather than entrapment. Renters are taking renewal increases of 3% to 5%, close to the 5.2% RealPage logged across major REIT portfolios in Q2, when many of them could find a better deal by moving. They stay because the apartment is comfortably affordable, while buying a house is not.

THE BOTTOM LINE

Two-year turn assumptions no longer match how long residents actually stay. Operators using those numbers are overstating make-ready costs and undervaluing interior capex that a resident will use for five years. Re-cut turn budgets against trailing renewal rates, price renewals against the cost of an empty unit instead of a market comp, and watch the ceiling on increases. Retention is holding up NOI while new lease pricing runs negative, and pushing too hard on renewals gives that advantage right back.

🤝 TOGETHER WITH AI FOR CRE COLLECTIVE
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Start free for 7 days and get full access. Bring one task that is eating your time, find the workflow built for it, and use the community or office hours when you get stuck.

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🎤 BEST EVER PITCH SLAM
PITCH SLAM IS BACK. NOW LIVE EVERY MONTH.

If you’ve been to the Best Ever Conference, you know Pitch Slam. Now, we’re bringing one of our most popular events to you LIVE every month.

On August 26 at 12 PM ET, four CRE operators will pitch real investment opportunities to a panel of seven active fund managers and RIAs looking to place $10M+ in capital.

Each contender gets 4 minutes to pitch + 5 minutes of Q&A, followed by a Pursue or Pass vote.

And you’re not just watching. The audience is the eighth judge. 

Cast your vote alongside the panel and help decide who becomes the first monthly Pitch Slam Champion.

💰 CRE BY THE NUMBERS
BIGGER UNITS, BUSY MALLS, RISING CAPS, AND MORE

📐 910 SF

New apartments averaged 910 SF in 2025, up 13 SF from 2024 and reversing a decade of shrinking floor plans that bottomed at 882 SF in 2022. Three-bedrooms drove most of the gain, adding 28 SF to reach 1,355 SF. Tallahassee led the nation at 1,156 SF while Seattle came in smallest at 645 SF, down 47 SF from a decade ago.

Wide Gap: Frisco, TX, and St. Petersburg, FL, each added 55 SF since 2016. Arlington, TX, went the other direction, shedding 287 SF per unit as developers shifted toward higher-density floor plans.

🛍️ 5.1%

Open-air shopping center traffic rose 5.1% YoY in July, leading all three formats, with indoor malls up 4.3% and outlets returning to positive territory at 0.5%. Dwell time increased across every format after falling YoY from February through June, a reversal that points to shoppers browsing rather than running errands, and to more room for cross-shopping heading into back-to-school and holiday.

📈 11-Year High

Apartment cap rates reached an 11-year high in Q2, the highest quarterly average since Q3 2015 and 114 bps above the 4.64% trough of Q2 2022. Volume held at $36.7 billion, within 1% of a year ago, but it took 7.4% fewer properties and 9.7% fewer units to get there. Apartments still clear tighter than any other major property type, which explains why capital keeps competing for them even after the repricing.

Mix Shift: Mid-rise and high-rise product captured 51.8% of dollar volume, outselling garden communities for the first time since tracking began in 2001. 

🏢 14%

Office vacancy dipped just below 14% in Q2, 30 bps under its mid-2025 peak. Total inventory shrank 7M SF over the past year as demolitions hit record highs and the construction pipeline sat near 50M SF, matching the 2011 cycle low. Net absorption reached 17M SF over the past 12 months, only the second sustained positive stretch since 2020, though CoStar expects that to slow to 13M SF this year and 5M SF in 2027.

🔑 1.4%

Apartment rent growth is forecast to reach 1.4% in Q3, a 70-bps upward revision from CoStar's prior outlook, with the Q4 projection raised from 0.5% to 1.9%. National vacancy is expected to peak at 8.2% by year-end before easing to 8.1% in 2027. CoStar credits stronger employment assumptions and faster-than-expected absorption of the inventory built up across 2024 and 2025.

🎙️ THE BEST EVER CRE SHOW
WHY EVEN GOOD DEALS ARE GETTING GHOSTED

The pitch that raised eight figures in 2021 gets ghosted in 2026, from the same investor, even with a better basis. The math hasn't changed. The investor has. They've seen more deals go sideways in recent years, and they've learned that in this new era of CRE, the sponsor is the variable that matters as much — if not more — than the deal.

This week on the Best Ever CRE Show, Pat Zingarella joined Ash Patel and Amanda Cruise to explain what that shift has done to the capital raise. Zingarella runs a directory where verified investors review the sponsors they have backed, which gives him a read on where deals stall. His finding is that sponsors are not losing prospects at the top of the funnel. They are losing them at the wire.

• Interest Was Never the Problem: Nobody Zingarella talks to reports weaker lead flow. The breakdown happens at the end of the funnel. Sponsors who respond by spending more on marketing are buying traffic that stalls in the same place, and paying more for every dollar they raise.

• Every Pitch Sounds the Same: Sponsors calling this a generational buying opportunity are using the language investors heard in 2021 and 2022. To an LP with no reliable way to separate one sponsor from another, conviction reads as noise.

• Diligence Moved to the Operator: Investors now treat the decision as a bet on the team running the property. Underwriting the deal is the easy part. The harder question is whether this group holds an asset together through a bad stretch.

Sponsors are being measured against a comparison set they never see. It is built from every prior deal that disappointed and every operator who went quiet when things turned. Zingarella's own data points to the same thing: the investors who write the harshest reviews rarely lead with the loss. They lead with the silence that preceded it. 

What closes that gap is a record of how a sponsor communicates when a deal goes wrong, and most of that gets built long before a raise opens.

👉 Listen to Pat’s full episode here.