🧟 Is self-storage back from the dead?

👋 Hello, Best Ever readers!

In this week’s newsletter, self-storage is back, banks purge debt, apartments get bigger, and Joe Fairless takes on AI.

Today’s edition is presented by Capital Gains Tax Solutions. Selling a property shouldn't mean losing 20-50% to taxes. Let Capital Gains Tax Solutions create your personalized exit plan and calculate your savings today.

👉 Also, if you haven’t heard, the Best Ever Community is now FREE for all qualified investors! Apply here to join. For serious investors only.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

Tariff Turmoil: JPMorgan Chase CEO Jamie Dimon warns that tariffs will likely increase inflation and cause recession — a shift from January when he advised Americans to "get over" tariff concerns. He cautions of stagflation and urges quick resolution, saying negative effects would be hard to reverse.

Out with the Old: Regional banks are purging problematic office loans from the low-rate boom, with bank-held CRE delinquencies dropping to 1.99%, even while CMBS rates rise to 6.57%. Despite quarterly origination growth, lending remains 41% below pre-pandemic levels.

Sales Spike: CRE sales surged 30% YoY to $24.4B in February, with retail transactions doubling to $7.1B and central business district sales jumping 217%. Price performance remained mixed, with hospitality dropping 9% while retail and industrial each gained 5%.

Wash Cycle: The car wash sector is undergoing consolidation with ZIPS' Chapter 11 filing and Whistle Express's $385M acquisition of Take 5's portfolio. Meanwhile, potential reinstatement of 100% bonus depreciation and declining yields create tailwinds for CRE investors.

Silver Rush: Senior housing occupancy climbed to 87.4% in Q1 2025, with a record 621,000 occupied units driven by Baby Boomers and "solo agers." Boston (90.7%) leads all markets, while construction hits its lowest level since 2009, ensuring continued occupancy growth.

🏆 TOP STORY
IS SELF-STORAGE BACK FROM THE DEAD?

After a strong post-pandemic bull run, self-storage demand cooled down in 2024. Investors didn’t seem to notice, as more than 800 properties sold for a total of $3 billion in 2024. Heavy hitters like Prime Group Holdings (which poured in $264M), Carlyle Group ($178M), and Extra Space Storage ($160M) led the charge.

These figures suggest that self-storage isn’t just back — it may have never left.

• Big City, Bigger Demand: Queens, NY, led 2024 in self-storage transaction volume, exceeding $100M, while Brooklyn ranked fourth at $60M, highlighting that dense urban living drives demand and premium valuations.

• Record-Setting Deals: Hines set a record with its $91M acquisition of a 353,000 SF Extra Space Storage facility in Cerritos, CA, while the 51 MSF of storage space sold nationally represented 2% of the country's total inventory.

• Suburban Draw: Investor focus is expanding to commuter-oriented suburbs, demonstrated by Public Storage's $23M acquisition in Manahawkin, NJ (capturing 55% of the city's inventory) and Lee Development Group's purchase of 100% of the Reisterstown, MD, storage market for $17.75M, showing remarkable confidence in suburban growth patterns.

• Pricing Stability: Despite high interest rates creating challenges, the average 2024 sale price settled at $108/SF nationally, with strategic acquisitions in supply-constrained markets commanding significant premiums.

Self-storage momentum hasn't slowed in 2025, either. January alone saw deals close in 49 cities nationwide, with Extra Space Storage grabbing headlines for its $29M Seattle acquisition at a hefty $309/SF while Westport Properties shelled out $387/SF for its Costa Mesa facility.

WHAT IT ALL MEANS

For investors seeking economic shelter in a suddenly turbulent climate, self-storage remains a defensive play with staying power as shrinking living spaces, constant lifestyle transitions, and limited new construction create persistent demand. Institutional players are likely to continue acquiring prime urban locations while strategically targeting suburban facilities where population growth outpaces new supply, leaving value-add opportunities for smaller investors in secondary markets where institutional competition is less intense. 

💰 CAPITAL GAINS TAX SOLUTIONS
A BETTER WAY TO SAVE ON CAPITAL GAINS TAXES

Selling a property shouldn't mean losing 20-50% to capital gains taxes. And while most investors think their only option is the outdated, restrictive 1031 exchange, there is a better way.

Capital Gains Tax Solutions has helped countless investors preserve wealth through deferred sales trusts. With over half a billion dollars in closed trusts across real estate, businesses, and even Bitcoin, their results speak for themselves:

• A San Diego business owner selling for $13M kept an extra 40% by deferring taxes

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• Multiple clients rescued failing 1031 exchanges with Capital Gains Tax Solutions’ specialized exit plans

Don't settle for outdated strategies. The Deferred Sales Trust advantage gives you flexibility, time, and control while allowing your wealth to compound as you slowly pay taxes over time.

But don’t wait! You must act before closing escrow. So, if you have an upcoming sale with at least $1M in proceeds or gains, let Capital Gains Tax Solutions create your personalized exit plan and calculate your savings today.

🏘️ CRE TRENDS
U.S. APARTMENTS ARE GETTING BIGGER

After a decade-long trend of shrinking floor plans, U.S. apartment sizes grew in 2024 to an average of 908 SF, though still below the 930 SF average in 2015, according to RentCafe. Tallahassee and Gainesville, FL, lead with the largest apartments, while Marietta, GA, saw the biggest space gain, adding 100 SF compared to pre-2015 units.

Other key takeaways from the report include:

• By Unit Type: Studios grew by 13 SF to 457 SF, one-bedrooms expanded 6 SF to 735 SF, and two-bedrooms added 4 SF to reach 1,097 SF.

• Three-bedrooms shrink: Bucking the trend, three-bedroom apartments decreased by 15 SF to 1,336 SF.

• Top Markets for Space: Tallahassee (1,130 SF) and Gainesville (1,122 SF) offer the largest apartments nationally, followed by Baton Rouge, Knoxville, and Marietta.

• Smallest Markets: Seattle has the nation's smallest apartments (649 SF), followed by Portland (668 SF).

• Big City Exceptions: While most major metros continue to see shrinking floor plans, San Francisco apartments grew by 59 SF while units in Queens expanded by 39 SF.

• Market Contrasts: Detroit experienced the most significant percentage drop, with new apartments shrinking by 25% to 728 SF.

This reversal signals evolving renter preferences and potential market differentiation opportunities. As square footage emerges as "the new currency" in rental markets, investors are considering both space-focused suburban properties and location-focused urban assets to maximize returns across shifting consumer preferences.

🏘️ DEAL OF THE WEEK
200 UNITS, PROJECTED 30% AAR AND 1.9X EQUITY MULTIPLE

Viking Capital is currently raising funds for this luxurious Class A development in the rapidly growing Phoenix metro of Peoria, AZ.

Here's what they’re doing 👇

🏢 Property Details: Peoria Gateway is a 200-unit Class A multifamily development in Peoria, AZ (Phoenix MSA), featuring 15 three-story buildings with an average unit size of 957 SF and resort-style amenities, including a pool, fitness center, and pickleball court.

💸 Finances: The total project cost is $63.3 million, with $19.4 million in equity needed (currently raising). Financing includes a 70% LTV construction loan with a planned three-year hold period. Investment minimums are $50K for Class B investors (projected 28% AAR and 1.86x multiple) and $500K for the Reserve class (projected 30% AAR and 1.9x multiple), with 1031 exchange options available.

💼 Business Plan: Viking partnered with an experienced developer, the Overland Group, to begin construction in March 2025. Premium unit finishes will command top market rents in Phoenix's growth corridor, with solar panels on parking canopies powering common areas. The development targets Peoria's housing shortage, creating ideal conditions for strong absorption and premium rents.

🏆 Track Record: Viking Capital has acquired $1.02 billion in assets across 30 properties (6,290 units) with a 24% average LP AAR. Overland Group brings nearly 40 years of development experience with a current $400 million pipeline, multiple successful Arizona projects, and strong relationships with Peoria officials and planners.

If you’d like to learn more about Viking Capital and Peoria Gateway, click the button below. And if you have a deal you'd like us to feature, share it with us!

🌎 BEST EVER COMMUNITY
JOIN JOE FAIRLESS FOR A SPECIAL SERIES ON AI IN CRE

Join Joe Fairless LIVE in the Best Ever Community on Friday, April 11, at 1:30 p.m. EST for the first in a special three-part series on how investors are using AI in CRE today. Joe will lead panels of active CRE investors who are leveraging AI to revolutionize their acquisition strategies, raise more capital faster, and streamline the execution of their business plans.

This three-part series is available exclusively in the Best Ever Community, which is now FREE for all qualified investors.

👉 Apply here today to join the community and RSVP to Joe’s AI in CRE series.

🎓 EXPERT RESOURCES
FREE DOCUMENT DOWNLOAD

HOW TO MANAGE YOUR PROPERTY MANAGER

Not all management companies are created equal, so it's essential to establish clear expectations during the interview process before securing a deal. This document will address five FAQs about interacting with and managing the property management company after you've acquired a deal and assumed your position as the asset manager.