🧟 Is the retail apocalypse officially over?

👋 Hello, Best Ever readers!

In today’s newsletter, retail heats up, RealPage settles, renters speak out, the U.S. dollar tanks, and much more.

Today's edition is presented by the Best Ever Conference. Ticket prices for BEC X increase on October 1. Get in on our 10th anniversary celebration at the lowest prices you’ll ever see. Claim your spot.

▶️ Plus, missed our webinar on the energy crisis? Watch the replay to understand why smart investors are moving back into oil and gas and why this sector may be one of the most undervalued places to invest right now.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

☀️ Brighter Days: The Fed's 25 bp rate cut sparked optimism in CRE markets after years of pressure from aggressive rate hikes, though analysts warn inflation concerns and economic uncertainty could limit recovery potential.

💡 Great Expectations: With 63% of renters experiencing bill increases last year, cutting monthly utility costs has become a top priority for 92% when choosing a home. Rising energy costs are driving demand for smart thermostats, efficient appliances, and better communication about energy usage.

🏢 Quality Flight: Office leasing shows strength in key markets as tenants gravitate toward Class A and amenitized properties, with national vacancy at 18.7% and construction starts reaching just 10.7M SF YTD, while trophy assets drive sales value.

🏭 Mid-Size Momentum: Mid-sized industrial leases (50K-100K SF) are sustaining the sector while mega-deals remain absent, with manufacturing demand up 50% YoY and investor appetite for core properties remaining healthy despite limited construction activity.

⚖️ RealPage Deal: RealPage agreed to a first-of-its-kind regulatory settlement with Nevada — a consent decree limiting its AI pricing software to public or aged, aggregated data and requiring $200K in rental aid — though the federal antitrust lawsuit with the DOJ and 10 states continues.

🏆 TOP STORY
THE RETAIL RUSH IS ON. HERE’S WHY.

Investors are rushing back to retail. Driven by a perfect storm of constrained supply, rising demand, and strategic bankruptcies that are creating rent-resetting gold mines, open-air service retail is having a moment.

The numbers explain why. Retail construction represents the smallest pipeline across all property sectors, while demand stays rock-solid. With less than 5M SF breaking ground nationally this year, supply constraints position occupancy and rent growth to outperform other asset classes.

🏬 Strip Centers Have Dethroned Industrial: Open-air shopping centers have outperformed every other private real estate sector over the past two and a half years. This isn't some temporary blip — it's a complete role reversal from the "retail apocalypse" narrative. While retail sales grew 3% annually, new store square footage stayed below 1% growth for over a decade. Meanwhile, the winners — Walmart, Target, and grocery anchors — proved they're bulletproof against e-commerce disruption.

📈 The Cycle Is Crystal Clear: Listed REITs hit bottom in October 2023 and have rallied since. Private real estate followed the same pattern a year later — NCREIF ODCE bottomed in Q3 2024 after seven negative quarters, then posted four straight positive returns. The cycle validates the thesis: last cycle's winners (multifamily and industrial) are giving way to the undervalued plays.

💰 Bankruptcies Are the Real Opportunity: Recent retail failures like Party City and TGI Friday's aren't distress signals — they're upgrade opportunities. With occupancy in the high 90s, these closures let landlords swap weak tenants for stronger ones at significantly higher rents. Thriving retailers desperate for premium space face limited options, enabling landlords to command premium pricing when backfilling spaces.

THE BOTTOM LINE

Retail's transformation from pariah to performance leader reflects how supply discipline has created real opportunities. With construction pipelines constrained, institutional capital flowing back, and rent growth accelerating through strategic tenant upgrades, open-air retail is positioned to maintain momentum as private real estate enters a new growth cycle.

🎉 TOGETHER WITH THE BEST EVER CONFERENCE
FINAL DAYS: PRICES INCREASE OCTOBER 1

⏰ The clock is ticking: Ticket prices for BEC X increase on October 1.

This means that in just a few days, the lowest prices you'll ever see for BEC X will disappear forever.

This is your chance to join our 10th anniversary celebration where 95% of attendees have closed deals in the past nine months, million-dollar relationships form over coffee, and careers are transformed.

Early bird rates end September 30 at midnight. Secure your spot now.

If you already purchased a General Admission ticket to BEC X and would like to upgrade to Conference Plus or VIP, please email [email protected].

💰 CRE BY THE NUMBERS
OFFICE CONSTRUCTION, CAP RATES, AND THE U.S. DOLLAR

🏢 10.7 Million 

Office construction starts reached just 10.7M SF YTD through August, with only 40M SF currently under construction nationwide — less than 1% of total inventory. New deliveries are projected to fall from 19.1M SF in 2025 to under 10M SF by 2026, marking a 77% decline from the 2001 peak of 83.6M SF.

📊 2.25% 

Multifamily cap rates have stabilized after two years of increases, with rent growth expected to rise from 1% to 2.25%-2.5% over the next 12-18 months. Transaction volumes across all asset classes rose 19% YoY in Q2, with competitive bidding keeping prime assets trading at sub-5% cap rates.

🏨 $6 Billion 

NYC's Waldorf Astoria renovation ballooned to a total cost of $6 billion, including the original $1.95 billion purchase, with construction alone exceeding $2 billion and going $1 billion over initial projections. The project transformed the hotel into 375 rooms and 372 condos, with nightly rates starting at $1,500.

💵 -11% 

The U.S. dollar fell 11% in H1, its biggest decline in over 50 years, ending a 15-year bull cycle. Morgan Stanley estimates another 10% decline by year-end 2026 as foreign investors add hedges to $30 trillion in U.S. assets while rate differentials narrow with global peers.

🏘️ DEAL OF THE WEEK
HOW ASH DOUBLED HIS MONEY ON A DEAL NOBODY WANTED

Ash Patel turned investor fear into a $230,000 profit opportunity by purchasing a mixed-use building in Cincinnati that others wouldn't touch.

Here's how he captured the value, as explained on the Best Ever CRE Show 👇

🏢 Property details: Four-unit apartment building with 3,000 SF of commercial space on the ground floor, plus a backyard patio. The building had been closed as a bar/restaurant for two years with a damaged reputation, scaring away potential buyers.

💸 Finances: Ash acquired the property for $150,000 after negotiating down from the initial $165,000 asking price. The building was listed on a business broker's website as a bar/restaurant for sale with real estate included, rather than being marketed as an investment property.

💼 Business plan: The business broker was focused on selling a failed restaurant operation rather than evaluating the underlying real estate.

“So I called the business broker, and he's like, ‘Oh yeah, we're selling, you know, bar, restaurant, all the fixtures,’” Ash says. "And I convinced him that there's no value in the name or the equipment.”

While other investors saw only a failed business with worthless equipment, Ash recognized the property's real estate fundamentals and structured the deal around the land and building rather than the restaurant operations.

🍾 Results: Ash sold the property “as-is” for approximately $300,000, generating a 100% return on his $150,000 investment. His analysis showed that if the building contained only the four residential units, comparable properties were valued around $380,000 ARV — meaning investors essentially got 3,000 SF of commercial space for free due to market fear and mis-marketing.

“If they had marketed this as a four-unit apartment building,” Ash says, “all of you guys would be in a bidding war over it.”

👉 If you have a deal you’d like to share with us, please email us here.

▶️ WATCH THE REPLAY
THE ENERGY OPPORTUNITY MOST INVESTORS ARE MISSING

📰 The headlines push renewable energy, but the reality is different.

In our recent webinar with Aspen Funds, we exposed why years of underinvestment in the energy sector are creating a massive supply gap and unprecedented opportunity for those who understand what's really happening.

Discover why billionaire and institutional investors are positioning themselves in energy assets that provide predictable, contract-backed yield regardless of price swings. Learn how to access these investments without wild risks and why this may be one of the most undervalued sectors right now.