🏗️ Modular is having its multifamily moment

👋 Happy Sunday, Best Ever readers! Chipotle announced this week its new drone delivery service, Zipotle, which drops your burrito (or bowl) from the sky to your doorstep in minutes. We’re officially living in the future. 🌯

In today’s newsletter, modular is having a moment, cap rates peak, cuts are coming (allegedly), and STRs crush it in college.

🕵‍♀️ But first … join us on September 2 at 2 pm EST for Fund Administration Demystified — an expert session designed for GPs who want to master fund operations complexities. Save your seat here.

🎓 Also, ICYMI: Last week’s virtual book publishing workshop was an absolute hit. If you missed it, you can download the full replay here. You won’t regret it.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

⛰️ Cap Rate Peak: All-property cap rates declined 9 bps in H1 despite Treasury volatility. Most CBRE survey respondents believe cap rates have peaked as property types moved in unison for the first time in many surveys, signaling a new period of yield compression.

✂️ Cut Coming?: Fed Chair Jerome Powell revived September rate cut talk at the annual central bank summit this week, saying policy changes may be needed due to economic uncertainty from tariffs and immigration changes, sending real estate stocks up more than 2%.

🏗️ Forecast Update: Yardi Matrix has raised apartment completion forecasts through 2027 despite fewer projects under construction, expecting 547,779 units in 2025 and 430,061 in 2026, though market-rate deliveries will drop 60% in 2026 versus 2024.

📊 Regulation Impact: Housing regulations — including source-of-income protections, eviction restrictions, and resident screening laws — drive up rents by 1.5% to 6.3%, adding $252 to $1,224 per unit annually, with lower-income households and small buildings experiencing the largest increases, according to new research.

🏥 MOB Mentality: Medical office building sales totaled $3.5 billion in H1, down 19% from last year — but prices per square foot rose 9% with off-campus properties commanding $351 PSF as investment yields held steady around 7%.

🏆 TOP STORY
MODULAR IS HAVING ITS MULTIFAMILY MOMENT

Modular construction made up 5.1% of total U.S. construction in 2024 with modular accounting for nearly 9% of apartment starts last year. Now, a new bipartisan bill could accelerate adoption even further. The Renewing Opportunity in the American Dream to Housing Act, currently under Senate review, aims to eliminate outdated lending standards and public confusion that have held back factory-built construction. 

The momentum is building across multiple fronts:

• Major players are committing: Greystar debuted its first modular project late last year and has six more in the pipeline, reporting 40% faster completion, 90% less waste, and 10% lower costs.

• Economics are compelling: Ginosko Modular's build costs run about $73 psf — half the price of conventional apartment construction — while indoor production eliminates weather delays that typically cut building seasons in half.

• Technology is advancing: Resia uses robotics for quality control and to reduce reliance on scarce skilled labor, serving middle-income renters like teachers and first responders through standardized, uniform room designs.

• Market projections show growth: The Modular Building Institute projects multifamily modular will grow from $7.1 billion in 2024 to $11.3 billion in 2029, a 4.7% annual clip.

• Legislative support is emerging: Senator Tim Scott's ROAD to Housing Act directs HUD to examine federal financing standards, particularly addressing upfront funding requirements and clarifying definitions between "modular" and "manufactured" housing.

The biggest obstacle isn't cost or quality, it's perception and risk aversion from builders and lenders who prefer traditional methods. High-profile failures like Katerra's $2 billion collapse in 2021 still create reputational headwinds, but companies like Resia are positioning themselves as proof-of-concept pioneers planning to sell modular components to other developers starting in 2026.

THE BOTTOM LINE

Modular construction is transitioning from niche to mainstream, driven by labor shortages and cost pressures. Improved technology, major player adoption, and potential federal support suggest this 9% market share is just the beginning. Early adopters may gain competitive advantages as the industry scales, though success depends on execution and overcoming stigma from past failures.

🕵‍♀️ YOU’RE INVITED!
FUND ADMINISTRATION DEMYSTIFIED: WHAT EVERY GP SHOULD KNOW

😫 Tired of losing LP trust because of messy distributions? Stressed about compliance requirements you don't understand? Wondering when it's time to stop managing everything yourself?

On September 2 at 2 pm EST, we're hosting a FREE live session with Perry Zheng, founder and CEO of Cash Flow Portal, specifically for GPs who want to master the art of fund operations. With the takeaways from this session, you can:

🏢 Know exactly when fund administration becomes necessary

💰 Build LP trust through bulletproof investor allocations

📈 Master compliance requirements without the headaches

⚡ Slash operational errors and save hours with tech integration

Perry is the lead GP for 1,020+ apartment units and $25M+ in capital raises, generating 30%+ annualized returns for investors. He'll show you how to build efficient, scalable fund administration processes that strengthen LP relationships and free up your time to focus on deals.

This session is completely free and packed with insights. Can't make it to the live event? Register anyway, and we'll send you the replay 🚀

🗺️ ON THE MAP
COLLEGE FOOTBALL MARKETS WHERE STRs CRUSH

College football is back, and for short-term rental investors, it means the return of reliable bookings and premium weekend rates. BiggerPockets ranked the top 10 STR markets for college football, combining revenue data, yield potential, occupancy rates, and football program strength to identify where investors can capitalize on game day bookings that turn fall Saturdays into serious cash flow opportunities.

Here are the Top 10, highlighted by revenue, percentage yield, average daily rate, and occupancy:

10. Baton Rouge, LA (LSU): $28,616 revenue | 12.5% yield | $196 ADR | 40% occupancy

9. Bloomington, IN (Indiana): $35,019 revenue | 11% yield | $246 ADR | 39% occupancy

8. Minneapolis, MN (Minnesota): $41,084 revenue | 12.2% yield | $191 ADR | 56% occupancy

7. Athens, GA (Georgia): $45,409 revenue | 13.4% yield | $265 ADR | 47% occupancy

6. Columbus, OH (Ohio State): $36,652 revenue | 14.3% yield | $192 ADR | 52% occupancy

5. Louisville, KY (Louisville): $39,628 revenue | 15.6% yield | $231 ADR | 47% occupancy

4. Waco, TX (Baylor): $34,924 revenue | 17.7% yield | $203 ADR | 47% occupancy

3. Champaign, IL (Illinois): $37,139 revenue | 16.1% yield | $184 ADR | 55% occupancy

2. Tuscaloosa, AL (Alabama): $48,672 revenue | 21% yield | $381 ADR | 35% occupancy

1. Columbia, SC (South Carolina): $36,935 revenue | 16.2% yield | $182 ADR | 56% occupancy

College football towns offer a unique investment opportunity where passionate fan bases drive predictable demand spikes. You can view the full list, along with honorable mentions outside the Top 10, here.

🎙️ THE BEST EVER CRE SHOW
HOW TO EXECUTE A ‘HOSTILE TAKEOVER’ IN CRE

While most CRE investors view litigation attorneys as a necessary evil — someone you call when deals go sideways — a growing number of sophisticated operators are using litigation not just for defensive damage control, but as an offensive acquisition tool.

Chris Zona, litigation attorney at Mandelbaum Barrett PC, joined Matt Faircloth on the Best Ever CRE Show this week to discuss this strategy — how it’s deployed, why it works now, and how investors can capitalize.

The concept is elegantly aggressive, Zona explains: Purchase non-performing commercial loans (NPLs) at steep discounts (typically 40-65% of par value), then use litigation to enforce loan covenants and ultimately acquire the underlying properties through foreclosure credit bidding.

Banks and secondary lenders are aggressively de-risking, Zona says, creating abundant NPL opportunities. When you own the debt, you can credit bid the full loan amount at auction while maintaining your discounted cost basis — essentially allowing you to "swing above your weight" in competitive markets.

Zona’s investment thesis:

• Entry Barrier: Requires $10M+ capital and existing CRE experience

• Timeline: 12-18 months typical hold period through foreclosure process

• Exit Options: Foreclose and flip, workout with borrower, or convert to performing asset

• Target Returns: 25-40% spreads between acquisition and exit

While private equity dominates nine-figure NPL portfolios, the middle market ($5-15 million deals) remains underserved — creating opportunities for nimble investors willing to embrace complexity for superior returns. The question isn't whether distressed debt opportunities exist—it's whether you're sophisticated enough to capitalize on them.

🎙️ Listen to Chris’s full episode here.

▶️ WATCH THE REPLAY
BECOME THE GO-TO CRE EXPERT IN YOUR MARKET

"This is so good, love what you're sharing! I just finished writing my first book and am set to launch, but with what you're sharing, you guys could really help me grow my business. I'm already thinking ahead to more books. I'm going to book a call!" 

That's what one attendee said during our virtual book publishing workshop this week alongside Chandler Bolt of selfpublishing.com.

Learn Chandler's proven strategies for creating your book in a single weekend without writing a word yourself and turning it into a 7-figure revenue engine. Whether you want to differentiate yourself from other GPs, attract high-net-worth investors, or command higher fees, this replay contains the roadmap you need to position yourself as the go-to authority in your market.