📣 Renters have spoken. Will operators listen?

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, renters speak, fraud surges, cap rates diverge, Ash raises $3 million in 20 days, and much more.

⏰ 48 hours left to join us for Apartments 101, a free training where you'll learn Michael Blank's proven system to close your first apartment deal in 180 days without years of experience or deep pockets. Save your spot now!

🤖 Also … watch the replay of The AI Investor Magnet and see exactly how Marcin Drozdz uses AI to attract investors on autopilot (the same system behind nine figures raised). Get instant access.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🚨 Fraud Alert: Leasing fraud has surged as property managers in one market report half of applicants flagged for provable fraud, with AI-enabled scammers fabricating documents and stealing identities. As a result, honest renters face stricter screening, higher fees, and more opaque application processes.

📋 Appraisal Crisis: The appraisal industry faces an existential threat as automated valuation models gain traction and the median appraiser age hits 60. Leadership organizations battle lawsuits over testing deficiencies and alleged misconduct while struggling to attract younger professionals into the field.

🏚️ Vintage Return: Older multifamily properties dominate 2025 deals, with traded assets skewing 30+ years older than inventory in 38 metros as investors favor smaller, pre-1970 buildings that offer lower equity requirements and competitive Fannie/Freddie financing. 

⚖️ Algorithm Ban: New York has become the second state to ban landlords from using AI algorithms to fix rent prices, following Connecticut and several major cities. RealPage still faces DOJ scrutiny, while federal legislation could preempt local regulations for ten years.

🏭 Industrial Turn: Prologis reports a clear turning point in industrial leasing with a record 65.6M SF of leases commencing in Q3 and 19.6M SF in new deals, up 15% quarterly. The REIT boosted its development forecast by $500 million and secured 5.2 gigawatts of data center power capacity.

🏆 TOP STORY
RENTERS HAVE SPOKEN. WILL OPERATORS LISTEN?

Renters know what they want, and they're willing to pay for it.

A national survey of 2,342 prospective renters reveals a widening gap between renter preferences and available supply. The study shows that 46% of renters plan to increase their budgets when they move to secure larger spaces and premium amenities. Only 20% plan to seek lower rents, and just 17% are firmly committed to renewing their current leases.

🗣️ Translation: Renters are ready to spend more, but the product has to align with what they actually want. The problem is, it doesn’t. Here are the numbers on the supply-demand mismatch:

• Studios: 4% demand vs. 12% supply (300% oversupply)

• One-bedrooms: 21% demand vs. 41% supply (195% oversupply)

• Two-bedrooms: 52% demand vs. 39% supply (33% undersupply)

• Three-bedrooms: 23% demand vs. 8% supply (288% undersupply)

This gap is expected to widen over the next 36 months as work arrangements reshape demand.

• Among employed renters, 54% work fully in-office, 33% are hybrid, and 13% are fully remote.

• Remote and hybrid workers are driving higher rent premiums — they want more space and are willing to pay for it.

• Texas and the Southwest have the highest percentage of fully in-office renters at 63%, while the Mid-Atlantic leads in remote workers at 18%.

Younger, economically mobile renters are most willing to explore alternatives. Two-thirds are open to build-to-rent townhomes and single-family rentals, and they're more likely to consider longer-distance moves and non-traditional lease terms. Despite economic uncertainty — 43% think the economy is headed in the right direction while 39% say it's on the wrong track — renters are still willing to trade up for a better product.

THE BOTTOM LINE

Renters are signaling exactly what they want and showing willingness to pay premium rents for larger units with the right features. Developers and owners who can deliver two and three-bedroom units aligned with post-pandemic preferences have a clear opportunity to outperform. The question isn't whether demand exists — it's whether supply will catch up.

🗺️ ON THE MAP
THE 200-BP GAP RESHAPING MULTIFAMILY PRICING

Multifamily cap rates span a 200-bp range across the top 30 U.S. markets, revealing stark differences in how investors are pricing risk. The San Francisco Peninsula posts the lowest cap rate at 3.88% — implying a 26-year breakeven — while Fort Lauderdale sits at the opposite end at 6.27%, or a 16-year payback period.

A deeper look at cap rates reveals:

• Average Cap Rate: 5.04% across 929 deals totaling $41 billion through September in the top 30 markets.

• Recent Trajectory: Cap rates bottomed at 4.1% in 2021, climbed to 5.2% by 2023, plateaued in 2024, then compressed modestly in early 2025.

• Volume Leader: Phoenix led with $3.3 billion in multifamily sales through September.

• Buyer Shift: REITs doubled their market share from 3% of purchases in 2023 to 6% in H1 2025, while private investors account for just over half.

• Seller Landscape: Opportunistic sellers have shrunk to a "puddle." Most properties hitting the market face specific pressures like stabilization challenges, loan maturities, or defaults.

Investment volume is up modestly from last year despite tariff uncertainty, elevated debt costs, and a weakening job market. Most market participants expect cap rates to stay flat through year-end, though more anticipate further compression than increases.

The wide cap rate spread reflects divergent pricing across markets. Lower rates in tech-heavy, high-income areas signal investor confidence in rent growth and stability, while higher rates in other markets show buyers demanding premium yields for perceived risks. For buyers, the challenge is distinguishing genuine value from markets that are simply pricing in optimism.

🏘️ YOU’RE INVITED!
FREE TRAINING: YOUR FIRST DEAL IN 180 DAYS

Flipping? Single-family rentals? Time to scale up. Join us alongside Michael Blank for a free training - Apartments 101 - and discover how to lock in your first apartment deal without years of experience or millions in capital.

In this 30-minute session, you’ll learn:

• Why multifamily beats every other real estate strategy

• The economics of profitable apartment deals

• How syndications work (and how to use them)

• Two myths holding you back from your first deal

• Three tactics to close in 6 months

🎙️ THE BEST EVER CRE SHOW
HE RAISED $3 MILLION IN 20 DAYS. HERE’S HOW.

Ash Patel went on a rant this week on the Best Ever CRE Show, and amidst discussing thought leadership, building trust, and scaling capital raising, he slipped in a pro tip that has helped him save tens of thousands of dollars.

📣 "We did individual syndications for years, and each one cost between $10,000 and $15,000,” he says. “It was such a pain in the [butt] because these lawyers are just recycling the same paperwork.”

Ash’s Solution: While many operators face a binary choice between individual syndications and blind pool funds, Ash found a third option — a customizable fund structure that costs roughly $20,000 to set up once. Unlike traditional evergreen funds, where investor capital sits idle, Ash's customizable fund treats each property as an individual syndication under a unified legal umbrella.

Why Ash loves it:

• Speed: “If we get a deal today, we can onboard it in 10 minutes and start raising capital,” Ash says. His team recently raised $3 million in just 20 days using this approach.

• Cost Savings: The initial investment replaces $10,000-$15,000 in legal fees for each syndication.

• Streamlined Operations: “The fund umbrella has done all the legal work, and all your subsequent deals are very easy to onboard,” Ash says. “The cost is minimal for onboarding additional deals.”

Perhaps most valuable is the simplified compliance process, particularly for multi-state investors. These fund companies, according to Ash, also do all the initial and annual filing, as well as set up Reg D exemption and blue sky filings. For teams managing deals across multiple states, this administrative streamlining alone can justify the upfront investment in a customizable fund structure that provides both deal-by-deal flexibility and institutional-grade infrastructure.

🎙️ For more on this strategy, and more, listen to Ash's full episode here.

▶️ WATCH THE REPLAY
THE AI INVESTOR MAGNET

The AI revolution in CRE is here, and it's changing how top operators build their investor pipelines. Watch how Marcin Drozdz uses an AI-powered system to attract and nurture thousands of leads into dozens of committed investors every month.

In this free session, you'll discover:

✔️ The AI tech stack that identifies high-potential investors before they're actively looking

✔️ Automated workflows that build trust and credibility on autopilot

✔️ The "Investor Attraction Algorithm" that scores and qualifies leads by capacity

✔️ Real case studies: How newcomers closed seven figures in their first 90 days

✔️ Why this system works in any market condition or deal type