☀️ How micro-market math is reshaping Sun Belt underwriting

👋 Hello, Best Ever readers!

In today’s newsletter, comp sets lie to operators, a Super Bowl champ launches a fund, rents slip, capital rebounds, multifamily prices tick up, and much more.

Today’s edition is presented by Real Estate Alpha, Pitch Slam 2026 winner. Many investors are drawn towards investments with aspirational higher returns, without factoring in the true after-tax return. Real Estate Alpha’s 12% fixed annual return becomes an effective 15-19% yield through up to 9 years of tax deferral. This means that investors keep the full 12% every year until their initial investment is returned. Learn more today.

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Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

📉 Rents Retreat: National apartment rents have fallen 1.7% YoY — the steepest annual decline on record — as vacancy rates hit a nine-year high of 7.3% and concessions have climbed to their highest level in over a decade.

💰 Capital Rebound: Global private real estate fundraising has posted its first YoY increase since 2021, reaching $172 billion in 2025 — up 13% — with nearly 90% of capital flowing into opportunistic, value-add, and debt strategies.

📍 Population Shift: U.S. population growth has slowed to its weakest pace since the pandemic, with L.A. County shedding nearly 54,000 residents while Harris County gained 49,000, accelerating a rebalancing toward Sun Belt suburbs and smaller metros.

🏙️ LWP Movement: Live-work-play developments have hit a decade high with 542 completions since 2016 and 69 more expected in 2026, as coworking spaces inside mixed-use buildings have grown 60% since 2022.

🏈 Athlete Capital: Former NFL safety Malcolm Jenkins has launched Pleasant/Rock, a real estate and sports investment firm targeting $500 million by 2028, with a pipeline already exceeding $200 million across workforce housing, multifamily, and sports-adjacent assets.

🏆 TOP STORY
HOW MICRO-MARKET MATH IS RESHAPING UNDERWRITING

Metro-level underwriting in the Sun Belt is no longer just imprecise — it's dangerous. In markets like Austin, Phoenix, Denver, and parts of the Carolinas, assets a few miles apart are producing radically different results despite sharing the same headline story: too much supply.

The divergence is forcing investors and lenders to abandon city-wide assumptions in favor of block-by-block analysis that looks more like retail site selection than traditional multifamily underwriting.

Trailing-12-month multifamily absorption peaked near 785,000 units before decelerating sharply into the mid-300,000 range, even as deliveries remained elevated. Starts are now down 55–60% from peak levels — and 20–25% below 2015 levels — but the overhang of recent construction is still working through the system. Inside that environment, performance is fragmenting within individual metros to a degree not seen in prior cycles.

• The K-Shaped Recovery: A single Sun Belt MSA can now contain two entirely different markets. A well-located core asset may still command premium rent growth and high occupancy while a property five miles away struggles with concessions and sluggish traffic. The differentiators aren't just supply — they include competing lease-up timing on a single corridor, micro-employment nodes, school districts, and shifts in traffic patterns that change effective commute times.

• Metro Averages Are Misleading: Denver is still broadly discussed as an oversupplied market, yet infill submarkets with little new construction over the past four to five years are posting durable demand and pricing power. Investors mapping only those competitive assets whose leasing radius realistically overlaps the subject property — often defined by drive times and natural barriers rather than ZIP codes — are finding meaningful opportunity inside markets the headline data would have them avoid.

• Renewals Tell a Different Story: Institutional owners are seeing renewal rates climb into the mid-60% range, approaching 70% in some submarkets, with renewal rent growth of 4–6% helping offset weaker new-lease trade-outs. That stickiness can sustain a micro-market even when net in-migration cools at the metro level, but only if the subject property is drawing from the right renter pool, defined by employment cluster, wage level, and retention ratios of nearby assets.

Sophisticated operators are also upgrading their survey work. Basic phone calls for occupancy and asking rents are no longer sufficient in a cycle where conditions can shift within a quarter. What's gaining weight in those surveys: the depth and durability of concessions, quality and stage of nearby lease-ups, and the velocity at which concessions burn off once occupancy thresholds are met.

THE BOTTOM LINE

The Sun Belt isn't uninvestable, but it is unforgiving of lazy underwriting. As metro-level absorption numbers continue to obscure submarket-level opportunity, the investors finding deals that pencil are the ones treating every acquisition as its own micro-market case study, regardless of how well they think they know the broader MSA.

🤝 TOGETHER WITH REAL ESTATE ALPHA
DEFER TAXES FOR UP TO 9 YEARS

A 12% return taxed annually is not the same as a 12% return with tax deferral for up to 9 years.

Most investors skip past this. The ones who don’t tend to allocate very differently.

Real Estate Alpha structures distributions as return of capital, deferring taxes for up to 9 years.

The result: a 12% fixed annual return becomes a 15-19% effective yield, depending on your tax bracket. No extra risk or aspirational returns. Just smarter structure that allows you to compound quicker.

Here’s the math: a high-income earner in the 35% bracket receiving 12% distributions taxed annually nets roughly 7.8% after tax, doubling their money in around 9 years. With Real Estate Alpha’s structure, investors who reinvest their distributions can defer taxes for approximately 6 years; those who withdraw distributions stretch that deferral to 8+ years. Either way, the effective yield lands between 15-19%, and the difference in outcome is doubling your money in ~6 years rather than ~9.

Same nominal return. Entirely different result.

Here’s the structure investors are paying attention to:

✅ Protected by Entire Portfolio - Backed by the equity and cash flow of a $75M+ multifamily portfolio ($32.5M operator equity protection, $700,000+/mo cashflow).

✅ 12% Fixed (15-19% Effective) - 12% fixed annual return, tax deferral for up to 9 years, 15-19% effective yield. More cash in your pocket, without the additional risk.

✅ 90-Day Liquidity After Year 1 - No long-term lockups. Need your capital back? 90 days' notice and it's yours.

✅ Preferred Equity Position - You get paid before the operators do.

✅ 10-Year Track Record, 0 Missed Payments - Paid every December 31st, zero misses since day one.

Click the link below for full details and to book a 15-minute discovery call. No pitch, just a real conversation to see if it aligns with your investment strategy. 

This investment round is almost full and closing soon. Accredited investors only.

💰 CRE BY THE NUMBERS
MULTIFAMILY PRICES, NEW SUPPLY, AND MORE

🏠 0.1% 

Multifamily property prices have risen for five consecutive months, posting a 0.1% gain YoY in February — the first annual increase since December 2022. Prices remain 18.3% below their peak but have climbed 13.4% above January 2020 levels.

🏭 6.44% 

Industrial cap rates ended Q4 2025 at 6.44% — up 92 bps from a mid-year low of 5.52% — as a broader loan pipeline reversed earlier compression. Rates now sit roughly 120 bps above 2022 lows, with further yield compression unlikely in 2026.

🏗️ 482M SF 

New supply deliveries across office, retail, and industrial are projected to reach 482M SF in the 12 months ending March 2026 — down 30.9% YoY and on track to hit the lowest quarterly level since 2012, according to CoStar's CCRSI. Net absorption gave back 100.2M SF over the same period.

📩 YOU’RE INVITED
UNLOCK IRA CAPITAL FOR YOUR NEXT RAISE

You've worked hard to build your investor network — but if you're not accepting retirement account capital, you're leaving a significant portion of accredited wealth on the table.

📅 TODAY at 1 pm ET, Equity Trust Directors Kelsey Dineen and Matt Calhoun walk you through exactly how to fix that — live, free, and in under an hour.

You'll learn how to:

• Tap into Traditional & Roth IRAs, SEP/SIMPLE IRAs, and HSAs

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Can’t make it to the live event? Register anyway, and we’ll send you the replay.

🎙️ PODCAST SPOTLIGHT
A VALUE-ADD PLAYBOOK BUILT FOR A TOUGH MARKET

For most operators, the action doesn’t really begin until after close. Units sit vacant while crews mobilize, lease-up lags behind the debt service clock, and the value-add timeline stretches.

Justin Spillers, founder of Real Estate Alpha and recent winner of the Best Ever Conference Pitch Slam, joined Carson Jones on the Carson’s Corner podcast to share how he has engineered a different sequence entirely — one that turns the closing date into a finish line rather than a starting gun.

Spillers builds his entire takeover around a single pre-close move: He negotiates the right to renovate vacant units at his own expense before closing. The seller has no downside. If the deal falls apart, they keep brand-new, turned units. In exchange, Spillers gets a head start. By closing day, units are photographed, virtually staged, and already on the market. Preleases at full market rate are signed before he owns the property.

• The Three-Option Conversation: On takeover, roughly 40% of residents in a typical deal are month-to-month. Spillers meets with each one individually in a fully turned unit and gives them three options: $1,000 to vacate this week, stay at a rent increase of $200–$300 per month for three months before transferring to a turned unit, or transfer immediately at market rate on a new 12-month lease. The split runs roughly a third each way — and the rent bumps follow immediately.

• The Speed Infrastructure: None of this works without the construction system behind it. Spillers runs seven three-man crews turning units in seven days or fewer — all materials pre-kitted, palletized, and delivered the day a tenant moves out. His leasing team runs 35 lead sources generating 150 leads per day. On day eight, a new tenant moves in at full market rate. The entire property stabilizes in 12 months or less while staying above 93% occupancy throughout.

With rents falling and vacancy at its highest level in nearly a decade, the margin for error on value-add deals has shrunk. Operators who can't control their lease-up timeline are absorbing carrying costs at exactly the wrong moment. Spillers' system is margin protection as much as it is operational discipline.

🎙️ Listen to Justin’s full episode on Carson’s Corner here.