📈 The two comeback stories leading CRE in 2025

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, two surprising sectors lead CRE, scammers be scamming, markets to watch in 2026, “multifamily on steroids,” and much more.

📩 Looking to balance your portfolio beyond real estate? Discover how in our most recent webinar, Diversifying with Algorithmic Trading, where you’ll learn how systematic trading strategies can provide non-correlated returns to complement your CRE investments. Watch the full replay here.

⏰ Also, the hotel block for the Best Ever Conference is filling up fast. To save up to 40%, book your room here today. And if you haven’t secured your ticket yet, lock it in here before prices go up.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🚨 Scammers Scam: The FBI received over 130 real estate scam complaints referencing social media in the first five months of 2025, with losses of $600,000 as fraudsters hijack real apartment listings and steal agents' identities to con prospective renters into paying fake $350 application fees.

💼 Flex Gains: Flex office now represents 2.6% of U.S. office inventory, up from 2.3% last year, as companies adopt "coworking-first" strategies for market entry. Average lease terms fell 37% since 2020 to 77 months, while tertiary markets grew 10% YoY.

🛍️ Sales Surge: Retail CRE sales hit $16.1 billion in Q3, up 43% YoY — the strongest quarterly performance since 2022. Property values rose 3.5% annually, outpacing all other asset classes, while cap rates fell to 6.84% as Sun Belt cities like Dallas, Houston, and Phoenix led absorption.

📉 Deep Cut: U.S. apartment rents fell 0.7% YoY in October — the third consecutive month of annual cuts and the deepest decline since March 2021, according to RealPage. Occupancy dipped to 94.9%, down 60 bps over three months, while tech hubs like San Francisco posted 3%-7% gains.

🏨 Hotel Stagnation: Hotel RevPAR remained flat for the first nine months of 2025, with room rates up just 0.9%. Wyndham reported a 5% RevPAR drop for economy properties while government bookings fell 15%-20% across operators as the shutdown and reduced air traffic pressure demand.

🏆 TOP STORY
THE TWO COMEBACK STORIES LEADING CRE IN 2025

CRE dealmaking stalled in 2025 — except in two sectors everyone had written off. While overall transaction volume grew just 5% through Q3, office and open-air retail are staging unexpected comebacks as investors hunt for quality and discounts.

The overall dollar value of CRE deals has barely budged YoY, according to Moody's data tracking the top 50 U.S. property sales. After momentum coming out of the pandemic, transactions have stalled well below pre-COVID levels as economic uncertainty keeps capital on the sidelines.

The reality is that the market isn't frozen — it's splitting:

• Flight to $100M+: Large deal volume surged 35% in Q3 vs. 2024, while smaller transactions remain flat or declining.

• Deal Size Growing: The average September deal hit $12.7 million, up from $11.2 million over the prior two years.

• Quality Wins: Of the top 50 September deals, 29 exceeded $100 million, attracting capital from sovereign wealth funds and institutional investors.

The Office Revival: Tech giants led the charge in September with Apple acquiring a Sunnyvale office portfolio for $365 million and Nvidia purchasing a Santa Clara building for $83 million. MetLife scooped up a Newport Beach office property at a 39% discount. The deep discounts are drawing strategic buyers back, with large corporations consolidating real estate holdings at bargain prices. Microsoft recently executed a similar strategy in Seattle.

Open-air Retail’s Comeback: Nuveen, Tanger, InvenTrust Properties, and MCB Real Estate collectively poured nearly $500 million into retail properties in September, mostly strip centers anchored by restaurants and essential services. Buyers are targeting assets trading far below replacement cost that offer resilient, essential retail demand.

The Hotel Crash: The only sector posting significant declines was hospitality, with deal value down 30% in September compared to last year. Reduced international and business travel, combined with companies cutting travel budgets, has lenders and investors avoiding the sector entirely.

THE BOTTOM LINE

The CRE market is splitting between haves and have-nots. High-quality assets over $100 million are trading briskly as investors deploy capital selectively, while smaller deals stagnate. Office and retail — both left for dead — are attracting strategic buyers betting on deep discounts and essential locations. Hotels, meanwhile, can't find a bid.

▶️ GET THE REPLAY
HOW ALGORITHMIC TRADING PERFORMS WHEN THE MARKETS DON’T

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What you’ll get out of this replay:

✅ True portfolio diversification: Why systematic currency trading shows zero correlation to traditional markets.

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✅ Critical red flags: The transparency issues and fee structures that signal potential scams.

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💰 CRE TRENDS
TOP MARKETS TO WATCH IN 2026

Dallas/Fort Worth seems to be winning everything these days, and now it has claimed the top spot in the 2026 Markets to Watch rankings. The annual Emerging Trends in Real Estate survey asks industry participants to rate 81 U.S. markets for investment and development prospects across property types, combining those ratings into an overall real estate prospects score.

The 2026 average rose to 2.81 on a five-point scale — up from 2.75 for 2025 — signaling improving confidence across real estate.

Here’s what’s happening regionally:

• Southeast Holding Strong: Miami ranked third overall, with the region posting the highest average score (2.90) and claiming the most spots in the top 20. Tallahassee surged 36 places, while Raleigh/Durham, Orlando, and Charlotte lead projections for job growth.

• Northeast Ascending: Ten of 15 markets gained ground, led by the greater NYC area. Brooklyn, Northern New Jersey, Manhattan, and Jersey City all cracked the top 10. Portland, Maine, jumped 28 spots from the bottom of last year's rankings.

• South Central Is Led by Texas: Dallas/Fort Worth, Houston (No. 5), and Nashville (No. 6) cluster near the top with strong retail and industrial fundamentals. Austin notably dropped from No. 15 to No. 30.

• The Wobbling West: This region posted the lowest average score (2.68), with only Phoenix (No. 10) and Orange County (No. 18) in the top 20. San Francisco and San Jose rebounded 20-plus spots after hitting bottom in 2025.

• Midwest Lagging: Detroit remains the only regional market in the top 20, though Chicago moved up 11 spots. Minneapolis/St. Paul and Cincinnati both dropped significantly.

These rankings reflect a flight to quality among investors. Primary Markets—defined as metros with 3 million or more jobs—scored highest at 3.08, with over half ranking in the top 20. Transaction data supports this trend: deals over $100 million were up 35% while smaller transactions remain flat or declining.

👉 You can view the full list here.

🎉 BEST EVER CONFERENCE
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🎙️ THE BEST EVER CRE SHOW
WHY ASSISTED LIVING IS ‘MULTIFAMILY ON STEROIDS’

Vinney Chopra calls assisted living "multifamily on steroids," and the numbers back it up. He joined Matt Faircloth on the Best Ever CRE Show this week to break down how he's built a billion-dollar portfolio targeting America's aging population.

While a typical apartment unit generates around $1,500 in monthly rent, Chopra converts single-family homes into residential assisted living facilities that house 10 seniors — each paying $5,000 per month. That's $50,000 in monthly revenue from one property.

Here's a case study of one of his properties in Punta Gorda, which shows how the model works at scale:

• The Build: Built a 94-unit facility on seven acres for $12 million with amenities including swimming pools, putting greens, and restaurant-style dining.

• The Opening: Opened with 45 residents on day one (50% occupancy immediately).

• The Pipeline: Had 70 seniors on the waitlist with deposits already placed.

• The Exit: Sold the property for $17 million, generating $5 million in profit plus operational cash flow during the hold.

For multifamily investors looking to enter the space, Chopra outlined two paths: Convert existing single-family homes into residential assisted living (10 bedrooms housing 10 seniors), or build new facilities from scratch.

• Location: Properties need proximity to hospitals, and municipalities regulate how close facilities can be to competitors. Feasibility studies run around $7,500 and analyze local demand, senior net worth, and competitive supply.

• Operations: Requires professional staff, including 24-hour caregivers, chefs, exercise directors, and business officers. Payroll represents the largest expense.

• Management: Third-party companies will operate facilities for 3-4% of revenue for investors who don't want to handle operations directly.

By 2031, 74 million Americans will need assistance with daily living activities like bathing, cooking, and medication management. And with 10,000 baby boomers turning 65 each day, Chopra's renter pool is only growing as demand for assisted living beds continues to outpace supply.

🎙️ Listen to Vinney's full episode here.