💵 The war on junk fees just got real

👋 Hello, Best Ever readers!

In today’s newsletter, the war on junk fees gets real, fraud ramps up, apartments shrink, and states push for tax reform.

Today's edition is presented by Aspen Funds. Aspen is targeting 29% cash-on-cash returns by investing in producing wells and proven drilling projects in its latest energy fund, with a reduced $100,000 minimum for Best Ever readers. Learn more today.

🎉 Also, General Admission is now live for Best Ever Conference X — our 10th anniversary celebration in Salt Lake City, Feb 18-20. Early bird pricing ends October 1, so secure your spot today for our biggest CRE event ever.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🚩 Fraud Alert: Multifamily mortgage fraud hit 1 in 27 applications as loan volume jumped 43% YoY, with 2-4 unit properties leading fraud indicators despite risk percentages dropping 2% amid market volatility and elevated purchase activity.

🆘 Housing Emergency: The Trump administration may declare a national housing emergency this fall to combat rising costs through permitting reforms and construction standardization, with Treasury Secretary Scott Bessent calling for "all hands on deck" action as the 2026 midterms approach.

🏘️ Little Big Risks: Small multifamily buildings (2-4 units) posted the highest mortgage delinquency rates at 2.02% in Q1 2025, outpacing single-family homes at 1.55% despite dropping from last year's 15.20% peak as these "missing middle" properties face structural vulnerabilities.

🏭 Industrial Momentum: Industrial investment sales surged 15% YoY to $33.8 billion in H1 2025 despite vacancy climbing to 5.6% from 4.1% in mid-2022, as institutional buyers deploy capital betting on reshoring and e-commerce demand despite sluggish 1.8% rent growth.

🛒 Retail Rally: Retail transaction volume jumped 18% YoY as prices rose in 13 of 15 subsectors, led by bars/restaurants (+42.2%) and automotive (+25.4%). Multifamily and office continued leading total dollar volume despite falling property counts.

🏆 TOP STORY
THE WAR ON JUNK FEES JUST GOT REAL

Multifamily rental fees have created a transparency crisis, with states taking action to force operators to disclose the true cost of leasing upfront. What started with Minnesota's pioneering legislation has spread nationwide, as regulators respond to tenant frustration over discovering additional charges — pest control, trash pickup, internet service, parking, and pet fees — only at lease signing.

The problem stems from how apartments are marketed versus what tenants actually pay. A quoted lease rate typically represents just the starting point, with the final monthly cost including numerous add-ons that can make previously affordable units suddenly out of reach for budget-conscious renters. This fee structure mirrors transparency issues that sparked consumer backlash in hospitality, travel, and ticketing industries — and, like in those industries, consumers are speaking up.

The industry response varies by approach:

• Technology Solutions: Companies like Engrain have developed digital fee calculators allowing renters to plug in optional services and see total costs upfront, though state-specific regulations add complexity to implementation.

• Operator Adaptation: Multifamily companies are experimenting with clearer fee presentation on their websites and through listing platforms like Apartments.com and Zillow.

• Regulatory Compliance: State restrictions now include caps on pet rent and limits on fees as percentages of base rent, requiring operators to navigate constantly shifting rules.

• Political Uncertainty: Federal initiatives targeting rental fees could change depending on political shifts in Washington, making state-level action the more reliable regulatory trend.

The stakes extend beyond consumer satisfaction. For operators, transparency offers protection against backlash over surprise costs, while for regulators, rental fee disclosure has become a test case for how far transparency requirements should extend across industries.

THE BOTTOM LINE

Fee transparency is reshaping multifamily operations as states force upfront cost disclosure. Operators who proactively adopt clear pricing structures may gain competitive advantages, while those clinging to fee-heavy models risk regulatory scrutiny and tenant backlash. The trend signals a fundamental shift toward honest pricing that mirrors consumer protection efforts across other industries, making transparency a business necessity rather than an optional practice.

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💰 CRE BY THE NUMBERS
APARTMENTS SHRINK, STORAGE BENEFITS, AND MORE

📦 547 Million 

Shrinking apartment sizes (down 30-75 SF since the early 2000s) and rising rentership have driven Americans to search for storage 3.3 million times monthly online, up 14% YoY. Over 547M SF of self-storage were added in the past decade, with Texas metros leading both apartment and storage growth nationwide.

📈 5.8% 

Harrisburg led secondary apartment markets with 5.8% annual rent growth, according to RealPage data, followed by Syracuse at 5.7%. In total, 11 smaller markets posted increases above 3.5% while the national average declined 0.1%. Seven of the 11 top-performing markets were in the Northeast region.

🏢 59.8 Million 

New data shows coworking space totals 59.8M SF across 7,833 locations nationwide, representing 2% of total office inventory. Manhattan leads with 7.5M SF, while Chicago tops market share at 2.5% of its office stock, followed by Los Angeles at 2.3%.

🏦 $710 Million 

Texas CRE foreclosures hit $710 million in September, up from $670 million in August, with multifamily properties from 2022-2023 loans dominating distressed assets. Houston leads with $350 million in CRE debt across 10 properties as repeat foreclosure notices signal prolonged borrower distress.

🎓 BEST EVER CONFERENCE X
GENERAL ADMISSION TICKETS NOW AVAILABLE

To celebrate 10 incredible years, we're throwing the ultimate CRE event. Best Ever Conference X (February 18-20, Salt Lake City) will be the biggest, most epic party we’ve ever hosted.

What Makes BEC X Special:

✅ Expanded Programming with more speakers and opportunities
✅ Exclusive 10th Anniversary Sessions featuring industry legends
✅ Enhanced Networking formats designed to maximize deal-making
✅ Biggest Speaker Lineup of the most influential voices in CRE

At just $695 (regularly $995), this is the absolute lowest price you'll see. Ever.

Plus: Conference Plus and VIP upgrades will be offered FIRST to early bird ticket holders. Miss this window, and you might miss your chance at the premium experience.

⌛ PRICING WILL INCREASE OCTOBER 1

🗺️ ON THE MAP
EIGHT STATES PUSHING FOR PROPERTY TAX REFORM

Property taxes are out of control, having surged nearly 30% nationwide over the last five years, cutting cash flow for investors and pushing homeowners toward financial distress. Now, some states are considering repeals and reforms.

Here’s what’s going on in select states:

• Florida proposes eliminating property taxes entirely, replacing them with sales tax through a constitutional amendment.

• Idaho has enacted $100 million in property tax relief after a March Senate vote.

• Illinois is considering tax cuts for homeowners who have lived in their properties for 30 or more years.

• Kansas has proposed a citizens' board to evaluate tax exemptions, though the measure is currently stalled.

• Montana has shifted the property tax burden from primary residences to high-value vacation homes.

• North Dakota has tripled its primary residence tax credit, with the governor seeking total elimination using oil revenue.

• Pennsylvania's House Bill 900 proposes potential property tax elimination by 2030.

• Tennessee voters will decide in November on a constitutional amendment banning property taxes.

Lower property taxes directly boost investor cash flow, though reforms primarily target owner-occupants. Investors should challenge assessments routinely, as 30-60% of properties are overassessed nationally, yet fewer than 5% of taxpayers appeal their assessments despite frequent partial victories. Still, these are states to keep an eye on.

📚 EXPERT RESOURCES
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