🌀 Trump cuts could trigger CRE crisis. Here's how.

👋 Happy Sunday, Best Ever readers! It’s June 1, which means we’re 41.6% of the way through 2025. Time moves fast.

In today’s newsletter, NOAA cuts threaten insurance premiums, apartment sales surge, multifamily permits migrate, cost seg power rankings, and more.

Today’s weekend edition is presented by RSN Property Group, known for conservative real estate strategies that protect and grow capital. Explore their newest asset, Alessia Gardens, before final allocations close.

Also, join Pascal Wagner for our next FREE live webinar, The 3-Step Buy Box: How to Build a $100K/Year Passive Income Portfolio, on Thursday, June 12 at 7 pm EST.

👉 Register now to save your seat.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

Apartment Sales Surge: Apartment sales volume jumped 20% YoY to $9.2 billion in April despite economic turbulence. Mid- and high-rise sales surged 50% to $4 billion, while portfolio deals skyrocketed 267% to $2.3 billion, offsetting a 2% decline in single-property sales.

Rent Leaders: The Midwest leads U.S. rent growth at 3.6% annually as of April 2025, well above the national average of 1%. The region has shed its "slow and steady" reputation, outpacing national trends with consistent growth.

Storage Kings: The top 100 self-storage companies control 52% of the U.S. market with roughly 1 BSF of rentable space. Five companies dominate 35.5% of national inventory, with U-Haul leading new construction at 3.5 MSF planned for 2025.

Jobs Report: San Francisco Bay Area metros posted job losses for the year-ending April 2025, along with several Midwest cities like St. Louis and Kansas City. The top 10 job-creating markets added 347,400 jobs, down 24.1% from last year, with New York leading at 81,000 positions.

Absorption Update: Only 49% of newly built apartments completed in Q4 2024 were rented within three months, the fifth straight quarter below 50%. Record completions of 125,000 units are keeping rents down and boosting renter negotiating power, with 3+ bedroom units leading absorption at 53%.

🏆 TOP STORY
NOAA STOPPAGE COULD TRIGGER INSURANCE CRISIS

Just as we enter hurricane season, the National Oceanic and Atmospheric Administration (NOAA) has announced it will stop tracking extreme weather costs. Normally, NOAA news wouldn't concern CRE investors, but this move could severely disrupt commercial property insurance markets. 

Following the Trump administration's firing of over 800 NOAA employees and proposed $1.5 billion budget cut, the agency ended its 55-year program that tracked billion-dollar disasters. Commercial property insurers have relied on this federal data for decades to assess risk and price coverage. 

Here’s how it could cost CRE investors:

• Modeling for the Worst: Without reliable federal data, insurers will likely "model for the worst," driving up premiums and reducing available capacity. This could occur within the next 30-60 days.

• Passing the Buck: Insurers may invest heavily in costly private research to replace NOAA data, with expenses ultimately passed to policyholders, who are already facing 10% annual premium increases since 2017.

• Data Blindness: Loss of NOAA data hampers computer modeling systems that help brokers evaluate property vulnerabilities and plan disaster preparedness, leaving property owners less equipped to mitigate hurricane damage.

THE BOTTOM LINE

As hurricane season arrives and with the NOAA predicting an active year, the threat of rising insurance costs and deteriorating risk assessment capabilities is very real. The recent five-year average (2020-2024) of billion-dollar disaster events is 23.0, more than double the historical average. And after decades of relying on federal weather data to model catastrophic risks, insurers are now largely on their own, meaning property owners should immediately review insurance strategies and budget for significantly higher coverage costs.

🏘️ TOGETHER WITH RSN PROPERTY GROUP
DAY ONE CASH FLOW WITHOUT UNNECESSARY RISK

As a busy professional, you deserve investments that grow your wealth without keeping you up at night.

That’s exactly what RSN Property Group has designed with Alessia Gardens, a Core-Plus multifamily deal that sits lower on the risk spectrum than heavy value-add projects, while still delivering strong projected average annual returns of over 18%.

Located in Gainesville, GA, this 126-unit asset is being acquired at a 32% discount to recent comps and is already generating stable day-one cash flow. With a fixed-rate agency loan, low leverage, and light-touch renovations, Alessia Gardens is intentionally structured to be as conservative and durable as possible in today’s uncertain market.

For investors seeking dependable income and long-term growth without taking on unnecessary risk, this is a smart place to be.

💰 CRE TRENDS
THE MULTIFAMILY PERMIT LANDSCAPE IS SHIFTING

The latest Census Bureau data reveals divergent trends in multifamily permitting, with some markets surging while others decline significantly.

• Leaders: New York, Dallas, Houston, and Austin maintain top positions

• Strongest Growth: Orlando (+4,351 units), Columbus (+22% or 1,431 units), Chicago (+2,240 units)

• Major Declines: Austin (-7,910 units), Phoenix (-5,891 units), Los Angeles and Washington DC (both -4,000+ units)

• Converging Markets: Austin, Orlando, Phoenix, and Atlanta clustered around 11,400-12,300 units despite different trajectories

Fourteen markets experienced decreases of 1,000+ units, including Miami, Tampa, Denver, Minneapolis-St. Paul, Jacksonville, and Seattle. Meanwhile, smaller markets like Anaheim, Fayetteville-Springdale-Rogers, and Des Moines posted notable gains.

These mixed signals suggest a shifting development landscape, with traditional powerhouse markets cooling while secondary cities gain momentum — trends developers and investors should monitor closely.

🎙️ BEST EVER PODCAST
BONUS DEPRECIATION POWER RANKINGS BY ASSET CLASS

Not all CRE assets are created equal. Isaac Weinberger from Madison Specs joined us on the Best Ever CRE Show this week to discuss cost segregation, breaking down each asset class along the way. "Every asset class essentially is eligible for bonus depreciation,” Isaac said, “but there are asset classes that are more advantageous than others.”

Here is Isaac’s definitive ranking of CRE assets by bonus depreciation potential:

1. Car Washes and Gas Stations: Nearly 100% of qualifying assets can be depreciated. These properties contain extensive components that the IRS classifies as 15-year assets rather than structural.

2. Mobile Home Parks: 70-80% of qualifying assets, especially when the park owns the homes rather than tenants. The mobile homes themselves are considered non-structural components.

3. Hotels: High returns due to extensive FF&E (furniture, fixtures, equipment), plus amenities like pools, tennis courts, and pickleball courts that qualify as 15-year land improvements.

4. Garden-Style Multifamily: Strong performance driven by non-structural components within units (countertops, flooring, kitchen equipment) plus parking lots and landscaping.

5. Retail Strip Centers: Particularly effective for large centers with substantial parking lots and specialized equipment. Parking lots are major contributors as 15-year components.

6. Medical Office and Office Buildings: Moderate returns, falling between retail and industrial properties in terms of non-structural components.

7. Self-Storage and Industrial: 8-17% of qualifying assets due to their "hollow" nature with fewer non-structural elements, though specialized equipment like warehouse freezers can boost results.

While bonus depreciation dropped to 40% in 2025 as part of its scheduled deceleration, the Trump Administration plans to restore 100% bonus depreciation as part of its proposed “Big Beautiful Bill,” re-establishing it as a cornerstone of investor tax strategy.

"Ultimately, I believe [the Big Beautiful Bill] will pass because the more tax advantages there are for commercial real estate investors, the more incentivized they are to buy more real estate,” Isaac said. “It gets the banks rolling. It gets loans being lent out. And ultimately, it's just really oiling the machine. So, ultimately, it's in the government's best interest to make this happen."

🎙️ Listen to Isaac’s full episode here.

🎓 BEST EVER RESOURCES
PASSIVE INVESTOR TIPS

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