💰 Trump opens $12.5 trillion market to CRE

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, Trump opens a $12.5 trillion market to CRE, supply peaks (and resets), expenses ease, renters show their hands, and much more.

Today's edition is presented by the NNN Fast Track Course with Ash Patel and Matt Faircloth. In this five-module course, you’ll learn how to invest where your tenants pay the taxes, insurance, and repairs … and you collect checks.

🎓 Enroll today.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏗️ Supply Peak: Apartment completions hit 536,000 units in Q2, according to RealPage, below the all-time high from two quarters ago. This marks the first time annual inventory growth has fallen QoQ by more than 20 bps in 15 years.

🔨 …and a Supply Reset: Total construction spending declined 0.3% in May, marking the ninth consecutive monthly decrease, creating opportunity for investors as reduced competition from new development offers modest tailwinds for income-oriented strategies positioning for the next cycle phase.

📉 Expense Ease: Multifamily expense growth slowed dramatically to just 1.3% for market-rate properties in early 2025, but rent growth remained muted at 0.7% YoY as elevated supply and affordability concerns prevented operators from raising rents aggressively.

🛒 Retail Rally: Retail investment sales jumped 22% YoY in Q2, with values rising across all timeframes. It was the only property type showing growth MoM, quarterly, and annually, while $100 million-plus deals signal growing institutional interest.

💻 Industrial Opportunity: Trump's planned 100% semiconductor tariffs exempt companies building in America, potentially driving massive industrial demand as chipmakers like TSMC expand U.S. factories to avoid levies while accessing the $52.7 billion federal subsidy program.

🏆 TOP STORY
TRUMP OPENS $12.5 TRILLION 401(K) MARKET TO CRE

President Trump signed an executive order this week directing federal agencies to expand 401(k) investment options to include private equity, real estate, and cryptocurrencies. The Labor Department now has 180 days to review existing rules and clarify fiduciary responsibilities for plan administrators offering alternative investments.

The move comes as public markets shrink. The number of publicly listed U.S. companies has dropped sharply since the 1990s, while private equity assets have more than doubled in the past decade. Many institutional investors like pension funds and endowments have already reached their internal limits for alternative investments, making the massive 401(k) market an attractive new frontier.

The push came from both private equity firms and cryptocurrency advocates looking to integrate digital assets into the financial system.

WHAT IT MEANS FOR LIMITED PARTNERS

More Opportunity: For the first time, ordinary workers could access private real estate investments through their employer retirement plans, democratizing what was previously limited to accredited investors. This opens diversification opportunities beyond traditional stocks and bonds, with private real estate historically offering higher returns than public REITs. In short: The LP pool is about to get much deeper.

The Challenge: Due diligence promises to be a significant hurdle for 401(k) participants, as most lack the sophistication to evaluate complex real estate deals and will rely heavily on plan administrators to vet opportunities. Another critical concern is liquidity mismatch, as private real estate typically requires longer hold periods, which could create problems for retirement savers needing access to funds.

AND FOR SPONSORS…

More Money: Sponsors will suddenly have access to a potentially massive new capital pool. Even if just 5-10% of 401(k) assets flow into alternatives, that represents $600 billion to $1.25 trillion in new investment capacity, and it comes at a time when capital has been historically difficult to come by. Combine this with the $350 billion in dry powder expected to be deployed in H2, and we could see a capital infusion unlike any we've seen.

The Challenge: This opportunity comes with requirements to develop new fund structures specifically designed for retirement accounts, including appropriate liquidity features and fee structures that meet fiduciary standards. Sponsors will also face intensified competition as more capital chases quality deals, potentially driving up asset prices and compressing returns. The fallout here could shake up the industry permanently.

THE BOTTOM LINE

This move could either unleash a tidal wave of retirement cash into CRE or become another regulatory false start. Time will tell. For sponsors, the real tell will be watching plan administrators squirm over fiduciary liability. Mark your calendar for the Labor Department's 180-day review and subsequent SEC moves, as these aren't just bureaucratic milestones — they're potential market makers. In a world where borrowing costs refuse to cooperate, having a massive new equity spigot could be exactly what sponsors need to keep deals alive.

🎓 EXPERT RESOURCES
A CRE MASTERCLASS WITH ASH PATEL & MATT FAIRCLOTH

NNN FAST TRACK COURSE

Are you tired of getting outbid on 5% cash-on-cash multifamily deals? Managing tenants, repairs, and property managers? Feeling stuck because every “good” asset is overpriced or picked over?

This course gives you a new lane — NNN (Triple Net) commercial real estate — where your tenants pay the taxes, insurance, and repairs … and you collect checks.

In 5 modules, you’ll learn directly from Ash Patel, who’s closed dozens of NNN deals across the country, and Matt Faircloth, a veteran multifamily operator who knows how you think and asks the questions you may have.

NNN Fast Track gives you:

✅ 5 video modules with downloadable worksheets and assets
✅ Real deal walkthroughs with actual returns
✅ Ash's underwriting tools and proven call scripts
✅ Lifetime access to Best Ever CRE Community with a private space for NNN Fast Track students and direct access to Matt Faircloth and Ash Patel

🗺️ ON THE MAP
D.C. TOPS SEARCH RANKINGS AS SMALLER CITIES SURGE

Peak rental season has delivered some surprises in renter engagement, with Washington D.C. generating the most renter interest while smaller cities make serious moves up the charts, according to RentCafe data. 

With a methodology measuring apartment availability, listing views, favorites, and saved searches, D.C leads all markets while Kansas City and Cincinnati claim second and third, bumping last year's leader, Minneapolis, to fourth. But the real story is in the dramatic jumps. Amarillo, TX, skyrocketed 132 positions while Las Vegas climbed 86 spots, proving renters are looking beyond the usual suspects.

The South is still king, grabbing 14 of the top 30 spots, while the Midwest is close behind with 10 entries of its own. The West managed a respectable showing, while the Northeast is barely represented, suggesting that affordability is trumping proximity to traditional job centers in today's rental hunt.

Here’s the Top 30:

1. Washington, D.C. (+5 vs. H1 2024 ranking)

2. Kansas City, MO (+70)

3. Cincinnati, OH (+10)

4. Minneapolis, MN (-3)

5. Atlanta, GA (-2)

6. Chicago, IL (+9)

7. Los Angeles, CA (+44)

8. Philadelphia, PA (+1)

9. Las Vegas, NV (+86)

10. St. Paul, MN (+24)

11. Columbus, OH (+31)

12. Cleveland, OH (-8)

13. Overland Park, KS (-11)

14. Grand Rapids, MI (+44)

15. Amarillo, TX (+132)

16. Long Beach, CA (+37)

17. New Orleans, LA (+74)

18. Louisville, KY (+2)

19. Portland, OR (+2)

20. Fort Lauderdale, FL (+41)

21. Augusta, GA (+50)

22. Montgomery, AL (+26)

23. Orlando, FL (-15)

24. Columbus, GA (+44)

25. San Jose, CA (-2)

26. Chesapeake, VA (+10)

27. Sacramento, CA (-11)

28. Little Rock, AR (+2)

29. Richmond, VA (-19)

30. Virginia Beach, VA (+58)

👉 View the full national breakdown here.

🎙️ THE BEST EVER CRE SHOW
THE TRUTH ABOUT RATE CUTS, AND WHAT TO EXPECT

While 91% of bond traders are betting on Fed rate cuts this September, economist John Chang from Marcus & Millichap isn't buying the hype. In today’s episode of The Horizon on the Best Ever CRE Show, Chang shares his contrarian take, discussing why he thinks the central bank might surprise everyone by holding rates steady, and why CRE investors should prepare for the possibility that borrowing costs could actually rise.

The Fed's Impossible Choice: The Fed has a dual mandate to keep inflation at 2% while maximizing employment. The problem? These objectives are now pulling in opposite directions.

• Recent inflation readings tell the story. The CPI has jumped 40 bps to 2.7% since April, while the PCE has climbed to 2.6%. Meanwhile, job creation has cratered to a trailing three-month average of just 35,000 new positions. "We have two responsibilities that are moving in opposite directions," Chang says.

The Treasury Tsunami: While everyone's fixated on potential rate cuts, Chang points to a massive supply issue brewing in the bond market. The Treasury Department plans to issue roughly $1 trillion in new debt during Q3, followed by another $600 billion in Q4.

• The Fed isn't buying these bonds like they used to, and international buyers have largely stepped away. With more supply and fewer buyers, basic economics suggests upward pressure on rates.

Even if the Fed does cut rates, it might not matter for CRE financing. We could see Fed cuts coinciding with rising borrowing costs, which happened as recently as last September. So, according to Chang, at 4.2% for the 10-year treasury, current rates might look attractive in hindsight. "Reach out to your mortgage lender,” he says. “Now might be a very good time to get that deal done."

🎙️ Listen to the full episode here.

📷 EXPERT RESOURCES
EXCLUSIVE REPLAY: NOW AVAILABLE

CASH FLOW, TAX BENEFITS, AND MARKET OPPORTUNITIES

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