🔮 What to expect from CRE in 2025

👋 Hello, Best Ever readers!

In this week’s newsletter, the next CRE cycle begins, Greystar goes modular, mobile home parks keep crushing, and one market’s median rents hit $25,000 (not a typo).

Today’s edition is brought to you by the all-new Best Ever Community, an exclusive, private network for serious investors only. The community is now open for new members, and only a select group will be admitted.

🚨 Don’t miss out: Join the waitlist today to see if you qualify.

Let’s CRE!

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CRE HEADLINES

🏗️ Greystar Goes Modular: Greystar is launching its first U.S. modular housing development — a 312-unit complex near Pittsburgh — with six more projects planned nationwide as part of a strategic shift to avoid traditional building delays.

📈 Multifamily Surge: Apartment sales rose 18% YOY in October to $11 billion, fueled by growing investor confidence that multifamily is on the verge of recovery. Total volume, however, was still 35% below the five-year average for a prepandemic October.

🏠 House Hunters: A new Redfin survey of potential movers reveals safety/crime (17.5%) and climate risks (13.7%) are now major motivators for relocation, outranking traditional factors like property taxes, family changes, and school quality. 

📉 Manufacturing Slowdown: U.S. manufacturing activity contracted for the eighth consecutive month in November. However, it shows signs of stabilization, as it improved slightly from October and outpaced November projections while new orders rebounded after seven months of decline.

🎙️ Deep Dive: Best Ever host Amanda Cruise purchased a 42-pad mobile home park in North Carolina with a $1.3 million asking price, but she secured it for $650,000 after discovering discrepancies in reported occupancy and rents. She broke down the whole deal this week on The Best Ever CRE Show.

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HOW THE NEXT CRE CYCLE COULD CHANGE EVERYTHING

U.S. real estate is on the verge of a new cycle in 2025. But with interest rates down from their peaks and economic uncertainties easing, new risks on the horizon promise to make this new cycle drastically different from those past. 

Higher-for-longer rates will likely temper appreciation compared to previous cycles, and while capital flow into real estate is expected to increase in 2025, the rising tide may not lift all boats. According to LaSalle’s 2025 outlook, cycles will vary across sectors and markets. 

There are several themes that will influence investors’ decision-making in 2025. Despite recent rate cuts, uncertainty around long-term interest rates rose in Q4 2024 in the election’s wake, and persistent inflation fears will dominate 2025. LaSalle’s report cautions that this next cycle’s early gains likely won't match that of previous cycles, and transaction volume is expected to grow slowly as some sellers hold out for better values in 2026.

Here’s how this could impact key CRE sectors:

• Multifamily will continue to grapple with oversupply throughout 2025, a lingering effect from the 2021-22 market peak, with recovery not expected until 2026. This will obviously be market-dependent, which we discussed in last week’s newsletter.

• Industrial prospects look favorable for 2025 as supply concerns ease, with growth driven by continued e-commerce expansion and increased domestic manufacturing investment.

• Retail continues to rebound, with limited new construction enhancing existing centers' value, particularly in growth markets. While rent growth remains moderate, some segments offer attractive entry yields.

• Office is … well, office. The sector continues to face headwinds from remote work, though economic growth is expected to eventually offset this impact. Investment focus remains on high-quality properties and emerging suburban markets as the sector's investability improves, while office-to-residential conversions continue to steal inventory.

WHAT IT ALL MEANS

Transaction volumes will continue recovering slowly in 2025, though both seller appetite and buyer capital will likely remain below average. Returns will be driven primarily by income rather than appreciation, and while 2025 promises to be a pivotal year for nearly every sector with socioeconomic tides impacting each in drastically different ways, expect 2025 to buck historical trends and serve as investors’ introduction to a brave new CRE world.

_{🎟️ BEST EVER CONFERENCE}
TOP 5 REASONS TO ATTEND BEC IX

Still haven’t purchased your ticket to the Best Ever Conference in March? Here are the top five (of many) reasons to secure your spot TODAY:

• The networking is 🔥 : 95% of BEC attendees have been involved in at least one CRE deal in the past nine months, and those in attendance represent over $50 billion in assets under management and $400 million of unplaced capital.

• Access to the Greatest Minds in CRE: BEC IX will feature Jay Parsons, David Osborn, Joe Fairless, John Chang, and so many more speakers who will share their knowledge with those who choose to attend.

• A HUGE Opportunity for LPs: Are you an accredited limited partner? Grab our BRAND NEW accredited limited partner general admission ticket exclusively for a 25% discount compared to regular general admission.

• Six New Workshops: For the first time ever, we are offering six new workshops that will give you intimate and detailed access to different niches and players in CRE.

• FREE Entry to the Best Ever Community: Our brand-new, exclusive digital community provides unrivaled access to top CRE experts and year-round networking events. For serious investors only.

Bonus Reason No. 6: Get 15% off your BEC ticket THIS WEEK ONLY. Click below, and use promo code blackfriday15 at checkout to get our lowest prices of the year.

_{💰 CRE TRENDS}
MOST EXPENSIVE RENTAL MARKETS IN THE U.S.

Thought the rents were good in your market? Try these…

Fisher Island, FL — the 33109 zip code — topped RentHop’s recent list of the most expensive zip codes in the country. The median one-bedroom rent is a whopping $20,000, while two-bedrooms are going for $25,000 per month on average.

Florida boasts 15 of the list’s 100 most expensive zip codes, with Park Shore and Naples also cracking the top 10. New York features 44 zip codes in the Top 100, while California clocked in with 28.

Many of the most expensive rental markets on the list are elite travel destinations. Fisher Island is an exclusive island with private amenities that attracts high-net-worth clients, including wealthy business owners and celebrities. Aspen, CO — the infamously exclusive ski town — came in second on the list, followed by Margate City, NJ, which is a favorite Jersey Shore destination for high-net-worth travelers.

👉 You can view the full list of the nation’s most expensive rental markets here.

_{🖥️ FREE WEBINAR}
THE HIDDEN PATH TO ‘INFINITE INCOME’

Join us and Sunrise Capital on Thursday, December 12, for a FREE live event — Mobile Home Park Investing: The Hidden Path to ‘Infinite Income’.

Join Sunrise Capital’s CEO, Kevin Bupp, and Principal/Co-Founder Brian Spear to learn about investing in affordable housing in a tax-efficient portfolio of mobile home park assets.

👉 Register here to join us at 7 p.m. EST on December 12.

In this 45-minute event, you will discover:

✅ Why MHPs are drawing attention as a uniquely attractive real estate asset class.

✅ How investing in MHPs provides exceptional tax benefits via accelerated AND bonus depreciation.

✅ Why it’s better to invest with a “buy-improve-hold” strategy instead of “buy-improve-sell”.

✅ How investors can receive “infinite income” by receiving full return of capital while staying in the deal.

Can’t make it on December 12? Register anyway and we’ll send you the replay.

_{🏠 DEAL OF THE WEEK}
ADDING $6M IN VALUE WITH A 74.1% IRR IN JUST 2 YEARS

Sam Hales and the team at The Saratoga Group and Community First Construction added over $6 million in value to this mobile home park property and are giving investors a 74.1% IRR after just a two-year hold.

Here's how they did it 👇

🏢 Property Details: This mobile home park features 175 spaces plus 24 stick-built duplexes. It’s located in Auburn, GA, and was purchased in December 2022.

💸 Finances: The property was purchased for $7,625,000. The team raised $3,680,000 in capital and secured a $5,100,000 loan (67% LTV) at an 8.1% interest rate with interest only for the first three years.

💼 Business Plan: Sam and the team renovated and sold nearly 50 of the mobile homes in the past two years while turning over about 2/3 of the tenant base. Other improvements included installing a new office and parking lot and adding a large children's playground, a new monument, and wayfinding signage. They also repaved the roads and added solar streetlights.

💪 Biggest Challenge: The biggest challenge has been working with the local municipality. The City did NOT like the mobile home park, and they constantly battled with the previous owner. Sam and the team met with the city to understand their concerns and worked with them to resolve things like hooking up to city water and allowing code enforcement to come into the community and issue citations for code violations.

🍾 Projected Results: The team is currently under contract to close next week and sell the property for $13.6 million. Projected IRR upon sale is 74.1% with an MOIC of 2.89 over a two-year hold period.

If you have a deal you'd like to feature here, respond directly to this email with “deal breakdown.”