💰 Where capital has gone, and where it's headed

👋 Happy Sunday, Best Ever readers!

In today’s newsletter, capital flows, NYC's first full casino opens, industrial vacancy peaks, self storage stabilizes, a potential REIT mega-merger, and much more.

Today’s edition is presented by Equity Institutional Services. Your investors have IRA capital — most sponsors just don't know how to access it without slowing down their raise. Equity Institutional Services gives you the custody infrastructure, dedicated support, and sponsor-friendly tools to make self-directed IRA participation a standard part of every offering. Download the free Capital Raise Guide.

✅ In six weeks you could have a fully compliant, scalable Fund of Funds — legal formation, investor portal, deal page, and sponsor relationships all in one place. Join us alongside securities attorney Seth Bradley on May 7 at 1pm ET to see exactly how it's done. Register here.

Let’s CRE!

🗞️ NO-FLUFF NEWS
CRE HEADLINES

🏭 Industrial Vacancy Peaks: CoStar now projects U.S. industrial vacancy will peak in early 2027 — slightly above prior forecasts — as stabilizing demand struggles to absorb four years of new supply, with average annual rent growth revised down to 1.6% through 2027.

📦 Self Storage Stabilizes: U.S. self storage deliveries are on pace for 55.4 M SF in 2026 — a 2.6% inventory increase — with FL leading all states at 10.3 M SF while supply-constrained NY remains the only top-10 delivery metro where street rents have risen YoY.

🏗️ Dallas Dominates: Dallas-Fort Worth held the nation's largest industrial pipeline at 29.6 M SF as of February — 2.8% of total stock versus the 1.8% national average — with $955 million in YTD sales making it No. 1 nationally for industrial transaction volume.

🤝 REIT Mega-Merger?: AvalonBay and Equity Residential have entered preliminary merger discussions — a deal that would combine two of the largest apartment REITs, though their combined market share would remain below 4% in every market they operate.

🎰 Queens Bets Big: Resorts World NY has opened as New York City's first full-scale commercial casino — 242 live tables, 2,500+ slots — as phase one of a $5.5 billion, 72-acre expansion near JFK that includes a planned 2,000-room hotel and 50,000 units of workforce housing.

🏆 TOP STORY
WHERE CAPITAL HAS GONE, AND WHERE IT’S HEADED

In private CRE, the most honest data isn't what investors say they believe. It's where they actually put money. 

A new fundraising analysis from Agora — drawn from more than 1,000 real estate investment firms, 150,000+ investors, and $300 billion in AUM — reveals where capital moved in 2025. The picture is geographically concentrated, asset-class specific, and increasingly Southeast-heavy in ways that accelerated sharply from the prior year.

• The Southeast Pulled Away: The region's share of total returns jumped from 28.57% in 2024 to 40.51% in 2025 — a 12-percentage-point swing in a single year. The Southeast also led all regions in capital raised at 42.06%, while the Northeast produced just 21.38% of returns — roughly half the Southeast's share.

• Florida and Texas Are Money: Florida accounted for 18.14% of all capital contributions and 10.72% of total investor returns — the highest of any state. Texas followed at 11.32% of contributions. Together, the top 10 states captured 64.36% of total investments and 66.92% of total returns.

• Multifamily Dominated, Industrial Surged: Multifamily captured 48.61% of all capital raised and generated 40.31% of total returns. Industrial — which includes self-storage — produced 22.44% of total returns despite representing just 2.94% of capital raised, the sharpest return-to-capital ratio in the dataset.

• Industrial's Q4 Climb: Industrial's share of quarterly returns climbed from 8.05% in Q1 to 35.98% in Q4, nearly matching multifamily by year-end. Retail, residential, and mixed-use filled out the remaining return share, with infrastructure recording zero returns for the year.

The 2026 outlook adds momentum to these trends. A CBRE survey finds 74% of investors plan to buy more CRE assets than they did last year, with 55% increasing their capital allocations — up from 48% in 2025. Debt funds now account for 37% of closings, expanding the financing toolkit for GPs in an environment where bank lending remains constrained. Multifamily rent growth is projected at 2%, with higher gains concentrated in Florida and Texas — the same states already capturing the largest share of capital.

THE BOTTOM LINE

The data doesn't just show where returns came from, it shows where capital has already decided to go. The Southeast's dominance, multifamily's staying power, and industrial's late-year surge all point to the same conclusion: Conviction capital is concentrating in fewer places and around fewer asset classes. For GPs raising in 2026, these are the benchmarks.

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🗺️ ON THE MAP
THE CITIES WINNING THE NEXT GENERATION OF RENTERS

Graduation season is arriving with a new set of questions for the workforce entering the rental market: not just where the jobs are, but where a paycheck actually goes far enough to build a life. A Redfin and Glassdoor analysis of more than 180 U.S. cities — ranked across early-career earnings, housing affordability, job availability, and quality of life — surfaces a clear pattern: the markets winning for new graduates are rarely the ones with the highest salaries.

🏙️ Large Cities Reward Access Over Income: The top large markets balance strong entry-level job density with housing costs that don't immediately consume a first paycheck. High nominal salaries without affordability — Boston at $80,000 average earnings but 53% of income going to rent — rank lower than markets where the math actually works.

• Washington, D.C.: $79,857 average earnings, 19 job postings per 100 workers, starter home reachable in just over four years

• Omaha: Starter homes under $200,000, mortgage at 26% of income

• Chicago: $202,000 median starter home, down payment timeline of three years

🌆 Mid-Sized Markets Win on Rent-to-Income: The strongest mid-sized performers share one trait — housing costs that leave room in the budget. Wichita's rent-to-income ratio of 17% is the most favorable on the entire mid-sized list.

• New Orleans: Starter homes at $175,000, early-career wage growth outpacing rent increases

• Palm Bay, FL: Housing costs at 25% of income, aerospace employment base anchored by SpaceX and Blue Origin

• Wichita: Starter homes averaging $144,535, rent at just 17% of income

🏘️ Small Markets Offer the Clearest Path to Ownership: The top small markets aren't just affordable — they're the ones where buying actually pencils within a few years of graduation, a dynamic that shapes renter demand timelines.

• Springfield, IL: Starter homes at $128,000, down payment timeline just over two years, housing at 16–17% of income

• Macon, GA: Homes averaging $139,000, growing healthcare and logistics employment base

• Rochester, MN: Rent-to-income at 19%, Mayo Clinic anchoring employment stability

For operators tracking where the next generation of renters is forming, these markets are worth watching. Cities where graduates can afford to live — and eventually buy — are the ones producing the stable, employed renter base that underpins long-term multifamily demand.

👉 View the full lists here.

📩 YOU’RE INVITED
THE FUND OF FUNDS BLUEPRINT MOST CAPITAL RAISERS ARE MISSING

The legal formation, investor portal, deal page, and sponsor relationships all exist. The problem isn't information — it's that nobody has put it all together in one place.

That's exactly what this free training fixes.

🗓️ On May 7 at 1pm ET, securities attorney and Tribevest CLO Seth Bradley walks you through the complete system for launching a compliant, scalable Fund of Funds — from structure to soft commitments in under 60 days.

You'll walk away knowing:

• Why co-GP arrangements put your business at legal risk and what to use instead

• How Fund of Funds economics actually work across two fee layers

• How to get direct access to institutional sponsors with live deals

🎙️ THE BEST EVER CRE SHOW
THE PIPELINE GAP OPERATORS ARE UNDERWRITING

The apartment construction boom that defined 2021 and 2022 didn't just slow down — it stopped. What comes next is an undersupply window that's already being underwritten.

On a recent episode of the Best Ever CRE Show, J Scott joined Ash Patel and Amanda Cruise to make the case that the supply drought now baked into the pipeline is creating a development window that most operators are too cautious to act on.

• The Supply Math: Developers turned the faucet on in 2020 and 2021 when debt was cheap, flooding the pipeline with deliveries that hit in 2024, 2025, and into 2026. When rates rose in 2022 and 2023, starts effectively stopped. The result is a projected undersupply beginning in 2027 and 2028 — units that haven't been permitted, let alone built.

• Why Most Operators Are Sitting Out: Capital calls, underperforming assets, and a rough three-year stretch have made many GPs and LPs reluctant to take on anything unfamiliar. Scott sees that hesitation as the opportunity. The operators unwilling to move are the ones clearing the field for those who will.

• The Education Gap: Development returns aren't structurally different from value-add — but they parcel out differently. No cash flow for 18 months, no tax benefits until lease-up. Scott's approach is walking investors through that shift in risk profile before they commit, not after.

The window Scott is describing isn't permanent. It exists because the pipeline was shut off at a specific moment in time — and once new starts accelerate again, the opportunity compresses. The operators who move early are the ones underwriting into a market with almost no new competition.

🎙️ Listen to J Scott’s full episode here.