Real Estate

When you build a crazy number of new apartments, rents fall even in the most affordable (Class C) market-rate units. You can see it here: In 29 MSAs, Class C rents fell more than 3.5% over the last year. In 26 of those, new supply expansion rates topped the national average. Coincidence? Of course not. This data directly debunks the myth that new apartments -- generally built at the highest price points due to construction costs -- don't help with affordability at other rent levels. Here's what is happening: It's a process academics call "filtering." When you build new Class A+ apartments, you pull up higher-income renters out of Class B+/A- apartments. In turn, those units cut rents to lure up Class C's highest income renters. And in turn, that opens up availability at the lowest price points. And in these highest-supplied areas, Class C apartments often have to cut rents the MOST (of all asset classes) in order to fill back up. Why? Because to expand the demand funnel, they might have to cut rents enough to draw in renters who were previously priced out of market-rate rentals all together. That's what we see happening here. Takeaways: 1) Building Class A+ apartments in large numbers helps improve affordability even at the lowest price points. 2) In periods of high supply + economic expansion, renters in healthy financial shape tend to move "up market" -- paying similar or higher rents to move into newer, better-amenitized apartments (Class B+ to A+). 3) Class C apartments tend to feel the biggest impact from high supply, with rent cuts often exceeding those of Class A (excluding lease-ups with concessions) and Class B ... and perhaps also with deeper path toward a rent rebound, given they've lost some of their financially stronger renters and drawn in renters previously priced out. 4) This only holds true in high-supplied areas. In low- or moderated-supplied markets, Class C is more insulated from the impact and more likely to still be producing solid rent growth. (Indeed, Class C rents are still growing 4%+ in lower-supplied markets like Pittsburgh, Rochester, Little Rock, etc.). 5) Check out Austin, the "Exhibit A" of high-supplied big markets. Class C rents falling nearly 12%. Bottom line: If you truly care about rental affordability, put away the boogeyman conspiracy theories and build, baby, build. #rents #apartments #affordability

This time of year, EVERY YEAR, all of my clients, colleagues, friends, and family ask: "what is going to happen with real estate next year?!" So, here are my honest thoughts for 2024: Warning: I may not have a crystal ball, but I do have over 15 years of experience in selling luxury real estate with over $6B worth of transactions under my belt. However, it's still important to note that these are nothing more than educated guesses. 1. We are going to have even greater BIFURCATED MARKETS. Some industries are returning to pre-COVID patterns, while others are now permanently changed. As a result, there is significant interest in the repositioning of big box retail and commercial space. 2. Stemming from the increase in work from home, there will be more NATIONAL SEARCHES. People are now expanding their searches drastically. Rather than looking at comps in a building, neighborhood, or city, they're looking comps across multiple states! 3. SUBURBS are on the rise. This is driving up the demand for bigger homes with more amenities and privacy. Transaction volume is down by over 50% and listing volume is down by over 20%... yet median pricing is up by almost 5%. This creates more tax dollars for the suburbs, so if you're an investor, pay attention to what the municipalities are doing with that money (schools, restaurants, parks, etc.). 4. BRANDED RESIDENCES will be in strong demand. Since 2010, we've seen 40% growth in branded residences – and buyers have proven to be willing to pay a premium for them. 5. DOWNTOWNS built around professional workers will feel immense pressure. Don't get me wrong: Downtowns are not going to go away... but stemming from my 2nd and 3rd points, we are going to see even greater pressure on dense living spaces. 6. Investors are going to become BEARISH on real estate. I hesitate to talk about this because I'm in the real estate business... but with high interest rates, low supply, and low transaction volume, fewer investors are going to be looking to acquire property (in the near term!). 7. Prices are going to continue to... INCREASE! I know – this sounds crazy, right? The lack of inventory is going to continue, and it's going to keep prices high and growing. As the economy continues to do well and inventory stays locked, demand is going to continue to outpace supply. And if interest rates do come down... if you think prices are high now, just get ready. 8. Interest rates will actually STABILIZE. I don't think interest rates are going to plummet, but if unemployment stays low, the Fed will keep interest rates stable. – P.S. If you want to hear about each of these predictions in even MORE detail, check out my newest video on my second YouTube channel, More Ryan Serhant. – Every year can be the GREATEST year of your life. Remember, markets shouldn't dictate your outcomes. They should only dictate your strategy. Ready. Set. GO!

🌃 Great visualization of New York City building ages. Looking at this map holds an important truth for the future of the real estate industry: The future of real estate is all about retrofitting existing assets. The majority of real estate in the U.S. that will exist in 2050 is already built. A wave of climate regulation is coming for the real estate industry in major cities across the country, with the goal of net zero emissions by 2050. The vast majority of real estate value is concentrated in cities. So there are a lot of old buildings that will be subject to carbon fines and taxes, if they don't invest in retrofits to improve their energy-efficiency and reduce reliance on on-site fossil fuel use. While we may think the future of "sustainable real estate" looks like shiny, metallic buildings with trees growing on them...sure, that might be the case for new builds. But those are the exception, not the rule. (Look at the Empire State Building...looks just the same as it always has, but through retrofitting they've achieved 80% less energy usage in the last decade! That's the kind of forward-thinking that needs to happen in the world of Local Law 97.) Image source: George Koursaros #realestate #locallaw97

Back on recession watch, Leading Indicator #2 – the FHA mortgage delinquency rate. This isn’t typically in lists of leading economic indicators, but it may be a proverbial canary in the coal mine in the current context. FHA borrowers have low to moderate incomes, with a median income of about $75,000 a year, and most are first-time homebuyers. Judging from the recent increase in the delinquency rate on FHA loans, these households are under mounting financial stress. This is despite the exceptionally low 4% unemployment rate and goes in part to the credit characteristics of the borrowers, including lower credit scores and downpayments. Even more important may be their high debt-to-income ratios. With mortgage rates and house prices as high as they are, borrowers have to shell out a big share of their income to their mortgage payment to get into a home. They may have gambled that rates would fall and could refinance, bringing down their payment. However, the Fed’s higher-for-longer rate policy and quantitative tightening have forestalled that exit strategy. Combine this with higher homeowner insurance premiums and property taxes, and borrowers struggle to make mortgage payments. What happens when the job market wobbles even a little bit? Thus, why this is a good statistic to include in our recession watch. Not that the financial troubles of FHA borrowers are enough to push the economy into recession. Indeed, high and middle-income mortgage borrowers are having no trouble making their payments at this time – the gap between the FHA delinquency rate and those on Fannie and Freddie loans has never been as large. But if the economy is headed for trouble, it is FHA borrowers who will signal it first. And they are. #rates #FHA #income #recessionwatch #fed

Maine just legalized 3 units per lot statewide. No planning board approval needed for 4 units or fewer. But the real breakthrough isn't the density. It's what they eliminated: Maine has seen the biggest house price growth in the US since 2019. The median cost is $400k, nearly double what it was 6 years ago. Radical change was needed. So they broadly legalized ADUs as part of the larger package of reforms. Including sweeping changes to zoning and land use regulations. Here's what LD 1829 actually does: 1/ Density: • Maximum 2 off-street parking spaces for every 3 units • Three dwelling units per residential lot is now legalized • Affordable housing developments get 2.5x the base density allowance Municipalities are now required to permit multiple dwelling units per residential lot. 2/ Review Processes: • All planning board members must attend mandatory training • No planning board approval needed for projects with four or fewer dwelling units • Wastewater verification and subdivision threshold "loopholes" have been simplified Required planning board approval for smaller projects is prohibited. 3/ Other Changes: • Owner-occupancy mandates for ADUs eliminated • Uniform dimensional standards for multiple-unit dwellings same as single-family homes • Minimum lot sizes in growth areas capped at 5,000 SF with 1,250 SF per dwelling unit density This is the density breakthrough. Maine now allows up to 4 units on lots in growth areas, with just 1,250 SF of lot area per unit. That's 4x the housing on the same land. Small developers can finally compete without needing millions in land acquisition. Maine eliminated barriers that made small-scale multifamily difficult to build. The timeline for these changes: Applies immediately: Fire sprinklers, ADU definition, and mandatory training. July 1, 2026: Core zoning and density changes. July 1, 2027: All other municipalities. The bigger picture: Maine has shifted how housing density and development approval is processed. Something more states should follow. Read the full report linked in the comments.

Sales reps email "just checking in" an average of 5 times per day. Does this work?  Rarely. The habit of saying "just checking in" negatively impacts your sales efforts: ⇒ It doesn't add any value to the conversation. ⇒ It can come across as lazy or insincere. ⇒ By using this phrase, you miss opportunities to engage meaningfully. Here are 10 tips to stop saying "just checking in" and do something else instead: 1. Provide Value:  Instead of "just checking in," offer a useful piece of advice or a relevant resource. For example, "I came across this article that might help with your current project." 2. Ask Specific Questions:  Directly ask for the information you need. For example, "Can you update me on the status of the proposal we discussed?" 3. Share a Success Story:  Highlight a recent success that relates to the prospect's industry. For example, "We recently helped a company similar to yours achieve X. Would you like to hear more about it?" 4. Offer a New Insight:  Share a new piece of information or a market trend. For example, "I wanted to share some recent data on how companies in your sector are handling Y." 5. Suggest a Next Step:  Propose a clear next action. For example, "How about we schedule a call next week to discuss this further?" 6. Follow Up on a Previous Conversation:  Reference a specific point from your last interaction. For example, "Last time we spoke, you mentioned interest in Z. I have some additional information that might be useful." 7. Invite to an Event:  Offer an invitation to a webinar or industry event. For example, "We’re hosting a webinar on [topic] next week. Would you be interested in joining?" 8. Highlight a New Feature:  Inform them about a new feature or update. For example, "We’ve just launched a new feature that could benefit your team. Would you like a demo?" 9. Ask for Feedback:  Request their opinion on something specific. For example, "I’d love to get your feedback on our latest product update." 10. Express Genuine Interest:  Show that you care about their progress. For example, "How are things going with your current project? Is there anything I can assist with?" By replacing "just checking in" with these strategies,  you can make your follow-ups more engaging and valuable. This ultimately leads to better responses and stronger relationships. ♻️ Share this cheat sheet to help more sales reps improve their follow-up game. ______ 📌 p.s. FREE GIFT: If you’re looking to streamline sales plays across your sales team, you can click here: https://www.distribute.so/

"ABC Corp. (together with its affiliates, "ABC") and XYZ Inc. (together with its affiliates, "XYZ") enter into this agreement as of the date of execution below. ABC and XYZ (collectively, the "Parties") hereby agree as follows:" I've never understood why some people like to define party names to include affiliates. Especially all affiliates - current and in the future, which is what the above would do. It's riddled with one #ContractTrap after another. Here are just a few: 1 / Is it even effective? If ABC Corp and XYZ Inc are not the ultimate parent entities, can they really bind their parent companies in the first place? 2 / Does every single entity in the organization own the obligations of the party? So if a contract requires notice to be provided - for example, to avail itself of indemnification remedies - does every entity have to provide notice, lest that entities' damages not be indemnified? What if there's a covenant to comply with the laws applicable to the Party - does that mean that US entities have to comply with the laws applicable to the EU entities? 3 / And how is M&A impacted? Does an acquiring company (or acquired company) automatically assume all of the obligations too? That could make a target far less appealing, particularly if there are non-competes or other material restrictions binding all affiliates. What should you do instead? - Always make sure that just one entity is the party (or if there are multiple that actually will operate under the agreement, call them out specifically by name). - If all of your entities are going to be operating under the agreement and the counterparty wants to make sure you're not using your affiliates to breach, limit the contract party to one entity and include a clause like this: "if an act or omission by an affiliate of a party would constitute a breach of this agreement if such act or omission would have been committed by such party, such act or omission shall be deemed a breach of this agreement by such party and such party shall be liable for such breach as if such party had committed such breach". - And before binding future affiliates to anything, always make sure to think about the impact on future M&A activity before agreeing! #contracts #law #inhousecounsel

Which Sectors in Real Estate Are Family Offices Likely to Invest in Now? As family offices consider where to allocate their capital, real estate remains a primary focus. Its tangible nature, potential for steady income, and ability to hedge against inflation make it an attractive asset class. However, the specific sectors within real estate that capture family office interest are shifting based on evolving market dynamics, long-term goals, and generational priorities. Family offices are increasingly focused on specific real estate sectors that align with their long-term goals and investment strategies: 1. Multifamily Housing: A preferred sector due to stable cash flows and growing demand in both urban and suburban areas. There's also rising interest in affordable housing, driven by both impact investing and market needs. 2. Industrial and Logistics: The e-commerce boom continues to drive demand for warehouses and distribution centers. Family offices are particularly interested in last-mile delivery properties. 3. Medical and Life Sciences: Healthcare-related properties offer stability and long-term leases, making them attractive. The aging population also drives demand for senior living facilities. 4. Hospitality: With the rebound in travel, there’s renewed interest in hotels, resorts, and unique experiential properties. 5. Office Space: Investments focus on flexible office solutions and properties with strong sustainability credentials, adapting to hybrid work trends. 6. Student Housing: Consistent demand, resilience during economic fluctuations, and long-term leases make student housing appealing. It also offers opportunities for global diversification. Investment Strategies - Family offices leverage their significant capital and long-term perspective through: 1. Direct Investments and Partnerships: Direct control and flexibility in niche markets are key benefits, often complemented by strategic partnerships. 2. Value-Add and Opportunistic Strategies: Higher returns are sought through investments in properties needing redevelopment, with a focus on market timing. 3. Long-Term Holdings and Legacy Projects: Real estate is used to preserve wealth across generations, with a focus on long-term capital appreciation and legacy-building. 4. Geographic Diversification: Family offices are increasingly investing globally, partnering with local experts to mitigate risks and tap into emerging markets. Family offices remain committed to real estate, leveraging their unique advantages to navigate and capitalize on market opportunities. #familyoffice #familyoffices

This method closed me million-dollar real estate deals — without working harder. And I didn’t figure it out on YouTube. I figured it out in the middle of a deal drought. Let me explain. years ago, I started testing a different approach. Instead of cold-calling every owner in sight or chasing brokers for scraps, I shifted my focus to marketing like an owner — not a salesperson. It started small: → Weekly emails that actually told real stories behind the deals → Direct texts — not spam blasts, but thought-provoking, investor-first messages → And more recently, consistent content on platforms like LinkedIn But here’s the catch: I never sold anything in those messages. I educated. I shared the deal math. I shared what I passed on — and why. I shared mistakes I made early on, and what I’d do differently now. I stopped pushing. And started pulling. And then it happened… 📞 A seller texted me back from an old email campaign: “I’ve been getting your stuff. Want to look at a center I’m thinking of selling?” That turned into a $2.7M off-market deal. No broker. No noise. Clean terms. 📩 An investor who’d never responded to me in 6 months replied to a simple insight I texted about cap rates and inflation: “I like how you think. Loop me in on the next one.” He wrote a $1M check 10 days later. 💬 Then LinkedIn started compounding. I’d get DMs from owners, brokers, equity — all saying the same thing: “I don’t see anyone else breaking it down like this.” — Here’s the real play: ➡️ The right kind of marketing is just education with a backbone. ➡️ And the right audience isn’t looking for perfection — they’re looking for clarity. ➡️ When people trust your lens, they trust your deals. I still do outreach. But now… Deals come to me. Equity comes to me. Partnerships come to me. That’s leverage. And it didn’t cost more hustle — just better communication. — Adam Shapiro #RealEstateInvesting #OffMarketDeals #CapitalRaising #EmailMarketing #TextCampaigns #SocialSelling #CommercialRealEstate #LinkedInStrategy

The #1 mistake I see in client relationships? (It took me years to learn this) Confusing contact with connection. Most professionals think staying “top of mind” means constant contact. So they: ❌ Send generic check-ins. ❌ Ask for meetings without clear value. ❌ Share the same articles everyone else does. Then wonder why response rates keep dropping. 20+ years in client relationships has taught me: The best way to stay memorable? Show up as someone who genuinely cares about them  (and their success). Instead of asking: ❌ “How do I stay visible?” Ask: ✅ “How do I show I care?” Here are my favorite 6 ways to show you care: 1. Spot Opportunities They Might Miss ↳ Share competitor moves and market shifts before  they hear it elsewhere. 2. Be Their Connector ↳ Introduce them to people who can help them grow. 3. Offer Insights They Can Use Immediately ↳ Send relevant research they can apply right now. 4. Celebrate Their Successes ↳ Spotlight their wins like they’re your own. 5. Invite Them Into Your World ↳ Include them in events and conversations that matter. 6. Check In With a Personal Touch ↳ Reach out with no agenda, just genuine care. Here’s the truth: Most people only show up when they want something. Top performers show up because they genuinely care. Because they know when someone’s ready to buy, they don’t research who’s available. They call those who’ve already proven they care. Agree? Disagree? I’d love to hear your take on it in the comments below. ♻️ Valuable? Repost to help someone in your network. 📌 Follow Mo Bunnell for client-growth strategies that don’t feel like selling. Want the full cheat sheet? Sign up here: https://lnkd.in/e3qRVJRf