🗞️ News & Moves 🏠

The feds are cutting dead weight—$430M in savings and prime real estate up for grabs. (Commercial Observer)

The Trump administration is cutting the government’s real estate portfolio.

The General Services Administration is selling 443 properties.

These cover almost 80 million square feet and are worth $8.3 billion.

Some are small offices, but others?

Massive agency HQs, like the USDA’s 2-million-square-foot South Building in D.C.

The plan?

Save $430 million each year.

Strategies range from straight sales to sale-leasebacks.

Elon Musk’s Department of Government Efficiency (DOGE) is cutting leases everywhere.

Either way, this could reshape the commercial market.

BlackRock made a $23B power move—securing control of key ports near the Panama Canal. (CBS News)

Trump wanted China out of the Panama Canal.

Now, BlackRock is making it happen.

In a $23B deal, they are taking over ports once managed by a Hong Kong firm.

This move shifts control of 43 global ports to the U.S.

This includes two of Panama’s four major terminals.

With 70% of canal traffic tied to the U.S., this isn’t just business—it’s strategy.

National security, trade dominance, and global logistics are all in play.

The message?

America is reclaiming critical chokepoints.

And BlackRock just secured a front-row seat.

🚨 The Fed Pulse 🚨

Despite the noise, the economy is finding its footing.

The Atlanta Fed’s GDPNow shocked many with a forecast of -3.0% for Q1.

However, analysts have since adjusted that to -2.4%.

What caused the dip?

A rush of imports—up 25% in January—as businesses moved ahead of tariffs.

It’s a statistical blip, not a sign of economic weakness.

Manufacturing is on the rise.

Also, leading indicators show steady growth.

Pending home sales hit a record low, but that’s more about tight inventory than a lack of demand.

The 10-year Treasury remains steady at 4.24%-4.28%.

Also, 30-year mortgage rates are at 6.63%.

The key takeaway?

The economy is stabilizing.

2 Years, $4.5M to $8.8M

This might be the best of all-time value-add deal when it comes to "light lift" renovation.

Buckle up.

I promise you'll be invigorated and snag a few valuable pieces for your future deals.

In real estate, the best deals aren’t the ones sitting on the market.

The real gems come from making phone calls, building relationships, and being patient.

That's exactly how my friends Jaime Contreras (Facebook) and Slava Menn (Facebook) found their small bay industrial property at 78 Regional Dr, Concord, NH - a property with untapped value that also led to a lasting friendship with an 82-year-old developer who had built over 36 industrial buildings throughout his lifetime.

Here’s how they found the deal, why they pounced on it, and what happened after they closed.

Finding the Deal:

It all started with a different property.

Jaime was preparing an offer for an industrial deal only half a mile away.

He was negotiating with Jerry, the owner, who was a developer with many years of experience.

They were close to finalizing the deal when a competing 1031 exchange buyer suddenly appeared with a cash offer.

Jerry called Jaime and said:

"I feel terrible, but I can’t let this go."

Jaime was bummed out, but he ended on a high note, chatting with the seller for over an hour and they became friends.

The deal was dead.

Or so it seemed.

Two and a half months later, the broker called Jaime back.

Jerry wanted to sell another one of his properties—78 Regional Dr.

Without hesitation, Jaime took a look, and wrote an offer.

Why This Deal Was a No-Brainer

✅ Price Per Foot: Listed at $4.9M, they negotiated it down to $4.5.

The building is 58,000 SF, meaning they got in at around $77/SF—well below market.

✅ 100% Occupancy: The property was fully leased, but here’s the kicker—the tenants were paying well below market rents. 

Some were locked in at $8 gross, while the market commanded $12-$14 triple net.

✅ Seller Financing: Jerry didn’t want a massive tax bill, so they agreed on 70% seller-financed loan at 5.5%.

✅ Well-Maintained Asset: Jerry built it himself and took great care of the buildings.

So, it needed only a few minor improvements.

In total, Jaime and Slava have only spent $50K on improvements since acquiring it.

Executing the Plan:

The business plan was simple: bring rents to market, change leases to NNN, and refinance.

At acquisition, all leases were gross leases—meaning the landlord was responsible for all expenses.

As tenants’ leases expired, they shifted them to triple net leases at market rates.

They exceed expectations in pricing.

Initially, they underwrote rents at $11 gross, and in reality, the market now is $14 NNN, which was a huge bump to their rents.

They completed a cash-out refinance at 6.75%, which allowed them to pay out all their investors while keeping the property in their portfolio.

They now have 2 tenants left to renew and once fully stabilized, they expect to generate $323K in annual free cash flow.

Their NOI currently stands at $468K and once the property is completely tuned, it will produce $704K in NOI, which is $8.8M at an 8% cap rate.

Lessons From the Deal

1️⃣ Build Relationships With Sellers – This deal didn’t come from a broker blast or an online listing.

It came from a relationship with the seller, who over time, became a friend.

Jerry and Jaime are friends to this day.

2️⃣ Be Conservative in Your Underwriting – They underwrote rents at $11 gross to stay on the safe side, even though the market was higher.

You'd rather be pleasantly surprised than be too optimistic and get squeezed under pricing press.

What’s Next?

Jaime and Slava are now working on their final two lease renewals. 

Once completed, 78 Regional Dr will be fully stabilized, and they’ll continue riding the cash flow.

But they’re not stopping there—Jerry still owns multiple buildings in Concord and Wareham, MA, and let’s just say… conversations are ongoing.

The last one went like this:

Jaime goes, "Jerry, when are you selling me the next one?"

"If Trump drops capital gains, I’m calling you the next day," Jerry laughs.

That's all, folks.

I bet this will get your wheels turning.

Cheers!

Till next Sunday 9:07 AM