The commercial real estate lending landscape is showing cracks across all major capital sources, with delinquency rates climbing in Q1 2025. Life insurance companies—typically the most conservative lenders—saw their delinquency rate jump to 0.47%, the highest since 1998. Banks hit their worst levels since 2014 at 1.28%, while Fannie and Freddie reached rates not seen since 2011. The most alarming signal? CMBS delinquencies spiked 64 basis points to 6.42%—a concerning sign since these borrowers have limited refinancing options when trouble hits. With property prices declining and bank lending at an 11-year low, the broad-based stress suggests CRE's challenges are deepening beyond just office properties.

The tide is finally turning for U.S. office real estate, and smart money is starting to take notice. After three brutal years of record vacancies and frozen capital markets, key fundamentals are quietly inflecting upward. Office attendance has stabilized at 60-75% of pre-pandemic levels, with remote work growth slowing to just 0.6% year-over-year—half the pace of overall job growth. More tellingly, occupied space declines have dramatically slowed from 124 million sq ft during the worst four quarters to just 35 million sq ft recently. Meanwhile, CMBS office debt issuance surged to $11.4 billion in Q1 2025—triple the prior year—as lenders regain confidence. With office cap rates now hitting 7.4-8.8% (well above the 5-6% in apartments and industrial), yield-hungry investors are finding generational opportunities hiding in plain sight.

The Federal Reserve kept interest rates unchanged for the fourth straight meeting while maintaining its forecast of two cuts this year, even as officials expect core inflation to jump to 3.1% by year-end due to Trump's tariffs. Fed Chair Jerome Powell downplayed the rate projections, telling markets not to take them "too seriously" given massive uncertainty around trade policy. With officials split almost evenly on whether to cut rates and tariff battles escalating, the Fed finds itself in a tricky spot—potentially boxed in between supporting a cooling job market and fighting inflation. Meanwhile, geopolitical tensions in the Middle East add another wild card that could tip the economy into recession, according to former Fed adviser Jon Faust, who sees just 50/50 odds of any rate cut by December.

Last week, I had Fernando Angelucci on the podcast, and he dropped a truth bomb that's been rattling around in my head ever since.

"Capital raising isn't a part of your real estate business," he said. "It's a completely separate business that happens to fund your deals."

That hit different.

For the longest time, I treated capital raising like an annoying side quest—something I had to get to the "real work" of buying and repositioning properties.

But Fernando?

He's raised $230 million across 53 self-storage facilities in 24 states.

He's done it by treating capital raising like the full-time business it actually is.

Let me break down his framework—and why it's a game-changer for anyone looking to scale beyond friends and family money.

Fernando maps out capital sources like climbing a ladder.

Each rung demands different skills, different approaches, and different relationship strategies.

This is where everyone starts.

Your brother-in-law, your college roommate, your parents.

These people aren't betting on the deal—they're betting on you as the jockey, not the horse.

Fernando's advice?

Keep it stupid simple.

"Hey Saul, if you give me a dollar, in five years I'll give you $2 back."

No IRR calculations.

No waterfall structures.

Just clear, human language.

This is your dad's poker buddies, your sister's church group.

They don't know you directly, but they trust the person who does.

You're still trading on relationships, but now it's borrowed credibility.

Most operators plateau here.

They burn through their warm connections and hit a wall trying to reach the next level.

This is where the game changes completely.

These are accredited, high-net-worth individuals who don't know you from Adam.

They're not betting on the jockey anymore—they're dissecting the horse.

Now you need a track record, professional marketing, and systematic processes.

This is where Fernando's "separate business" philosophy becomes critical.

Here's what Fernando taught me that I wish I'd known 10 years ago: you need to fire up your marketing engine while you're still raising from friends and family.

Why?

Because building credibility with retail investors takes time.

Serious time.

Fernando started podcasting, posting educational content, and building his online presence before he had any deals to show.

When retail investors finally discovered him, they saw a thought leader—not just another operator with his hat in hand.

"The world of capital raising is extremely carnivorous," he explained.

"Broker-dealers will charge you 5-12% to access their networks. If you're raising $1 million, that's $120,000 in transaction costs."

His solution?

Build organically.

Create a website, establish social media presence, and develop educational content about your asset class.

Even if you don't have a deal ready, start positioning yourself as the expert in your field.

Here's what blew my mind: the same pitch that works with your uncle will bomb spectacularly with a family office.

Friends & Family: Simple profit splits, maybe 50/50. No preferred returns. Keep it conversational and straightforward.

Retail Investors: Now you need proper waterfalls, preferred returns, and professional PPMs. Fernando's current range: 14-18% IRR for stabilized assets, 22-27% for ground-up development.

Family Offices: Complex waterfall structures, co-investment requirements, and minimum check sizes that might exceed your entire capital raise. Fernando works with family offices that won't write checks smaller than $10 million.

Each level speaks a different language and has vastly different expectations. One-size-fits-all simply doesn't work.

I started exactly like Fernando described—friends and family on house flips, then friends of friends doing hard money loans.

When I transitioned to commercial syndications, many of those original investors followed me.

Ten years later, some of my best LPs are people who trusted me when I was just a guy flipping houses in Chicago.

They've brought their friends, who've brought their friends.

It's been purely organic growth with my existing sphere.

But here's what I'm realizing: organic growth only gets you so far.

Fernando's systematic approach—treating capital raising as a standalone business with dedicated marketing, systems, and scalable processes—that's how you break through to institutional capital.

That's how you leap from raising $1 million to raising $50 million.

If you're serious about scaling, you can't treat capital raising like a necessary evil.

You can't just wing it with a PowerPoint and cross your fingers.

You need systems.

You need marketing.

You need to think like a capital raising company that happens to do real estate deals, not the other way around.

Fernando manages over 900 investors across his portfolio.

Picture each one calling him directly with questions—he'd never accomplish any real work.

That's exactly why he's built investor portals, automated communications, and streamlined processes for everything from first contact to K-1 distribution.

It's essentially a business within a business.

And if you want to compete at the next level, it's absolutely non-negotiable.

Start building your capital raising engine today—even if your next deal is six months out.

Future you will thank present you for planting these seeds now.