🗞️ News & Moves 🏠

Trump’s booting Uncle Sam from the penthouse. (Bloomberg)

In true Trump fashion, the federal government got a wake-up call.

They need to stop renting fancy downtown spaces and start shopping like everyone else.

His new executive orders get rid of old rules from Carter and Clinton.

These rules forced agencies into expensive leases in historic areas.

Currently, the focus is on readily available purchases and affordable locations.

Elon Musk’s cost-cutting mission is heating things up.

Contracts are getting canceled, and staff is shrinking.

The GSA’s leading the charge, and D.C.’s office landlords?

Sweating.

This isn’t just a tweak—it’s a full-on shakeup of how the government spends your money.

Tariff war turned custom-bonded warehouses into gold mines. (Bloomberg)

Importers are flooding custom-bonded warehouses to dodge Trump’s revived tariff blitz.

These spots let you park goods for five years—no duties due till you sell.

Demand is so high that warehouse space costs up to 60% more than usual.

Startups like Flexe can’t keep up with listing space.

One seller even stashed $100 million in Christmas trees to buy time.

It’s not loophole hunting—it's survival mode.

Musk's cuts to federal waste and Trump’s policy changes turned these warehouses into Wall Street’s new hedge.

🚨 The Fed Pulse 🚨

The Fed isn’t flinching—at least not yet.

Trump’s been pushing hard to remove Powell, but John Williams at the New York Fed isn’t budging.

“No need to change,” he said plainly this week.

And that pretty much sums up the mood inside the central bank.

While markets are pricing in up to four cuts this year, Williams and his peers aren’t convinced.

Inflation is still the top risk.

Tariffs add a new layer of complexity.

Until wage growth slows or the labor market shows cracks, the Fed’s bias leans toward caution.

Wall Street wants looser policy, but the Fed is cautious.

They are protecting against the threat of ongoing inflation.

Unless something breaks in the job market, expect Powell and company to sit tight.

For now, political pressure is noise—the Fed’s signal remains steady.

Newsletter #041

Warren Buffett once said, “Price is what you pay, value is what you get.”

It’s one of those truths that’s easy to nod along with — and for many hard to follow.

But if you're serious about commercial real estate investing, especially in value-add deals, it’s a non-negotiable to grasp it.

That’s why I wasn’t surprised when one of our readers, Paul, asked a question that gets right to it:

“How do you quickly evaluate deals?”

Love this question, because if you can’t do this part with intuition and speed, everything else becomes more challenging.

People get stuck in endless spreadsheets, drowning in pro forma assumptions, chasing deals that never had a shot in the first place.

Meanwhile, the best investors are already three offers deep into better opportunities.

So, let’s unpack what deal screening actually looks like — not from theory, but from 20+ years in the trenches.

This is the framework I use every single day to filter real estate deals and spot the hidden value most people miss.

First, a bit of context.

Commercial real estate in the U.S. is a $26 trillion market, and nearly $500 billion changes ownership each year.

My guesstimate?

Roughly one-third of that is value-add — meaning we’re talking about $150 billion in deals per year that require someone to roll up their sleeves and actively improve the asset.

There’s no way to underwrite all of those deals, which means your edge has to be in speed.

You need a filter.

A mental model.

A gut-level sense of “this smells like a deal” or “nope, move on.”

That’s the single most underrated skill in value-add investing — knowing within few minutes if something is worth a deeper look.

I like to say that my job is to spot value before anyone else does.

It’s not about being the smartest person in the room — it’s about seeing opportunity quicker and acting with conviction.

Now, let’s talk about how I actually do that.

I’ve got two fast filters I use — one for gross lease assets and another for NNN deals.

The first one I call the Rule of 100x.

This is for properties where the income is more predictable and based on gross rents — things like self-storage, apartments, parking lots.

The idea is simple: after value-add, the asset should be worth roughly 100x its monthly gross income.

So, let’s say you’re looking at a self-storage facility with 100 units, and you believe post-renovation you can lease each unit for $150/month.

That’s $15,000 per month in gross rents.

Multiply that by 100, and you get a back-of-the-napkin valuation of $1.5 million.

Now, say the seller wants $900K and you estimate $100K in renovation.

So you're all in for $1M, and your future value could be $1.5M — that’s a strong signal to say, “Okay, this is worth deeper underwriting.”

I’m not saying it’s a sure deal.

It might take 3 years to finish this project, and it may not be worth it.

To get it right, you'll likely need to spend a few more hours on it, digging deeper and underwriting it fully.

And if numbers aren't positive on "napkin calculation," I go right away: "Nope, next".

The second one is the Rule of 10x, which I use for NNN-leased properties, or the ones I'm converting from gross to NNN leases.

This one starts with simplifying everything to lease rate per square foot.

Let’s say you believe you can lease a property post-renovation for $10/SF NNN.

I normally want to hit a 10%+ cap rate after the project is completed.

So if rents are $10NNN then your all-in cost needs to be less than $100/SF.

If you plan to spend $30 per square foot on renovation, lease-up, holding, and soft costs, you can pay up to $70 per square foot for the asset or less.

This isn’t your final underwriting — it’s a sniff test.

But it’s powerful.

Within minutes, you’ll know if there’s even enough juice in the deal to start squeezing and going deeper with full evaluation.

And if it doesn't pencil out on "napkin calculation," you pass without wasting too much time and energy.

Now, here’s where it gets tricky.

In both methods, your lease rate projection is the most important number.

Everyone talks about CAP rates, price per foot, construction budgets.

But lease rates?

That’s the holy grail.

If you under-project your lease rates, you won't be able to buy at such steep discounts.

If you over-project, you’ll be short on your valuation (terrible mistake).

And the truth is, there’s no easy answer.

CoStar and Crexi will give you data, but let's be honest, a lot of it is inaccurate.

I was talking with a former CoStar employee not long ago and even he admitted that the leasing data is often laughably off.

It’s just the nature of this business.

The best leasing data is always kept close to the chest, and the people who really know what’s happening in the market?

They’re not uploading it to CoStar.

They’re making offers.

The best way I’ve found to stay accurate on lease rates is to be deeply involved in leasing conversations.

Not just reading comps.

I’m talking boots-on-the-ground — talking to tenants, working with brokers, feeling the demand in real time.

That’s how you avoid making bad assumptions.

Know the lease rates intimately, and suddenly your underwriting becomes not just faster, but deadly accurate.

This is also one of the main reasons we built Industrial IQ — a software tool designed specifically for small-bay industrial acquisitions and leasing.

We were tired of flying blind on lease data and seller contact info, so we created something that gives us a real edge.

Industrial IQ helps you understand leasing demand, connect directly with sellers, and buy them off-market.

We’re currently taking on beta users, and we’re hosting our first Industrial IQ Bootcamp in Chicago on June 21–22.

It’s a two-day deep dive where we’ll break down everything that’s working in our acquisition, leasing, and operations.

No fluff.

No gatekeeping.

Just what’s working in real time.

👉 If you’re interested in applying, click here.

So yeah — that’s how I screen deals.

Two fast rules.

The goal isn’t to be perfect.

It's to make the acquisition decision as frictionless as possible.

In CRE, the goal isn’t to find the perfect deal.

It’s about easily spotting good singles.

And some of these will turn into home runs.

Till next Sunday.

Be Well,

Saul