🏙️ How to win trophy deals (when you're not the highest bidder)

Good morning. It's Sunday, Apr. 19, and in this week's edition, we're covering the big banks' Q1 earnings showing CRE loan delinquencies holding steady (and in some cases improving) despite inflation and Iran conflict pressures, the surprisingly short history behind the Fed's 2% inflation target, and a Chicago operator's playbook for winning trophy deals when you're not the highest bidder.

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I am closing on an off-market Industrial Outdoor Storage (IOS) site in Milwaukee (currently vacant) and looking a strategic or capital partner.

I am looking for a partner who can bring a tenant [logistics company, fleet operator, school bus company, contractor, or equipment company] to this facility — or a capital partner ready to participate in a deal targeting a 14%+ cap rate on stabilized value.

If you have a tenant who needs this type of facility, or if a 14%+ stabilized cap rate fits your investment criteria, please reply to this email to connect.

Bank earnings season delivered a quiet vote of confidence in CRE credit. Bank of America's nonperforming commercial real estate loans dropped 44% year-over-year to $1.19 billion in Q1, and the bank released $72 million from reserves while peers are adding to theirs. Wells Fargo's nonperformers fell 2.6% to $3.78 billion, PNC's dropped 26% to $630 million, and Wells charged off just $19 million in CRE loans versus $158 million in Q4 2025. This is happening even as March inflation jumped to 3.3% on the back of the Iran conflict pushing up energy prices.

For CRE investors, it's a signal that the post-2023 office-driven stress cycle is largely behind the big banks, and lending appetite should keep widening through 2026.

🔗 "Why Smart Capital Is Still Betting on Office with Mike McDonald, JLL Capital Markets": Mike McDonald, Senior Managing Director of JLL Capital Markets, Americas, sits down with The TreppWire Podcast to unpack the current reality and outlook for U.S. office. He shares a 25-year perspective on how the sector has evolved post-COVID, explains why traditional Class A and Class B labels no longer tell the full story, and walks through JLL's new tiering system along with his three core investment strategies. Opportunity-rich markets like Dallas and Austin and AI's impact on the sector also get a look. Listen here

🔗 "Building a $2.8B Empire with Jay Roberts": Grant Cardone sits down with Jay Roberts, CEO of Prosper Group, to break down the mechanics of building a $2.8 billion real estate portfolio. From leveraging buyer deposits in Florida to surviving 100-hour weeks in investment banking, this episode is a masterclass in high-stakes development and market scaling. Watch here

🔗 "This Is the Biggest Opportunity in Real Estate Since 2008": Graham Storey argues that industrial real estate is one of the best opportunities available right now and that the timing matters. Drawing on his experience buying and brokering industrial properties in North Carolina, he lays out why the pattern he's seeing on the ground reminds him of what the smartest investors were quietly doing before everything shifted in 2008. Watch here

The Fed's 2% inflation target feels like gospel, but it's only 14 years old. The number formally got locked in back in January 2012 under Bernanke, building on Yellen-led subcommittee work and a Bernanke 2003 speech that floated 2% as "optimal long-run." C

ontext: PCE inflation has run above target since 2021, and the FOMC held the fed funds range at 3.50–3.75% at its March meeting. Trump called 2.7% "almost a perfect number" last October while pushing for cuts.

For CRE investors, the debate over whether 2% still fits matters because every basis point of policy drift reshapes cap rates and debt costs.

For a long time I believed that the best deals, the main-and-main trophy assets everyone wants, go to the big guys (the people with Harvard and Goldman Sachs on their résumé and the highest price).

I thought that if you're a small operator funding deals with local investors and local banks, you're not in that conversation.

I believed it so deeply I stopped going after those deals. Not consciously, but somewhere in the back of my head I'd already lost before I even made the call.

I was wrong. The highest price is rarely the whole game.

This past week I sat across from a seller I've been building a relationship with for a few months. He's a doctor by trade who has invested and operated in real estate for 40-plus years, and he's thinking about selling three shopping centers here in Chicagoland (the kind of assets that don't need to be marketed because buyers come to them).

The deal came from direct outreach. I got to know him over half a dozen calls, built a relationship, and eventually he invited me to come meet with him along with his CPA, his wealth manager, and his team to discuss a possible sale. I took that appointment immediately.

Then he texted me the names of who'd be in the room. I googled them, pulled them up on LinkedIn, and realized I was outnumbered. If this went to market, I was very likely getting outbid.

So how do I bring more value? How do I win a deal that's worthwhile for him and worthwhile for me?

The first thing I did was bring my banker. I called Jim, someone I've done multiple deals with, and asked him to come with me. He said yes, and we walked into that meeting together, as a team.

I brought him for credibility. When you're meeting with a seller, there's always one question running in the back of their mind: does this buyer have a bag of cash big enough that I can exchange my property for it?

The moment Jim started talking about how many millions in loans they carry on their books, how they think about lending, and their track record, that question quietly left the room.

What really landed was when Jim told them they fund my deals because they trust my judgment and because I bring them deals worth putting their money behind. The conversation stopped being about whether I could perform and started being about how we make this work.

The second thing I did was make a promise I intended to keep. At some point I looked at the seller and told him that if we end up doing this deal, you're not going to get a call canceling it at the 11th hour before close.

If I say I'm buying it, I'm buying it. If something unknown comes up, you'll hear from me on day one and we'll work through it together.

Simple words, but they landed hard. Because what he's really selling is certainty.

He had a buyer before who spent six months under contract, raked him over the coals, and dropped the deal at the last minute. He isn't doing that again.

That promise, if you can back it up, is worth hundreds of thousands or possibly millions in a seller's mind.

I'll know in the next few weeks if I'm getting this deal, but I'm getting first dibs. It's not going to be shopped before we both put our best foot forward. At the end of that meeting we walked out of that room feeling less like opposites across a table and more like a team trying to bridge the gap and make it worthwhile for everyone involved. He knows he might get more on the open market.

I know I might have to stretch above my comfort zone on price. We're both willing to find a happy medium.

That's the whole game.

Don't just throw offers and hope to win on price. Invest in direct relationships with sellers well before the deal itself, before the pressure of a broker process and the posturing that comes with it.

The best deals rarely get won at the closing table.

Most of the time they get won on a phone call, months before anyone else even knows the property is for sale.

I'm really curious how do you win deals besides the price , what tools do you have in your toolbox that worked for you?

Respond to this email and let me know. I'm really curious.

Until next Sunday.

Be well,

Saul

P.S. Missed my podcast with Aleksey Chernobelskiy? Here is the full episode.

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Random Saul Fact: Enjoying a beautiful spring day and mapping out the next few packed weeks.