🏙️ Nobody can fix your lease-up for you

Good morning. It's Sunday, Feb. 15, and in this week's edition, we're covering CBRE's latest cap rate survey signaling the start of a new cycle, what Kevin Warsh's Fed nomination means for CRE borrowing costs, and a hands-on leasing framework for operators who are tired of stalled lease-ups

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Cap rates flatlined in H2 2025, but nearly half of CBRE's 200+ surveyed professionals expect yields to start compressing over the next six months. Transaction volume climbed ~19% last year, lending activity is well above its five-year average, and pricing indices have stopped falling. Retail and multifamily are seen as the most appropriately priced sectors. For CRE investors, the setup looks like the early innings of a new cycle.

Chicago's downtown office vacancy hit 28.2% at year-end 2025 (more than double pre-COVID levels), marking the 14th straight quarter of record highs. Tenants shed roughly 370,000 square feet more than they occupied last year, with net absorption negative for the ninth time in 10 quarters. Trophy tower rents are up 26% over five years, but broader downtown rents are flat. As leases roll, expect further occupancy losses and declining valuations putting more fiscal pressure on an already-stretched city.

Trump tapped former Fed governor Kevin Warsh for the Fed's top job, and CRE is parsing a mixed policy record for clues on rates. The big wildcard is Warsh's stance on unwinding the Fed's $6.6 billion balance sheet (roughly a third in mortgage-backed securities), where aggressive sales could push mortgage rates higher with spillover into multifamily and broader CRE. Senate confirmation is expected, but investors should watch his hearings closely for signals on Basel III capital requirements and balance sheet policy.

The year is 2022. Shea and I just closed on our first self-storage deal.

We had the acquisition dialed in: off-market sourcing, cold calling, direct mail process, underwriting system, all of it.

But we had zero clue how to actually fill the units.

We knew the concept: clean it up, kick out bad tenants, install marketing, lease at market rates.

Easy, right?

We'd both just read Who Not How. So instead of getting in the weeds ourselves, we hired a regional GM from a legit operator.

She promised she'd install the marketing and leasing process - no problem.

Three months later, nothing. We parted ways soon after.

"Okay," we thought. "Let's go with a reputable third-party property management company. They do this every day."

Three months later, same story: no real process and no predictable results.

Finally, we dove in ourselves, and within a few months we had a working system.

After we had built that system ourselves, we hired a team to execute it.

We learned a lesson that I want to share with you today:

Nobody can build your leasing process for you. You have to do the work, document it, and then delegate the execution.

Brokers and PMs are great at execution once the system exists. But expecting them to create your process from scratch is where lease-ups get delayed.

And when deals stall, your partners start asking: "Why is leasing taking longer than projected?"

Here's how you actually build a leasing process that scales, whether you run it in-house or hand it to brokers 👇

Leasing breaks into three conversion points:

Most operators skip straight to hiring someone and hoping it works, and that's the mistake. You need to do it yourself first.

Run ads yourself for two to four weeks on Facebook, LoopNet, Crexi, and similar platforms, posting at least five ads per week.

Track everything, and do it all yourself: the photos, the copy, the floor plans.

After 10 to 20 total ads, pick the two winners based on the best cost-per-lead and inquiry volume.

Once you have that template, you can hand it to your broker or in-house team and they can innovate from there.

Take 50 or more conversations and 100 or more DMs yourself. Record and transcribe them all, and run them through ChatGPT if you want.

Find the pattern: what questions close, what objections come up, and what gets people to actually book a tour?

Here's our online lead script (under 100 words):

From there, we move to the phone for deeper qualification.

(Here's the video of a class on how we convert leads to appointments, taught at our Industrial Bootcamp in Chicago)

Once you've done 50 or more conversations, you'll have your script. Then whoever executes (broker or team member) can follow it.

Go on at least 10 tours yourself and record every one.

Document your closes, draft your lease template, and build out your objection handlers (especially if you're converting a gross quote to NNN).

Track your conversion metrics at every stage:

Once you know your numbers, leasing becomes predictable math.

For example, if five tours typically equal one signed lease and your marketing generates leads at $40 each, you can reverse-engineer your stabilization timeline and figure out exactly how much it's going to cost you per deal.

Just dial up marketing spend and hold your team (or broker) accountable to those KPIs.

That's the "aha" moment. Leasing isn't an art, it's a process you can operationalize.

When you tell your partners "leasing is taking longer than expected," what they hear is: "We don't have a system."

But when you can say: "We're running five tours per week, converting at 20%, and we need to increase lead volume by 30% to hit our 90-day target," now you sound like a savvy operator.

The main difference is that you built the process yourself first.

Once you have the process, you can delegate execution to brokers or run it in-house.

But you can't skip building the system.

Do you have a documented leasing process? Or are you relying on brokers to figure it out as they go?

And if you've done it the other way and hired someone who successfully built your leasing system from scratch, I genuinely want to hear about it.

What made it work? What did they do differently?

Hit reply and let me know. I'm happy to be proven wrong here.

Until next Sunday.

Be well,

Saul

P.S. Missed my podcast with Paige Gunn? Here is the full episode.

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Random Saul Fact: Industrial IQ team at Bulls Game last week!