🗞️ News & Moves 🏠

US Home Sales Increase After Worst Year Since 1995 (Bloomberg)

In a year that felt like a housing hangover, hope has resurfaced.

December saw a 2.2% bounce in existing-home sales, marking three months of momentum.

The market is showing signs of revival as it prepares for a rebound.

Mortgage rates hit 7%.

Buyers adapt, but the market struggles.

Median sales prices?

A record-breaking $404,400.

Inventory?

Down 13.5% for the month, but still higher than a year ago.

Optimists believe a turnaround is near, but rates may stay over 6% for years.

This isn’t a thrilling rocket launch; it’s more of a steady climb out of the mud.

ChatGPT falls from the top App Store spot, marking AI's rapid power shift. (CNBC)

A new Chinese AI startup, DeepSeek, knocked ChatGPT off the App Store throne, sending shockwaves through the industry.

Wall Street took a hit—Nvidia tumbled 10%, and tech giants scrambled to respond.

The secret?

A lightning-fast, open-source model that rivals the best, built at a fraction of the cost.

Even the White House is getting involved, with a $100B AI investment push to stay ahead.

The AI race isn’t slowing down—it’s accelerating.

And the biggest shake-ups might still be ahead.

🚨 The Fed Pulse 🚨

No surprises from the Fed this week—they held rates steady, just as most expected.

The numbers do not justify a cut yet, and recent inflation data might have them feeling uneasy.

That said, the economy is improving.

Leading indicators look solid.

Housing permits are up.

Single-family permits increased by 2.6% in December, a rare gain for the season.

Multifamily permitting is also reversing its decline.

Meanwhile, new home sales in Q4 hit their highest level in 27 months.

GDP data was steady, growing as expected.

It is clear that consumers are driving this growth, favoring services over goods.

Inflation, however, ticked up slightly—core PCE inflation reached 2.5% in Q4, up from 2.2% prior.

That’s enough to keep rate cuts on hold for now.

Mortgage rates remain above 7%, and long-term yields aren’t signaling much relief.

The Fed may have room to act in early 2025, but they’re playing the long game.

Expanding Zoning Uses for this Deal was a Game Changer

Confession time.

I’m home alone with three kids this week, running on a brutally tight schedule.

I have 3 hours to make this count.

So, here’s my promise: in five minutes, you'll learn something practical, maybe even game-changing.

Today, I want to talk about one of the most elusive and high-impact strategies in real estate: rezoning.

Rezoning is less of a step-by-step process and more of an art form.

It’s the top-tier value-add play in real estate—the kind of move that can unlock 10x multiples.

And it all starts with a bold vision for what a property could be.

Robert F. Kennedy once said, “Some men see things as they are and ask, ‘Why?’ I dream things that never were and ask, ‘Why not?’”

That’s exactly what rezoning is.

It’s the art of showing lawmakers and communities that the existing potential of a property pales in comparison to what it could become under your vision.

Let’s break this down.

The Russ Technology and Innovation Center Deal

In November 2023, we bought the 195,000 sq. ft. Russ Technology and Innovation Center (drone video) from Ohio University.

This research park sits on a 29-acre lot and consists of eight buildings.

We paid $4.5M ($23/sq. ft.).

If this were an office building, it would’ve been a so-so deal.

If it were small-bay industrial, we’d be printing money.

But this wasn’t either.

It was a research park—heavy on office, with some warehouse and lab space.

The property had a strong legacy.

Fritz Russ developed it and later donated it to Ohio University.

But by the time we got to it, half the space was vacant, the buildings were outdated, and the zoning uses were vague at best.

We inherited a few strong national tenants in engineering and defense.

But, there wasn't enough demand for lab and R&D space.

At the same time, we knew there was great demand for small-bay office/warehouse space in the area.

The market wanted flex space.

This property wasn’t zoned for it.

But we took the risk and closed without contingencies, knowing we’d have to fight to expand the zoning uses.

 Executing the Vision

Right after closing, we got to work.

We demoed outdated offices and sliced the buildings into 3,000–5,000 sq. ft. ft. bays, installing garage doors, and converting the space into small-bay flex (property website).

Leasing interest came fast.

But then came the problem: pushback from zoning.

The original zoning uses were vague, but it was still clear enough that many of our new tenants didn’t fit within the permitted uses.

If a space didn’t look like a laboratory, zoning questioned whether it should be allowed at all.

We knew what we had: a property with huge demand for what community needed. (Loopnet Listing)

Now, it was up to us to make the case—and get the zoning to see what we saw.

Expanding Zoning Uses

Step one was assembling the right team.

We hired the best land-use attorney in town, an architect, and two local government consultants to lobby for us.

Together, we built a plan to get the zoning use modified.

Next, we met with the township development director in July of this year.

We threw the kitchen sink —100+ possible uses—knowing we’d have to negotiate down.

After the first meeting, we trimmed it to about 80.

With a better list, our attorney filed the application to modify uses and sent notices to adjacent property owners.

The first real test came in October when we went before the zoning board for a public hearing.

We didn't realize it at the time, but we had terrible luck with scheduling.

We were slotted right after a heated debate on a controversial development.

The room was tense, and even though our project had nothing to do with that one, we got caught in the crossfire.

For the first hour, it felt like we were being lumped into an entirely different battle.

But as the meeting went on, we managed to shift the conversation back to reality: we weren’t asking to build something new.

We were simply trying to bring life back to an existing, underutilized property.

After a long debate, we finally got approval to move forward to next review.

The next 2 meetings were the planning commissions—regional and local.

This is where things got really tactical.

At these meetings, we brought tenants with us—real businesses that needed space and supported our vision.

At each step, our list of uses kept shrinking.

Retail-related uses were removed because of concerns about traffic and parking.

But we got a recommendation to approve with some revisions.

By January, we were back in front of the zoning commission.

This was the same board that had given us the most heat back in October.

But this time, the planning commission's recommendations helped.

The conversation was more productive.

We won approval with some guardrails—office/warehouse tenants over 10,000 sq. ft. would need conditional approval.

All automotive uses were removed. This was a big loss for us, given local demand.

And we moved to the last step of approval process - Trustees Meeting.

The moment of truth was this past Monday.

We showed up prepared.  (Board Review Packet)

No public opposition (huge win).

We presented letters of support from community leaders.

Our case was strong, but you could still feel the tension.

For a while, it seemed like the trustees were split.

Then, after a long discussion, we reached the deal:

✅ Office-warehouse use approved, with conditional approval for tenants over 10K sq ft.

✅ Automotive use reinstated—but limited to customization shops only (no engine work, no outdoor activity)

✅ And a total of 29 newly approved uses (Approved Zoning Case pdf)

That was it.

This legislation turned on the switch for property demand.

We end up on local news. (DaytonDailyNews)

I just talked to my team and we now have five scheduled tours lined up for next week.

Land value became 2x-3x more valuable.

And this property will be full in next 12-18 months.

The Takeaways

If you ask for too much, you’ll get denied outright.

If you ask for too little, you leave money on the table.

Structure your app to allow compromises along the way, without losing your core goal.

And at the end of the day, everyone has to give a little to win a lot.

We worked with the township to find a solution that protected the community while unlocking new potential.

That’s the real game of rezoning.

So what’s next?

Can't wait to get this property filled.

I'll write another post when it's done.

That's it for today.

Got questions or want to dig deeper?

Hit reply.

(I read every email and care about your success).

Be Well,