Federal workers are returning to offices at unprecedented rates following Trump's return-to-office mandate. Gallup data shows 46% of federal employees now work on-site full-time, up from just 17% at the end of 2024, while hybrid arrangements dropped from 61% to 28%. The shift affects thousands of government-occupied buildings across DC and federal hubs nationwide, potentially stabilizing office markets that have struggled with occupancy since 2020. For CRE investors holding office-heavy portfolios, the mandate confirms that government tenants remain reliable anchors, particularly in uncertain market conditions.

Global CRE transaction volumes reached $791 billion from January - June this year, up 15% year-over-year, but the recovery isn't as strong as it appears. The actual number of deals fell 1%, meaning the volume increase comes entirely from higher prices rather than increased activity. For investors seeking evidence of a genuine CRE recovery, rising transaction counts (not just higher prices) will be the key indicator to watch.

The Federal Reserve's July meeting minutes flag "elevated asset valuation pressures" driven by AI optimism, echoing concerns last heard during Alan Greenspan's 1996 "irrational exuberance" speech. The S&P 500's Shiller CAPE ratio sits near 21st-century highs, yet history shows markets can run much higher (stocks surged 220% after Greenspan's warning before the 2000 dot-com crash). The parallel matters for CRE investors benefiting from AI-driven demand for data centers and tech office space. While elevated valuations don't guarantee an immediate correction, they suggest increased volatility ahead across all asset classes.

Chicago has captured 10% of total U.S. third-party logistics leasing activity year-to-date in 2025, ranking second nationally only behind the Inland Empire. The I-55, I-80, and O'Hare corridors lead the market as 3PL operators leverage Chicago's central location and access to 37 million Midwest consumers. The sustained demand from logistics users reinforces Chicago's strategic importance in national supply chains. For investors targeting Chicago industrial assets, the concentration of 3PL activity in these established corridors suggests continued rent growth and low vacancy rates, particularly for modern big-box facilities near major interchanges.

Today, we’re walking through one powerful ingredient of our “secret sauce.” It’s a value creation strategy that has become a cornerstone of our investment model.

You see, most small bay industrial properties trade hands with gross leases where tenants pay one flat monthly amount and the landlord covers all operating expenses. 

When you buy these properties, you're inheriting a structure that caps your value potential.

Triple net leases, however, split the payment into base rent plus the tenant's share of property taxes, insurance, and maintenance costs (CAMs or Common Area Maintenance). 

These properties command premium valuations because buyers pay lower cap rates for predictable income streams where operating expenses pass through to tenants.

When a unit becomes vacant, we convert those gross leases to NNN. 

We market it with a simple monthly payment (say $3,000) just like tenants expect. But when we draft the lease, we structure it as triple net: $2,200 base rent plus $800 in CAMs (Common Area Maintenance). 

The tenant still writes one check for $3,000. From their perspective, nothing has changed from a traditional gross lease.

Your property valuation, however, transforms completely. 

Under a gross lease, your Net Operating Income fluctuates with operating expenses. It can explode from $2.00 per square foot five years ago to $3.50 today. 

Under triple net, your NOI becomes the stable base rent figure that appraisers and buyers value at significantly lower cap rates.

The financial impact is substantial. 

Converting a 30,000 square foot building from gross to triple net at current CAM rates can add $300,000-500,000 in value instantly.

Every thousand dollars in monthly rental income translates to roughly $100,000 in property value, and this strategy captures that value without raising rents.

Small bay tenants (contractors & small businesses) care about their total monthly payment, not lease structure. 

You quote one number, they pay one number, and the triple net structure exists only in the paperwork. 

This approach works particularly well when leasing directly without brokers (which we do 90% of the time). It allows us to avoid the lengthy negotiations about CAM caps and escalations that typically arise in those deals.

The strategy has become so central to our model that we now target properties specifically for this conversion opportunity.

We can model deals to achieve a 11-12% cap on a stabilized basis within just two years purely through this paper restructuring.

While everyone else is chasing the perfect building or the perfect location, sometimes the real value is in reimagining how the existing income gets structured.

Look for these paper-to-profit opportunities in your own portfolio, they may be more common than you think!