Walmart just scooped up a 160,000-square-foot shopping center in Norwalk, Connecticut, for $44.5 million (the discount giant's third retail property purchase since January, bringing its recent acquisition total to $118.1 million). The Norwalk center is anchored by Walmart's own 118,630-square-foot store and includes tenants like Ulta Beauty, Panera, and Aspen Dental. This follows a broader trend of chains from Publix to Dillard's buying their locations, echoing the old-school Sears playbook of controlling real estate destiny while collecting rent checks from co-tenants. For CRE investors watching retailers pivot from tenants to landlords, it's a data point showing that major operators increasingly see property ownership as strategic.

Manhattan's office market is having its best year since 2006, and it's leaving the rest of the country in the dust. Businesses leased 23.2 million square feet of additional office space in the first nine months of 2025 (the largest amount for that period in 19 years) fueled by financial services expansion, prime space scarcity, and the country's highest return-to-office rate at 1.3% above 2019 levels. JPMorgan Chase's new $3 billion Park Avenue tower is setting the tone with 19 food operators and meditation rooms, while CBRE reports a record 143 leases signed above $100 per square foot this year, already surpassing 2024's total. Even Class B buildings are clawing back occupancy five times faster than the national rate, while obsolete towers find new life through office-to-residential conversions. Should have Manhattan landlords feeling bullish while their peers in other gateway cities are still plodding along at 11% below prepandemic leasing levels.

The Fed's Powell is telegraphing that quantitative tightening is nearly done, with the central bank approaching its target level of "ample" reserves after shrinking its balance sheet from nearly $9 trillion to just over $6 trillion since mid-2022. Powell indicated the bond runoff program could end "in coming months" while signaling more rate cuts are on the table as labor market softness takes precedence over inflation concerns. Markets are pricing in two more cuts before year-end. The Fed's shifting stance on liquidity and rates matters for CRE capital markets, as tighter balance sheet policy has kept financial conditions restrictive even as rates come down. For commercial real estate investors watching debt markets thaw, Powell's comments suggest the worst of the Fed's tightening cycle is behind us, though he offered no promises on how far or fast rates will ultimately fall.

Chicago's first vertical warehouse is hitting the market without ever landing a tenant. This is a cautionary tale for the Midwest's multistory industrial experiment. Logistics Property Company just listed its 1.2 million-square-foot, five-level facility at 1237 West Division Street through JLL, a year after delivering the speculative development on Goose Island with 571,000 square feet of warehouse space, ramps, and parking for 1,590 vehicles. The developer dropped more than $55 million on the land and secured $150 million in construction financing to build the Midwest's answer to vertical logistics hubs popular in Asia and coastal U.S. markets, but the property remains completely vacant despite a year of marketing. With Chicago's industrial vacancy at just 5.9% versus 7.5% nationally, the struggle to lease this pioneering facility suggests tenants aren't yet sold on the vertical warehouse concept in landlocked markets where horizontal sprawl is still cheaper and easier.

Last week, my business partner Shea and I attended the inaugural Small Bay Summit in New York: a gathering of 175 fund managers, operators, and allocators all focused on one thing: small bay industrial.

The energy was... different.

Not "networking event" energy. Not "let's exchange cards and grab drinks" energy.

This was "I need to get into this space yesterday" energy.

Multi-family guys. Self-storage operators. Even a few office refugees. 

All of them were asking the same question: 

How do I get exposure to small bay industrial?

Which made me wonder: Is this just the hot new thing? A blip that'll cool off as fast as it heated up?

For years, small bay industrial was the red-headed stepchild of CRE. Institutional capital wouldn't touch it.

Too many tenants. Leases too short. Credit too sketchy.

They called it "Section 8 of Industrial."

But somewhere between 2022 and now, the narrative flipped.

Small bay isn't Section 8 anymore. It's an apartment complex for small businesses.

Same diversified income, same sticky tenancy, same upside in repositioning.
Just with businesses instead of renters (and businesses don't punch holes in drywall or skip out on rent because their boyfriend moved to Phoenix)

And the data backs it up! In 2022, the average small bay deal was $27 million. Mostly private capital, local operators, and one-off acquisitions.

Fast forward to Q4 2025: the average deal size is $144 million.

It’s not mom-and-pop money anymore, it’s institutional capital writing checks.

And it gets better. The Q4 2025 pipeline sits at $4.5 billion. If even half of that clears, you're looking at the stamp of approval that brings JPMorgan and the mega-funds off the sidelines.

This isn't a trial run anymore. This is a land grab.

So, this begs the question, what's driving the growth?

Brett Turner from BKM Capital laid out the playbook at the summit, and it's beautifully simple.

BKM buys small bay assets at market rents. They reposition with basic upgrades. Polished concrete, LED lights, white-boxed warehouses, carpet tiles. Nothing fancy, just clean and functional.

Then they re-lease.

Their lease spreads? 20% to 40% over what they paid. Add in 5% annual bumps on 3-year leases, and you're looking at 45% rent growth in a short hold period.

First-turn TI? $15/sf. 

Second turn? $2/sf.

They've also adopted an airline pricing model (the same dynamic pricing self-storage rolled out three years ago). 

Different unit sizes. Different prices. Different times. All based on real-time supply and demand.

And it's working. Legacy tenant retention sits at 65%. For post-capex tenants it’s closer to 85% retention.

Now, not everything is roses.

Leasing timelines have stretched compared to 2021-2022. But it's mostly in incubator space (units under 1,500 square feet). 

These are the startups. The PPP babies. The government-stimulus boom that's now working its way out of the system.

Units between 2,000 and 5,000 square feet? Still leasing fast. Still pushing rents.

The market is flushing out weak credit. That's healthy! That's what you want before the core funds show up.

My take: this isn't overheated. It's actually just getting started.

The thing about institutional capital is it moves in waves.

First, the value-add guys come in and prove the model. Then the core-plus funds follow. Then, years later, the core funds show up and compress cap rates into oblivion.

We're still in wave one.

Brett said it himself at the summit: core funds probably won't enter this space until the 2030s. 

That means you've got a window. A real window to buy at today's basis before the floodgates fully open.

Yes, deal volume is up. Yes, competition is heating up. But if you're sitting on the sidelines waiting for confirmation, you're already late.

The smart money isn't asking if small bay is real.

They're asking how much can I buy before everyone else figures it out?