The multifamily sector just posted its strongest Q2 absorption on record. CBRE data shows net absorption outpaced new supply for the fifth straight quarter, pushing vacancy down to 4.1% (well below the 5% long-term average) and finally nudging rents up 1.2% year-over-year after two years of stagnation. The dried-up construction pipeline - thanks to those stubborn high interest rates - delivered just 83,000 units in Q2, down from 2024's record 450,000 annual completions. Bottom line: apartment owners who weathered the supply tsunami are about to enjoy one of the tightest rental markets in a decade.

Wall Street's betting the farm on data centers - spending just crossed $40 billion and is about to overtake office construction for the first time ever, while traditional office spending has nosedived from $65 billion to $44 billion since 2021. The Magnificent Seven are dropping a staggering $400 billion on AI infrastructure this year, with these power-hungry server farms already consuming 5% of America's electricity (headed to 10% by 2030). The real question is whether this AI gold rush is building tomorrow's infrastructure or just temporary hype. For CRE investors, the message is clear. The future of commercial real estate may run on GPUs, not cubicles.

The Fed's September meeting has CRE investors on edge, with Treasury Secretary Bessent pushing for aggressive half-point cuts while inflation data keeps throwing curveballs. July's CPI showed services inflation jumping unexpectedly, even as overall inflation held at 2.7%. The Producer Price Index also surged 0.9% monthly, the sharpest rise since March 2022, complicating Powell's path forward. My hunch? We're getting a quarter-point cut in September, not the half-point some are hoping for. The Fed's too spooked by sticky services inflation to go big, despite White House pressure for rates as low as 1%.

Chicago commercial property owners are getting crushed by taxes hitting 4% of property value (more than double the 1.81% national average) and Mayor Brandon Johnson might be gearing up for another tax hike attempt after his $300 million proposal got unanimously rejected last year. The Lincoln Institute study shows these rates are driving businesses out and deepening neighborhood inequalities, with the city's $11 billion pension hole only getting worse after Governor Pritzker just enhanced police and firefighter benefits.  For CRE investors, Chicago's becoming a market where only the strongest balance sheets survive, and that's creating some interesting repricing opportunities.

In 2022, Blackstone bought PS Business Parks for $7.6 billion.

Buried in that portfolio was something interesting: a massive collection of small bay flex properties.

That was the shot heard 'round the commercial real estate world.

Fast forward to today. BKV just deployed $2.5 billion into small bay last year. 

This year? They're on pace for $4 billion (they raised a $1.5 billion equity slug just for this).

I've seen this movie before.

Blackstone created Invitation Homes to buy houses in 2012. Everyone thought they were crazy. They were the smartest guys in the room.

Same pattern with apartments in 2013. Self-storage in 2017. Traditional industrial in 2019.

Each time: Big money discovers a fragmented asset class. They roll it up. Values explode.

Small bay is next.

Here's why institutions are piling in now:

We're still in the first inning.

Pricing is fragmented. Nobody knows exactly what these are worth. 

In 36 months, every property will be precisely valued and efficiently marketed.

The arbitrage will be gone.

But the institutions need product. When Blackstone wants another $10 billion of small bay, where will they shop?

From operators who've already aggregated, raised rents, and stabilized properties.

They'll pay a premium for scale.

Build your portfolio before the institutions vacuum up everything.

In 24-36 months, you'll have two choices: Hold and compete with billion-dollar funds for acquisitions, or sell your stabilized portfolio to them at a premium.

Either way, you win. But only if you move now.

Knowing about it and actually executing are two different things. 

For those that are ready to take action, we're bringing together 30 serious operators for our Industrial IQ Bootcamp. 

We’re not gatekeeping anything. You’ll get all the ‘secret-sauce’ for small bay investment. 

We’re diving deep into acquisitions, ground-up development tactics, modern leasing tools, and operational strategies that actually work. 

We’re limited to 30 people who are ready to move on this opportunity, so, if you’re interested, you should apply sooner rather than later.

I hope to see you there!