?? Surprising tech hubs emerging across the U.S.

???Hello, Best Ever Community! The Fed stood pat on interest rates this week, but Jerome Powell indicated we could see cuts as early as September. We’ll see.

In this week’s newsletter, surprising new tech hubs emerge, we go inside the fund-of-funds model, and one investor hits a 62% IRR and 9.2x equity multiple on his first-ever deal.

?? ICYMI:? AJ Klenk of Catalyst Capital Partners joined us on the Best Ever Show this week to share how he and his firm have built a $1.3 billion Sun Belt portfolio. Listen to the full episode on Apple or Spotify.

Off we go!

?? NO-FLUFF NEWS: CRE HEADLINES

?? Signs of Life: Year-to-date multifamily absorption is up 75% compared to H1 2023 with 138,000 units absorbed. Vacancies declined by 10 bps in Q2. With the economy adding 500,000 new jobs and real wages increasing, an apartment market rebound could be on the horizon.

???Foreclosures Surge: Portfolios of foreclosed and seized commercial property reached $20.5 billion in Q2 — a 13% increase from Q1 and the highest quarterly figure since 2015. Some believe it signals the market nearing a bottom.

???Drought Ahead?: A July report from Yardi Matrix found that new multifamily deliveries nationwide will drop from 560,000 units in 2024 to 350,000 in 2026, and fall even further to 328,000 in 2027, signaling a possible multifamily drought that will push rents to new heights.

?? TOP STORY: SURPRISING TECH HUBS EMERGING ACROSS THE U.S.

As the cost of living in tech epicenters like Silicon Valley and New York City continue to skyrocket, small and medium markets across the U.S. are slowly emerging as mini tech hubs. With rare combinations of low living costs and desirable tech wages, these markets offer new opportunities to tech professionals — and as the markets grow, to commercial real estate as well.

The top three emerging tech markets are Flint, Michigan; Brownsville, Texas; and Racine, Wisconsin. Flint topped the list with 114% growth in high-tech wages from 2018 to 2023, an average weekly wage of $2,044, and 64% growth in high-tech employees. Brownsville ranked second despite a slight decrease in high-tech wages, posting a 125% increase in high-tech employees, and Racine came in third with 91.5% high-tech employee growth and nearly 20% wage growth....