JF 4028: Cap Rates Elevated, Construction Pullback and Positive Leverage Returns with John Chang

The Best Ever CRE Show

Best Ever CRE

Investing, Entrepreneurship, Business

4.7 • 996 Ratings

🗓️ 14 September 2025

⏱️ 35 minutes

🔗️ Recording | iTunes | RSS

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Summary

On this week’s episode of The Horizon, John discusses why inflation is rising in a slow “trickle,” with food prices leading the gains, and how this feeds into rising odds of Fed rate cuts and a ~4% 10-year treasury. He explains why today’s financing window—around 5% for agency multifamily—creates rare positive leverage and is already sparking activity. With construction starts falling and labor/material costs high, John outlines a favorable long-term setup: tighter future supply, elevated cap rates, and improving fundamentals. He also maps the risks (recession, weaker jobs data) and where to focus: Class A/B multifamily, necessity retail, medical office, and storage—while flagging trade-exposed West Coast industrial and some discretionary retail, and noting office as a potential “dark horse” on rising RTO pressure. This is a limited time offer, so head over to aspenfunds.us/bestever to download the investor deck—or grab their quick-start guide if you’re brand new to oil and gas investing. Visit investwithsunrise.com to learn more about investment opportunities. Get 50% Off Monarch Money, the all-in-one financial tool at www.monarchmoney.com with code BESTEVER Get a 4-week trial, free postage, and a digital scale at ⁠https://www.stamps.com/cre⁠. Thanks to Stamps.com for sponsoring the show! Join the Best Ever Community The Best Ever Community is live and growing - and we want serious commercial real estate investors like you inside. It’s free to join, but you must apply and meet the criteria. Connect with top operators, LPs, GPs, and more, get real insights, and be part of a curated network built to help you grow. Apply now at ⁠www.bestevercommunity.com⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	You've probably noticed this. Despite all the headlines about record investment in renewables,
0:04.8	the world still runs on oil. In fact, demand keeps climbing. But here's what most investors don't
0:10.8	realize. A lot of institutional capital has actually pulled back from oil and gas because of
0:15.8	ESG mandates and political pressure. That's created a huge gap in production and a big opportunity for
0:22.1	individual investors. That's where Aspen's oil and gas fund comes in. Their last fund has
0:27.4	delivered six straight quarters of 15% annualized cash yield from producing oil wells. With their
0:33.3	current fund, they're targeting 29% cash on cash returns in over 10 years and 8.83 times equity
0:39.9	multiple. I've personally been impressed with the way Aspen approaches a space balancing the
0:45.1	stability of producing wells with the upside of carefully selected drilling projects. And here's a
0:50.7	bonus for best ever listeners. Aspen has lowered their minimum investment from $150,000
0:55.8	down to $100,000. One of their investors, Terry, put it best. We were new to oil and gas
1:02.1	investing and quickly found Aspen's approach sound. We've been very satisfied with the experience
1:07.6	and delighted with the returns. This is a limited time offer, so head over to
1:11.9	Aspenfunds.us. us forward slash best ever to download the investor deck or grab their
1:17.7	quick start guide if you're brand new to oil and gas investing. Welcome back, Best Ever listeners,
1:22.9	to the Horizon podcast. I'm John Chang, and I've been active in real estate investing most of my life.
1:31.2	Since 2007, I've been leading the Research and Advisory Services team at Markison Millichap,
1:38.0	the leading commercial real estate brokerage company. And as I say every week,
1:43.7	what I'm saying on this podcast is being done independently,
1:48.2	and it does not reflect the opinions or positions of Marcus and Milichap. So this week, I'm going to
1:56.7	focus in on what's happening with inflation. Talk a little bit about that. Talk about the Fed and
2:02.6	interest rates and then ultimately how all of this is shaping the commercial real estate outlook.
	...

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