Ari Parritz

After several years of volatility, we’re seeing CRE fundamentals rebalance — from retail resilience and industrial normalization to clearer pricing and more disciplined capital markets. Optimism is returning, but with intention. 🔗 Worth a read: https://ow.ly/jktT50YlbFk

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$1.7 BILLION ERASED... From 10 downtown Chicago office buildings that traded over the past 12 months. Prior Value: $2.2B Recent Trade Value: $498.5M Total Value Reset: $1.71B A few things stand out: 1. Across West Loop, Central Loop, and River North — both Class A and Class B assets are repricing. 2. This isn’t a collapse — it’s a repricing cycle. 3. Debt structures from 2012–2019 are maturing in a very different interest rate environment. Capital stacks that once worked simply don’t today. What does this mean? 1. For Tenants: Leverage and flexibility matter more than ever. Ownership changes can create opportunity — or risk — depending on how your lease is structured. 2. For Investors: Basis resets create entry points we haven’t seen in over a decade. 3. For companies planning 3–7 years out: Timing strategy is everything right now. Chicago office isn’t “dead.” It’s recalibrating. And those who understand the mechanics of this reset -- not just the headlines -- will make the smartest moves. If you’re evaluating your lease, ownership exposure, or long-term occupancy strategy, I’m always happy to compare notes. Data Behind the Reset: 100 N Riverside $22M vs $165.2M (2005) Loss: $143.2M (-86.7%) 190 S LaSalle $55M vs $230M (2019) Loss: $175M (-76%) 525 W Van Buren $35M vs $135M (2015) Loss: $100M (-74%) 125 S Wacker $53.5M vs $145M (2017) Loss: $91.5M (-63%) 33 W Monroe $21M vs $69M (2004) Loss: $48M (-69.5%) 2 N Riverside $25M vs $65M (loan valuation) Loss: $40M (-61.5%) 311 S Wacker $45M vs $302.4M (2014) Loss: $257.4M (-85%) 200 S Wacker $68M vs $214.5M (2013) Loss: $146.5M (-68%) 600 W Chicago $89M vs $510M (2018) Loss: $421M (-82.5%) 70 W Madison $85M vs $374M (2014) Loss: $289M (-77%)

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Over the past few weeks, I’ve been reviewing portfolios for properties clients acquired between 2018 and 2020. The spreadsheets are telling a consistent story across the board. Valuations are off their peaks, original low-rate debt has hit maturity, and flat or declining net operating income means refinancing at current rates is no longer a straightforward option. Sitting back and waiting for a magical turnaround isn't prudent. But assuming there is a single blanket playbook for every property is just as dangerous. One size never fits all. While broad market themes clearly exist, every asset demands its own line-by-line analysis. When we run the numbers on an existing holding, the decision comes down to micro-level mechanics. In markets like Portland proper, municipal entity taxes bite into operating income long before state personal taxes ever touch an owner's return. For one property, executing a 1031 exchange out of that local tax stack into NNN small-bay industrial or medical office makes immediate sense because it passes compounding expenses directly to tenants. For another, a low original basis or strong local tenant base might justify holding and restructuring locally. The toughest conversation right now revolves around debt maturities. If a refinance requires injecting fresh capital into a property where rents are flat and expenses are rising, you have to ask a hard question: is that cash better off preserving the current deal, or reallocated into a higher-yielding market with built-in rent escalators? My job isn't to push transactions or rely on generic brokerage rules of thumb. It's to run cold, individual underwriting on what owners actually hold today, matching their debt stack and tax profile with real market conditions. Every property needs to be evaluated on its own merits. If you are navigating maturing debt and shifting valuations on properties you've held for 5 to 7 years, let's take a look at the actual numbers. 🌐 metricrealassets.com #CommercialRealEstate #MiddleMarket #CapitalAllocation #1031Exchange #MetricRealAssets #RealEstateUnderwriting #Multifamily #IndustrialCRE #MedicalOffice

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Recent data shows renewed momentum in commercial real estate transactions, and #healthcare continues to stand out as a key driver. October saw a 28% surge in major CRE deals, powered largely by midcap activity. But what caught my eye was the sector mix: medical assets played a significant role in last month’s deal volume, highlighted by the $7.2B acquisition of 296 outpatient facilities across 34 states. Strong occupancy, resilient demand, and long-term stability continue to position healthcare real estate as one of the most durable asset classes in today’s market. 🔗 Full article via Bisnow: https://bit.ly/4pmzC33.

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As construction costs rise, the systems who need space can not make the numbers work for new construction. The best next step is to repurpose existing buildings thought to be functionally obsolete or as in the case of existing office builidings, under utilized or significantly vacant. The result is a cost efficient, like new facility, meeting the practical need and exceeding budgetary goals. Lets talk more.

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Our newest bulletin tackles a question many investors are asking: why lean into CRE now? Past cycles show that real estate recoveries and expansions have been long-lived and supported by both price gains and underappreciated income, and today's valuations suggest the current cycle is still early relative to history. With performance already diverging across sectors and regions, this phase is less about owning the entire asset class and more about being selective where you take risk. https://lnkd.in/gUYTpvfQ ​

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Looking for AI to speed up your underwriting 10x? Read this. There are 15+ new platforms right now that promise to revolutionize CRE underwriting. They will scrub your rent roll, normalize your T-12, push everything into a clean model, and even spit out a “score” or polished return metrics. On paper, it sounds like exactly what everyone wants. In reality, it is not. I have demoed these tools consistently over the past year, both for myself and on behalf of clients. Usually 1 to 2 per month. Different teams, different approaches, same pitch. You probably don’t have the time to do this, so I’ll give you the answer: Not one has done something truly novel within the actual practice of underwriting. They are cleaner. Faster. Sometimes more automated. But they are not better. At best, they are a cheaper and more scalable version of RedIQ, which is valuable. Standardizing data, speeding up inputs, and reducing manual cleanup matters. But every platform is doing some version of that. And that is where the value stops. Because underwriting is not a data formatting problem. It is a judgment problem. It is knowing when a T-12 is lying to you. It is understanding why occupancy is trending the way it is. It is recognizing when a deal works in Excel but breaks in reality. No software I have seen solves that. And more importantly, there is real risk in adopting one right now. There is so much competition that: A. The company may not be around in 24 months B. Your data is now locked in their ecosystem C. The next platform that actually gets it right will not have a clean way to pull your data over So you end up rebuilding anyway. Or worse, trusting outputs you should not. Right now, these tools are selling speed. But speed without control is dangerous in underwriting. If anything, the best use of AI today is not replacing your model. It is augmenting your workflow: - Cleaning raw data faster - Flagging inconsistencies - Helping you pressure test assumptions - Accelerating repetitive pieces of the process But the core underwriting still lives with you.

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According to Kaufman Hall, announced hospital and health system deals fell to 46 last year, down sharply from 2024. But the story isn’t just fewer transactions. What changed: • Financial distress drove over 40% of deals • Activity was back-half weighted, with Q4 carrying more than half of total deal value • For-profit systems were sellers far more often than buyers • Capital continued shifting toward ambulatory, lab, and behavioral health platforms

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In private equity real estate, the issue usually isn’t a lack of data. It’s disconnected data. When key asset management inputs live across PMCs, Excel models, debt records, and multiple systems, teams spend too much time reconciling and not enough time driving performance. That is exactly what we cover in our latest blog post, which breaks down what data silos really cost asset management teams — and why bringing everything together changes the quality and speed of decision-making. Read it here: https://hubs.li/Q046s6Z40

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