The Best Ever Conference returned for its ninth installment in March 2025, with BEC IX featuring an impressive cast of commercial real estate experts and nearly 1,000 active and passive investors.
While the attendees enjoyed world-class networking, partner-hunting, and collaborative conversations, on the big stage, speakers shared insights on everything from artificial intelligence, the Trump administration, and the volatile insurance industry and how each will continue to impact commercial real estate.
Here are some highlights from Day Two of the conference.
Russell Gray: What Trump 2.0 Means for Main Street
Russell Gray, founder of Main Street Capitalist, took the stage at BEC IX to offer a pragmatic assessment of how President Donald Trump and his administration's economic policies might impact commercial real estate investors.
Rather than focusing on political positions, Gray approached Trump's strategy as that of a "builder" who is systematically addressing various components of economic cost to fight inflation — which he identified as the "fire-breathing dragon" that could ultimately determine the administration's success or failure. One of Gray’s underlying messages was that investors need to set aside personal political feelings and instead analyze policy shifts objectively to position themselves advantageously in a rapidly changing environment.
Here are some other key takeaways from Gray’s session:
Trump Is Systematically Targeting Components of Cost: Gray outlined how Trump is attacking multiple cost drivers simultaneously, including unproductive government spending, energy costs, regulatory compliance, taxes, interest rates, commodities, transportation, and labor costs. The goal is to create "deflationary pressure" that offsets the inflation that typically comes with economic growth, allowing the economy to expand without triggering interest rate hikes.
Trump Is Accelerating Policy Implementation with Urgency: The administration is moving aggressively because of the historical pattern where incumbent presidents typically lose control of the House at midterms. This creates a two-year window rather than four years to implement major policy changes, explaining the rapid-fire approach to executive orders, regulatory changes, and policy shifts.
Energy Independence and Production Is a Cornerstone Strategy: The "drill baby, drill" approach aims to reduce energy costs across the entire economy, creating investment opportunities in energy production regions and related industries. This policy direction signals potential investment opportunities in energy-rich regions and supporting industries.
Manufacturing Reshoring Is Being Incentivized Through Tariffs and Transportation Policy: Gray views the tariff policy less as revenue generation and more as behavioral incentives to bring manufacturing back to the United States. He cited recent major investments from companies like Taiwan Semiconductor and Honda as evidence the strategy is already having an impact.
Monetary Policy May Be Shifting Toward Gold: Gray highlighted actions like auditing Fort Knox and gold repatriation as potential signals of a move toward some form of gold backing for the dollar, which would represent a fundamental shift in the monetary system in place since 1971.
Conclusion
For multifamily investors, these policy changes suggest opportunities in markets positioned for manufacturing growth, energy production, and supporting industries. Gray advised investors to stay alert to where capital is being directed through tax incentives, study trade publications to identify emerging manufacturing hubs, and understand the employment base of their tenants.
Most importantly, he emphasized that real estate on Main Street offers stability during economic transitions that paper assets on Wall Street cannot match – making it crucial to emphasize risk-adjusted returns rather than simply competing on ROI.
Jerry Messick: What’s Next for Property Coverage in 2025
Jerry Messick, a 41-year veteran in captive insurance management, provided BEC IX attendees with a comprehensive analysis of the property insurance market, discussing its volatility and sharing actionable strategies CRE investors can take to tame the market.
Messick framed the current insurance challenges as part of a historical pattern, but emphasized that climate-related disasters have accelerated price increases and created a more unpredictable marketplace for property owners. He insists on helping investors shift from being passive "buyers of insurance" to strategic "sellers of risk."
Here are some other key takeaways from Messick’s talk:
Insurance Markets Follow Cyclical Patterns That Are Intensifying: Messick illustrated how insurance markets historically operate on a boom-bust cycle of "cash flow underwriting," with carriers raising rates after losses, then competing for market share until rates drop too low. However, since 2000, these cycles have compressed dramatically due to the increasing frequency and severity of billion-dollar weather events, resulting in 25 consecutive quarters of rate increases across property and casualty lines.
Large Insurers Use Premiums Universally Regardless of Your Specific Risk: Even if your properties aren't in high-risk areas, your premiums help pay for disasters elsewhere. Messick noted that California wildfires alone consumed 35% of all European reinsurance capacity, affecting pricing globally. This cross-subsidization means good properties in safe areas are essentially funding losses for riskier assets.
Stop Paying Commission-based Broker Fees: Messick challenged the traditional broker compensation model, noting that commission-based arrangements mean brokers get raises with each premium increase. He advised replacing percentage commissions (typically 10-15%) with flat fees (4-6%), and demanding transparency about contingency bonuses brokers receive from carriers for profitable books of business.
Higher Deductibles Should Be Strategic, Not Reactive: Since 45-55% of premium costs fund the first million dollars of coverage, small deductibles ($5,000-$10,000) no longer impact pricing. Messick recommended considering deductibles of $100,000-$500,000 where feasible, paired with dedicated reserve accounts to fund potential losses, giving investors more control over their risk financing.Alternative Risk
Financing Options Exist for Various Portfolio Sizes: For larger investors, Messick outlined options including self-insured retentions (distinct from deductibles), group captives that provide direct access to wholesale reinsurance markets (bypassing retail carriers' 35-45% expense ratios), and fronting arrangements that satisfy lender requirements while allowing investors to retain and manage their own risk.
Conclusion
For multifamily investors, the message was clear: taking control of your insurance strategy can significantly reduce costs and improve stability. Rather than passively accepting premium increases, investors should demand transparency about loss history, implement rigorous property inspection programs, establish dedicated claim reserves, and explore alternative risk financing structures.
Most importantly, Messick emphasized that investors of all sizes can benefit from shifting their mindset from simply purchasing policies to strategically managing and financing their specific risk profile.
Multifamily Panel: Bulls, Bears, and Operational Excellence in Today's Market
BEC IX brought together a panel of experienced multifamily operators with a combined ownership of approximately 20,000 doors to discuss the current state of the asset class. Moderated by Matt Faircloth, the conversation featured diverse viewpoints from three multifamily powerhouses:
- Charlie Young: Managing partner at Madera Residential
- Frank Roessler: Co-founder and CEO of Ashcroft Capital
- Josh Friedensohn: Founding partner of Greenleaf Management
The trio primarily discussed whether multifamily remains a viable investment in today's market. And rather than presenting a unified bullish narrative, the panel offered nuanced perspectives on timing, geography, and operational strategies that can still drive success despite market headwinds.
Here are a few key takeaways from the panel discussion:
The Timing Debate: Bull vs. Bear: Charlie Young presented a "delayed bull" perspective, predicting a significant buying opportunity within the next six months due to maturing debt that many owners won't be able to manage. Frank Roessler shared a bullish view focused on lender workouts eventually yielding distressed opportunities. Contrasting these positions, Josh Friedenson revealed his company has been net sellers of multifamily for six years, citing concerns about risk-reward at current cap rates and negative trends in expenses, rents, and interest rates.
Supply and Demand Fundamentals Remain Strong: Despite short-term challenges, the panelists agreed that multifamily benefits from strong long-term fundamentals, particularly in Sun Belt markets experiencing corporate relocations and in-migration. Construction starts are down 80% from peak levels, which will eventually create favorable supply-demand dynamics. Charlie predicted the next few years could see unprecedented rent growth as this supply shortage compounds.
Asset Class Stratification Is Increasing: Charlie highlighted how the market has evolved from a simple "luxury vs. workforce" housing model to three distinct segments: low-income workforce housing, moderate-income "attainable living," and luxury apartments. The panel suggested that while C-class properties face significant margin compression, A and B-class properties may offer better risk-adjusted returns in the current environment.
Ashcroft's International Procurement Strategy: Frank Roessler detailed Ashcroft's innovative procurement process where they purchase renovation materials directly from manufacturers in Vietnam and India. They buy $3-5 million of inventory on their balance sheet, covering 82 different SKUs including fixtures, faucets, and lighting.
These materials are stored in a Dallas warehouse, assembled into standardized "kits" for various unit types, and distributed to properties. This approach yields approximately 30% cost savings compared to traditional suppliers like HD Supply while allowing for higher-quality materials.
Regarding tariffs, Roessler explained they've strategically avoided purchasing from China (where the new 10% tariffs apply), instead focusing on Vietnam, Taiwan, and India. He noted that many Chinese manufacturers have already relocated to these countries to avoid existing tariffs.
Additionally, their current inventory stockpile means they won't need to make major purchases until late 2025, giving them time to adjust to changing trade policies.
Retention as a Core Strategy: Josh Friedenson emphasized retention as his company's primary focus, maintaining 70-80% retention rates versus the industry average of 50-55%. Their strategy includes focusing on family-friendly two and three-bedroom units, pricing for value rather than maximum rent growth, and creating community through regular events like turning properties into summer camps for residents' children. Frank and Charlie agreed that building community increases safety and stability while reducing turnover costs.
Conclusion
For multifamily investors, the panel highlighted that success in today's market requires operational excellence rather than simply buying at a low enough price. While Josh's company has found better risk-adjusted returns in other asset classes, both Frank and Charlie remain committed to multifamily with strategies focused on tenant retention, strategic procurement, and positioning for the supply-constrained future they anticipate.
As Charlie summarized, despite recent challenges, "This is a phenomenal market. It's a phenomenal space," suggesting that current headwinds are temporary for those with the right operational approach and market positioning.
Further insights from BEC IX:
Day One Recap
John Chang's 5 Bold Predictions for 2025
Joe Fairless's Keynote: How to Thrive in '25
