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How We Think About Development in America’s Fastest-Growing State

By LRE Companies,

Utah doesn’t whisper its ambitions. The numbers announce them. The Beehive State has consistently grown in population to earn a permanent place at the top of the national growth rankings. As of the most recent U.S. Census Bureau data, it is the fifth-fastest-growing state in the country, and its real GDP growth rate led the nation at 4.5% in 2024. The state’s nominal GDP crossed $300 billion for the first time in history. Unemployment sits at 3.1%, well below the national rate of 4.0%. These are not the statistics of a market you watch from a distance. These are the numbers that tell a developer where to be.

Here is how we think about it.

The Demand Story Is Structural, Not Cyclical

The first question any developer should ask about a market is whether the growth is real or borrowed. In Utah, the answer is unambiguously the former.

Utah’s population reached approximately 3.55 million as of mid-2025, up more than 18% over the past decade alone. Utah County, anchoring the Provo-Lehi corridor and the state’s booming tech sector, added nearly 16,000 residents in a single year, accounting for 36% of the state’s total growth. Cities like Saratoga Springs and Eagle Mountain, which barely existed three decades ago, are now among the fastest-growing communities in the country, posting annual growth rates of 8.4% and 6.8%, respectively, in 2025.

Crucially, this growth is not purely migration-driven, which would make it more susceptible to economic shocks. Natural population change, with more births than deaths, now accounts for 57% of Utah’s annual growth, a structural demographic tailwind that holds up across economic cycles. A young, family-forming population base creates durable, compounding demand for housing, services, hospitality, and the built environment broadly.

For a developer, that distinction matters enormously. Markets built on migration alone can reverse. Markets built on natural demographic vitality don’t.

Where We Focus — And Why

Not all of Utah’s growth is created equal, and our playbook reflects that geography matters as much as headline statistics.

The Wasatch Front remains the economic engine. Salt Lake, Utah, Davis, and Weber counties together account for two-thirds of the state’s annual population growth and the vast majority of its job creation. Utah’s information technology and professional services sectors — clustered in what’s increasingly called the “Silicon Slopes” corridor — have made outsized contributions to GDP, with the information industry growing to more than 2.7 times its 2015 output as of 2025. Construction costs on the Wasatch Front range from $280 to $550 per square foot for residential development, reflecting both the depth of demand and the constraints of a market that, by some estimates, is short by more than 37,000 housing units.

Washington County and St. George arguably represent the most compelling secondary market in the Mountain West. Washington County posted 2.3% population growth over the past year — among the highest in the state — and St. George ranked third statewide in residential permit activity. The combination of year-round sunshine, proximity to recreation, second-home demand, and retiree migration creates a hospitality and mixed-use opportunity that few comparable markets in the country can match.

Emerging ring counties — Tooele and Iron, each posting 3.0% population growth over the past year — are attracting our attention as well. These are the markets where land basis still makes sense, entitlement timelines are more manageable, and the Wasatch Front’s overflow growth is inevitably landing.

The Hospitality Lens

Utah’s five national parks, world-class ski resorts, and growing convention infrastructure drive leisure demand that spans the year rather than concentrating in a traditional peak season. At the same time, the Silicon Slopes tech corridor has built a legitimate corporate travel base — business demand that stabilizes performance across cycles when pure leisure markets soften.

Nationally, the lodging market has shown steady resilience. ADR and RevPAR have stayed near record levels through 2025, with upper-midscale and upscale select-service properties — our target segment — continuing to outperform. The select-service model aligns well with Utah’s growth profile: it serves both the business traveler driving Highway 15 between Salt Lake and Provo and the family road-tripping from Zion to Bryce. That dual demand base is rare and valuable.

We focus our hotel development on submarkets where demand generators are layered — proximity to employment corridors, access to recreational assets, and positioning within growing residential catchment areas. A hotel built purely on ski demand is a seasonal bet. A hotel built where skiing, business travel, and a growing residential population converge is a fundamentally different underwriting story.

What We Respect About This Market

Utah rewards patience and punishes shortcuts. Entitlement processes are increasingly complex as communities grapple with rapid growth and strained infrastructure. The state needs about 28,000 new housing units per year just to keep pace with population growth — yet residential permitting has contracted, falling to roughly 22,000 units in 2024, the lowest since 2016. That supply-demand gap has consequences for commercial development too: labor is tighter, construction costs are higher, and community sentiment toward new development is more nuanced than the growth headlines suggest.

We don’t ignore those friction points. We build them into our underwriting, timelines, and community engagement strategies. The developers who treat Utah as an easy market because the population curve points up are the ones who get surprised by permitting or stabilization.

The developers who do the hard work of understanding which submarkets, product types, and demand generators are truly durable — those are the ones building the portfolio this market deserves.

CategoriesNews & Blog

Nyah Patel – Internship Interview

By LRE Companies,

At LRE & Co, mentoring the next generation has always been more than a good idea — it’s a genuine passion. We believe that the lessons learned early in a career can shape a person for life. I started my first job at 15½, working at McDonald’s, and the values that experience instilled in me — hard work, accountability, and showing up — still guide everything I do today. That’s why we are committed to building a robust internship and mentorship program that gives young people real, hands-on experience in real estate development throughout the year. We want students to leave our doors with a lasting skill set, a stronger professional foundation, and a genuine understanding of how this industry works.

Today, we are proud to welcome Nyah Patel to the LRE family. Nyah has hit the ground running — diving into tenant research, sharpening her professional communication skills, and bringing an energy and curiosity that has impressed our entire team. We hope this experience is the foundation of something lasting for her.

Here’s what she had to say about her time with us so far.

What made you interested in interning at LRE?  I’ve always been interested in business and in learning how different buildings and developments come to life. When this opportunity was offered to me, I was very excited to gain hands-on experience in a real professional environment.

What kind of work have you been helping with so far? I’ve been researching potential tenants for our development sites, which has given me a closer look at how the leasing and retail sides of real estate work.

What has been the biggest thing you have learned during your internship? I’ve learned how to stay focused and organized in a professional setting. I’ve also developed practical skills in professional communication, such as writing effective emails and understanding how important it is to follow up consistently.

What part of the business has been most interesting to you: hotels, retail, restaurants, construction, finance, or operations? Finance and retail have stood out the most to me. Both areas feel closely connected to the bigger picture of how a development comes together and succeeds.

What is one task or project that surprised you? I was surprised by how much persistence it takes to move a deal forward. If you want something to happen, you have to keep pushing and reaching out because these deals don’t close on their own.

What skill do you feel you are building through this internship? I’m building confidence in communicating professionally with adults and learning how to ask the right questions. I’ve also improved my ability to research thoroughly and develop a solid understanding of topics I wasn’t familiar with before.

How is working in a real business environment different from school? In school, you’re usually given clear instructions to follow. But here, you have to think independently and approach problems creatively. 

What have you learned about responsibility, communication, and deadlines? I’ve learned that communication is everything, including asking questions and staying in contact with your team, which shows dedication and keeps things moving. I’ve also taken on a greater sense of responsibility, knowing that my work affects not just me but the people I’m working with.

What is something you understand better now about real estate development? I have a much better understanding of the full process behind how the buildings around us are developed and just how long and complex that process really is.

What advice would you give another high school student starting their first internship? Never stop asking questions, as it’s one of the most valuable lessons I’ve learned. It shows that you care and helps you gain a better understanding of whatever you’re working on. 

What has been your favorite part of the internship so far? My favorite part has been learning about the many steps involved in developing a building. There’s so much more to it than most people realize, and seeing that process up close has been really eye-opening.

What do you hope to learn by the end of your internship? I hope to leave as a stronger communicator and a more creative thinker. I hope to approach challenges with confidence and find solutions that aren’t always obvious at first.

 

CategoriesNews & Blog

The Case for Select-Service Hotels: Why Smart CRE Capital Is Moving Into This Sector

By LRE Companies,

In commercial real estate, the search for yield rarely comes with simplicity. Most asset classes that deliver strong returns also carry complexity, including layered operating risk, volatile demand cycles, or structural headwinds that require constant navigation. Select-service hotels are a notable exception. In today’s environment, that exception matters.

For investors and operators who understand hospitality real estate, select-service and extended-stay hotels have quietly become one of the most compelling allocations in the CRE landscape. The numbers back it up. The fundamentals are sound. And the opportunity window, shaped by limited new supply, evolving traveler behavior, and a maturing lending environment, is one that sophisticated capital is actively seeking to capture.

Record Performance in a Challenging Market

The headline stat is hard to ignore: according to JLL’s U.S. Select-Service and Extended-Stay Hotel Outlook 2025, RevPAR (revenue per available room) in this sector reached a record $78 in 2024, 14% above 2019 pre-pandemic levels. Demand surged by 232,000 room nights year-over-year, nearly completing a full recovery from the COVID disruption.

This isn’t a one-cycle story. It’s a structural shift.

What drove it? The convergence of the select-service and extended-stay categories into a unified market. Properties in this space now blend amenities, in-room kitchenettes, flexible workspaces, and self-service food and beverage options to appeal to a broader, more diverse traveler base. Business travelers, remote workers, and leisure guests are all finding value in the same product. That demand for diversity is exactly what CRE investors look for when underwriting long-term asset performance.

The Margin Story Is the Real Headline

For anyone deploying capital into operating real estate, margins are the metric that separates good assets from great ones. This is where select service truly distinguishes itself from the broader hospitality landscape.

Gross Operating Profit (GOP) margins in select-service properties averaged about 26%, compared with just 15% for full-service hotels — a gap driven by leaner labor costs and the absence of food and beverage operations, which are notoriously difficult to run profitably. Full-service hotels carry complex staffing structures, multiple food and beverage outlets, and conference infrastructure that consumes revenue as quickly as it generates it. Select service strips away that complexity without sacrificing the guest experience.

The result is a cleaner, more durable income stream. EBITDA per available room (EBITDA/PAR) in the select-service sector has grown at a 23% CAGR since 2020, while CPI averaged about 5% over the same period, meaning this asset class has meaningfully outpaced inflation in profitability growth. For a CRE investor focused on real returns, that spread is significant.

Investment Volume and Liquidity

Institutional conviction in this sector is no longer speculative; it’s measurable. Since 2021, select-service and extended-stay hotels have generated $62.6 billion in investment liquidity, accounting for nearly 50% of all U.S. hotel transaction volume, according to JLL.

This level of capital concentration is meaningful for two reasons. First, it signals consensus among sophisticated investors on the sector’s risk-adjusted return profile. Second, it creates liquidity, the ability to transact, refinance, and exit, which many CRE niches lack.

JLL also notes that this sector exhibits the lowest yield volatility over the past 16 years among major property categories. In a macro environment defined by rate uncertainty, inflationary pressure, and shifting demand patterns across office and retail, low volatility is not a minor advantage. It is an advantage.

Supply Discipline Creating Pricing Power

One of the more overlooked tailwinds in this sector is the supply picture. New select-service and extended-stay construction has slowed to below 2.6% of existing inventory, below its historical average. Meanwhile, the number of brands in the sector has grown from 184 in 2000 to 214 today, representing 74% of the sector’s total room supply, according to JLL. Marriott, Hilton, and IHG are all expanding aggressively through franchise-driven growth, conversions, and targeted acquisitions.

The implication for asset values is straightforward: when demand is growing and new supply is constrained, existing assets gain pricing power. ADR growth and occupancy stability follow. Investors entering this space now are capturing assets before that compression fully plays out.

What LRE & Co Sees in This Sector

From a commercial real estate perspective, the select-service hotel thesis aligns with what we seek across asset classes: durable cash flows, margin resilience, supply constraints, and a broadening base of institutional capital that provides exit liquidity.

The lending landscape is also evolving favorably. While banks remain dominant in this space, JLL notes increased participation by insurance companies, CMBS lenders, and investor-driven debt sources, a diversification that reduces refinancing risk and offers greater structuring flexibility for acquisitions and development.

The broader U.S. hospitality real estate market is expected to grow from approximately $1.03 trillion in 2025 to $1.39 trillion by 2031, at a 5.1% CAGR, according to Mordor Intelligence. Within that growth trajectory, select-service is positioned to capture a disproportionate share, driven by its operational model, adaptability to evolving traveler preferences, and the simple fact that it delivers better returns with less complexity.

The Bottom Line

In commercial real estate, the assets that compound quietly, deliver consistent yields, attract durable institutional capital, and remain relevant across economic cycles tend to reward patient, disciplined investors most.

Select-service hotels have earned that designation. The data for 2024 and early 2025 isn’t a short-term spike; it reflects a sector that has matured, evolved, and positioned itself as one of the more defensible income plays in the current CRE environment.

At LRE & Co, we continue to evaluate select-service opportunities with the rigor this asset class deserves and with the conviction that the fundamentals support them

CategoriesNews & Blog

Why I Always Walk the Site Before I Read the Report

By LRE Companies,

The Report Is Always a Backward-Looking Document

I want to say something that I know will make some of my colleagues in commercial real estate uncomfortable: demographic reports, traffic studies, and broker packages are useful, but they always describe the market that existed when the data was collected — not the market that exists when your project opens, and certainly not the market that will exist when your lease matures.

I don’t say this to dismiss the analytical tools that inform sound development decisions. I use them. My team relies on them. Rigorous quantitative analysis is non-negotiable in any development I’m involved in. But I have learned, through deals that worked and deals that didn’t, that the most important information about a market is almost never in the report. It’s in the market itself, waiting for someone willing to go look.

What You See That the Data Cannot Show You

When I walk a site, I’m looking for specific things no demographic report can capture. The first is the quality of the surrounding development. Not whether development is occurring (the data tells you that), but what kind. New residential construction that attracts young families with children signals a different market than apartment development that attracts transient renters. The physical quality of the housing stock, the presence of parks and schools, and the condition of the adjacent commercial development tell you something about the community’s trajectory that a traffic count simply cannot.

The second thing I’m looking for is evidence of unmet demand. How far do residents drive to reach the retail and food-service options that should be available closer to home? Are there long lines at the limited options that do exist? Are there empty buildings that suggest failed attempts to serve a market that wasn’t ready, or successful businesses that suggest a market that is ready but underserved? These questions require eyes, not spreadsheets.

Third, I look at the infrastructure. This includes the condition of the roads, the quality of the intersections, and the utility infrastructure that will support development. A beautiful demographic profile in a market with inadequate infrastructure is a warning sign. A market with modest current demographics but serious infrastructure investment signals that the people making long-term bets on that corridor believe its best days are ahead.

The Conversations That Change Everything

Some of the most valuable site intelligence I have gathered over the years has come from conversations with people who would not appear on any analyst’s list of recommended contacts. Gas station attendants. Grocery store employees. Local police officers, as my team documented during our Oregon site hunt. The person running the only fast-food restaurant in a thirty-mile radius.

These are the people who know what residents are asking for. Who understands what the community needs but isn’t getting? Who can tell you, in five minutes of honest conversation, more about a market’s character and its unmet demand than any third-party research package?

I’m not romanticizing this. I’m reporting what works. The developers who are consistently early to the right markets are almost universally the ones who are physically present in those markets, talking to the people who live and work there, and building the local knowledge no report can substitute for.

A Practice Worth Building Into Your Process

For any broker or developer reading this who is evaluating a market you don’t know well: before you read the report, before you build the pro forma, before you engage a broker for comparable data, get in the car and go look.

Spend a day in the market. Drive every major arterial. Walk the available sites. Have lunch somewhere local. Talk to people. Let your direct experience inform your interpretation of the data rather than the other way around.

You will see things that change your analysis. You will miss opportunities the data flagged and discover opportunities the data missed. Over time, the discipline of ground-level market presence will become one of your most durable competitive advantages in a business where everyone has access to the same reports.

Read more from Akki Patel at https://akkipatel.com/

Akki Patel is the founder and CEO of LRE & Co., a commercial real estate development company operating across California, Idaho, Oregon, Nevada, Colorado, and Utah. He writes about entrepreneurship, development, and community impact at https://akkipatel.com/

 

CategoriesNews & Blog

Spring Construction Season: What Developers Need to Know About California’s 2026 Building Code Updates

By LRE Companies,

If you’re breaking ground this spring, California’s regulatory landscape looks materially different from a year ago. The 2025 California Building Standards Code, codified in Title 24 of the California Code of Regulations, took effect on January 1, 2026, and applies to all permit applications submitted on or after that date. There is no grace period, no grandfather clause for projects still in design, and no waiting out the cycle: due to AB 130, this is the last major update to the code until at least 2031.

That six-year freeze makes understanding the 2026 requirements more urgent, not less. Whatever you build this spring will last for years. Here’s what developers with active commercial projects need to know before submitting for permits.

The Permit Date Is the Line That Matters

The most important thing to understand about the 2026 code is the trigger. Projects with permit applications submitted before January 1, 2026, may continue under the previous 2022 code cycle, provided the permit has not expired. Everything submitted after that date, including spring 2026 groundbreakings, must fully comply with the updated Title 24 standards. If your project is in design now, assume you’re building to the new code.

The Five Changes With the Biggest Commercial Impact

  1. Electrification: Bigger Scope, More Coordination Required

Electrification mandates are the most operationally disruptive change in the 2026 code. Requirements are embedded across multiple sections of Title 24 — Parts 2 (California Building Code), 6 (Energy Code), and 11 (CALGreen) — and they materially expand the electrical scope of work on virtually every commercial project.

For commercial kitchens, the new energy code introduces “electric-ready” infrastructure requirements, meaning new builds must be pre-wired to accommodate future all-electric appliances, even if gas equipment is installed at opening. Service sizing requirements have increased, load calculation constraints have tightened, and EV-ready and EV-capable infrastructure is now mandatory for commercial parking structures, with ratios based on occupancy type.

The practical implication is that electrical, mechanical, and framing trades now need to be coordinated earlier in the design process than most project teams are accustomed to. Compliance is no longer determined solely at the design stage; field verification, commissioning, and documentation, including HERS testing, are now required for sign-off.

  1. Solar + Battery Storage: No Longer Optional Together

New commercial buildings that require solar photovoltaic systems must now pair them with battery energy storage systems (BESS). This pairing requirement adds planning complexity around roof space, load calculations, and system design that wasn’t previously required. Developers who have pre-designed rooftop configurations without BESS integration may need to redesign before permit approval.

The California Energy Commission projects that, taken together, these energy code updates will generate an estimated $4.8 billion in energy savings over 30 years and reduce greenhouse gas emissions by approximately 4 million metric tons, equivalent to the annual energy consumption of more than half a million homes.

  1. Embodied Carbon: A New Requirement for Large Commercial Projects

California became the first state to regulate embodied carbon, the emissions produced during the manufacturing and assembly of building materials, directly in its building code. Starting in 2026, the CalGreen requirements apply to commercial buildings over 50,000 square feet, requiring developers to address embodied carbon through material reuse, life-cycle assessments, or low-carbon material choices.

For large-footprint commercial projects, office campuses, retail centers, and industrial facilities, this is a new design and procurement constraint that will affect material-sourcing timelines and potentially cost assumptions for steel, concrete, and glass. Budget for the assessment work early; it cannot be retrofitted late in the design process.

  1. A Standalone Wildfire Code — With Real Teeth

Previously, wildfire-resistant construction standards were scattered across three sections of the California Building Code. The 2026 update consolidates them into a single, standalone California Wildland-Urban Interface (WUI) Code, codified as Title 24, Part 7. The new WUI Code applies to approximately 4.5 million California properties in fire-prone areas and requires ignition-resistant exterior materials, ember-resistant vents, and compliance with defensible space requirements for all new construction and major renovations in designated zones.

For commercial developers building anywhere near WUI-designated territory, the standalone code means stricter oversight of materials, installation sequencing, and inspection, and less room for jurisdictional interpretation than the old dispersed standards allowed.

  1. Accessibility Upgrades Now Easier to Trigger

Updates to the California Existing Building Code have increased the likelihood that even modest renovation projects trigger broader accessibility compliance upgrades. Developers planning tenant improvements or partial renovations should budget for the possibility that their scope of work triggers accessibility requirements beyond the immediate work area. For commercial projects in older buildings, this warrants a code analysis before finalizing the construction documents.

New Contract Rules That Change Your Cash Flow Math

Two new laws that took effect on January 1, 2026, will affect how commercial construction contracts are structured and will apply regardless of project type.

SB 61 establishes a mandatory 5% retention cap for most private construction contracts. The cap applies across all subcontracting tiers and cannot be waived by contract. If your standard contract language has historically included 10% retention, that provision is no longer enforceable. Review and update all contract templates before spring procurement.

SB 440, the Private Works Change Order Fair Payment Act, establishes standardized statutory procedures for change-order disputes on large private projects, including defined timelines for claims involving delays, additional costs, and time extensions. The law sunsets in 2030 unless extended. During that period, documentation discipline and timely notice will be legally significant in dispute resolution.

What This Means for Spring Timelines

Developers with projects permitting this spring should pressure-test the following:

  • Design coordination: Has your electrical engineer been engaged early enough to address expanded service sizing, EV infrastructure, and BESS integration prior to permit submittal?
  • Roof planning: If your project requires solar, does the roof layout account for paired battery storage? Has the load capacity been evaluated?
  • Material procurement: For projects over 50,000 square feet, has embodied carbon been addressed in your material specifications?
  • WUI exposure: Has your site been evaluated using updated WUI zone designations?
  • Contract review: Have the retention clauses and change-order procedures been updated to comply with SB 61 and SB 440?

The 2026 code cycle is the most comprehensive update to California’s building standards in recent memory. With a six-year freeze now in place, it will be the standard your projects are measured against for the foreseeable future. Developers who treat code compliance as a late-stage checklist rather than an early design input will feel the consequences in permitting delays, redesigning costs, and project timelines. The spring groundbreaking window is still open, but the margin for error is smaller than it used to be.

 

CategoriesNews & Blog

Northern California vs. Northwest Nevada: A Developer’s Comparative Market Analysis

By LRE Companies,

Two distinct markets. One portfolio. Here’s how LRE evaluates opportunity, regulatory friction, tenant demand, and returns across both regions.

At LRE & Co, strategic development isn’t just about where to build — it’s about understanding why each market behaves as it does. Our footprint across Northern California and Northwest Nevada gives us a unique vantage point on two of the West’s most dynamic industrial and commercial environments. They share a border but diverge sharply in regulatory velocity, tenant composition, and development scalability. Here’s a clear, updated look at both.

Development Opportunity: Land, Cost, and Room to Grow

Northern California, particularly the Sacramento Valley and surrounding infill submarkets, offers a robust pipeline of adaptive-reuse and redevelopment opportunities. Land is competitive and often constrained, yet developers gain access to a large consumer base, established logistics corridors, and proximity to Bay Area demand. Entitlements take time, but the reward is an asset in a liquid, supply-constrained market.

Northwest Nevada tells a different story, not the old one. While the region was once a lower-cost alternative, land prices in Reno-Sparks, TRIC, and other high-demand nodes now often match or exceed those in the Sacramento area. The real advantage is not cheaper land; it’s scale, speed, and predictability. Large, contiguous parcels remain more accessible, and projects can move from concept to construction with fewer delays.

Key realities:

  • Land pricing between the two regions is now comparable, depending on the submarket.
  • The cost of doing business, labor, construction, and impact fees, is also more similar than many assume.
  • Nevada’s edge comes from transaction velocity and development scalability, not discounts.

Regulatory Environment: The Friction Factor

California’s regulatory framework is well known; CEQA, prevailing wage requirements, and extended permitting timelines can add 12–24 months to a project. These hurdles increase soft costs and introduce entitlement risk, while also creating high barriers to entry. Once a project is approved, it benefits from long-term supply constraints that support occupancy and rent growth.

Northwest Nevada operates under a fundamentally different philosophy. No state income tax, streamlined permitting, and pro-development local governments make entitlement timelines significantly faster. Washoe and Storey counties routinely fast-track approvals for qualifying industrial and commercial projects. Even when land prices are similar to those in California, the reduction in regulatory friction materially improves project economics.

“The question isn’t which market is better, it’s which market aligns with your capital structure, your timeline, and your tenant relationships.”

Tenant Demand: Who’s Leasing and Why

Northern California’s tenant base is broad and resilient. E-commerce distribution, food and beverage processing, government agencies, industrial users, and life sciences all contribute to stable demand. UC Davis, state government employment, and proximity to the Bay Area’s innovation economy create a diversified and durable occupancy foundation.

Northwest Nevada has emerged as a magnet for large-format logistics, advanced manufacturing, and data infrastructure. Tesla, Google, Apple, and Switch anchor the region, drawing suppliers and logistics operators to the I-80 corridor. The tenant profile is more concentrated yet exceptionally strong, ideal for developers capable of delivering big-box or specialized industrial products.

ROI Potential: Running the Numbers

Return profiles differ meaningfully between the two regions — but not for the reasons they once did.

Northern California’s higher soft costs and longer entitlement timelines compress initial yields, with stabilized cap rates in key Sacramento submarkets typically ranging from mid-4% to low-6%. Yet the value-add thesis remains compelling: rent growth fundamentals are strong, supply is constrained, and long-term appreciation is supported by high barriers to entry.

Northwest Nevada often delivers higher risk-adjusted returns due to speed to market, lower entitlement risk, and long-term institutional leases. Even when land prices are comparable to those in California, the ability to deliver product faster and secure 10–20-year leases with major tenants enhances cash-flow stability. Nevada’s tax structure, including the absence of a state income tax, further improves after-tax returns for many investor profiles.

LRE’s Perspective

Both markets are essential to LRE & Co.’s development strategy, not because they are similar, but because their differences complement each other.

  • Northern California offers diversified tenant demand, long‑term appreciation, and supply‑limited fundamentals.
  • Northwest Nevada offers speed, scalability, tax advantages, and access to next‑generation industrial users reshaping the American supply chain.

A disciplined developer doesn’t choose between them. They allocate capital to the opportunity that best aligns with their risk tolerance, timeline, and expertise.

At LRE & Co, years of relationship-building, entitlement experience, and market intelligence across both regions enable us to act decisively when opportunities arise, and to deliver assets that perform across cycles.

CategoriesNews & Blog

The Recession-Resistant Tenant: Why C-Stores and QSRs Outperform in Economic Uncertainty

By LRE Companies,

When the economy contracts, investors and developers both rush to reevaluate their portfolios. Cap rates expand, rent concessions appear, and vacancy rates increase across many asset types. But step into any convenience store or drive through any fast-food lane during a recession, and you’ll notice something striking: business as usual. The line at the drive-through remains just as long. The c-store coffee station stays just as busy. These aren’t lucky anomalies; they stem from deeply ingrained consumer habits that make convenience stores (c-stores) and quick-service restaurants (QSRs) among the most dependable anchor tenants in net-lease and retail real estate.

Trading Down, Not Cutting Out

The core idea behind c-store and QSR resilience is the “trade-down” effect. As economic pressure increases, consumers don’t stop spending; they shift their spending. A family that used to dine at a full-service restaurant three times a week now switches to a QSR. An office worker who once bought a $7 artisan coffee now chooses a $2 convenience-store cup. Spending continues; the location simply changes.

This pattern has consistently emerged across every major economic downturn over the past four decades. During the 2008-2009 financial crisis, QSR same-store sales outperformed those of casual dining by a significant margin, with brands like McDonald’s posting positive comparable sales growth at the height of the recession. The National Association of Convenience Stores (NACS) reported similar countercyclical trends, as c-store fuel and in-store sales remained among the most stable categories in retail.

The Data Speaks: Consistency Through Every Cycle

The historical record for these two tenant categories is compelling. Consider the following benchmarks that outline their performance throughout economic cycles:

Occupancy stability: Net-lease properties anchored by investment-grade QSR and c-store operators have traditionally maintained occupancy rates above 98% even during recessions, significantly outperforming retail categories like apparel, electronics, and home furnishings.

Rent collection: During COVID-19, the most severe operational disruption in modern retail history, major QSR brands and c-store operators maintained rent payments at higher rates than almost any other retail category, thanks to drive-through infrastructure, essential-goods designations, and strong corporate balance sheets.

Lease structures: Long-term absolute NNN leases with corporate guarantees, common in both segments, shield landlords from fluctuations in operating expenses and offer income stability that institutional investors value in uncertain markets.

Why Location Economics Reinforce the Model

C-stores and QSRs are not only resilient during economic downturns; they are designed for location stability. Both types of outlets are positioned along busy corridors: interstate exits, suburban intersections, and commuter routes. These areas draw customers out of necessity and routine, not spontaneous impulse. Fuel stops, morning coffee, and a quick lunch, these habits persist regardless of broader economic conditions.

At LRE & Co, we assess anchor tenants not only on brand strength but also on the behavioral economics behind each visit. A convenience store that processes 1,500 fuel transactions daily has a markedly different risk profile than a specialty retailer making 200 discretionary purchases. Volume, frequency, and non-deferrable needs are the key factors of true tenant resilience.

Credit Quality and the Franchise Model

The resilience of these tenants during economic downturns is further strengthened by the franchise system that governs most QSR operations and the ongoing consolidation trend transforming the c-store industry. When a landlord leases to a 200-unit Burger King franchisee or a regional c-store operator with 80 locations, they gain from the financial stability of a large enterprise rather than a single-unit operator. National c-store operators — including Circle K, Wawa, Casey’s, and Couche-Tard — possess investment-grade or near-investment-grade credit profiles that offer substantial downside protection.

This credit depth is extremely important during economic downturns. When smaller retailers face liquidity issues, large QSR and c-store operators have the financial strength to meet lease obligations, keep operations running, and even speed up expansion — further confirming site choice and the strength of the local trade area.

What This Means for the Investor

For investors seeking reliable yield in a rate-volatile environment, c-store and QSR net-lease properties offer a rare combination: income stability, rent-increase provisions, and credit backing. Cap rates for top-tier QSR net-lease assets have typically compressed during periods of economic uncertainty as capital shifts away from higher-risk retail toward essential-use tenants, meaning that owning these assets before a downturn allows investors to benefit both operationally and through asset appreciation.

As we examine the current macroeconomic landscape, with elevated interest rates, softening consumer sentiment, and tightening credit conditions, the argument for c-stores and QSRs as anchor tenants is more than just convincing. It is backed by history. These tenants have withstood every economic shock of the past 40 years and have come out with occupancy preserved, rents paid, and store counts growing. https://lrecompanies.com/

CategoriesNews & Blog

The Line Starts Here: Why People Camp Out for Quick Service Restaurant Grand Openings

By LRE Companies,

At LRE & Co, we’ve seen this phenomenon play out across dozens of markets. It raises a fascinating question for anyone in the commercial real estate and retail development space: what is it about a new Quick Service Restaurant (QSR) opening that turns rational adults into overnight campers?

There’s something almost theatrical about a Chick-fil-A grand opening. Days before the doors swing open, tents appear in the parking lot. Families set up lawn chairs. Strangers share meals and swap stories. By the time the ribbon is cut, what started as a line has become something closer to a community, and that’s no accident.

It’s About More Than the Food

Let’s be honest, Chick-fil-A’s chicken sandwich is excellent, but it’s available 364 days a year at thousands of locations. People aren’t lining up for 24 hours because they’re starving. They’re lining up because the line itself has become the event.

Quick-service restaurant openings, especially for brands with cult followings like Chick-fil-A, In-N-Out Burger, and Raising Cane’s, tap into something deeply human: the desire to be first, to belong, and to be part of a story worth telling. These aren’t just transactions. They’re milestones.

The Psychology of the Line

Consumer behavior researchers have long documented what’s known as the “scarcity effect.” When something is new, limited, or difficult to obtain, our brains assign it greater value. A grand opening is the ultimate scarcity play; there’s only one first day, and only so many people can be first through the door.

Chick-fil-A has brilliantly formalized this impulse with its “First 100” promotion, offering a year’s worth of free meals to the first 100 customers at most new locations. The reward is generous, but the real driver is the experience. Participants often describe it as one of the most fun things they’ve done, not because of what they receive, but because of who they’re with and what they share.

Community Built Around a Brand

What separates Chick-fil-A from most QSR brands isn’t just the food or the famously courteous service culture; it’s the emotional loyalty the brand inspires. Customers don’t just like Chick-fil-A; they identify with it. That identity becomes a shared language, and grand openings become reunions of people who speak it.

This kind of brand affinity is rare and has massive implications for retail development. When a Chick-fil-A signs a lease in a new center or corridor, it doesn’t just bring traffic; it signals to the community that the area has arrived. It generates buzz that no marketing budget can fully replicate.

What This Means for Retail Real Estate

For developers and landlords, understanding QSR opening dynamics is more than a curiosity; it’s a competitive advantage. The brands that generate genuine anticipation are the ones that validate a development, attract co-tenants, and sustain long-term traffic patterns.

At LRE & Co, we pay close attention to which brands carry this kind of gravitational pull. A Chick-fil-A or In-N-Out isn’t just a food use; it’s an anchor in the truest sense. The lines on opening day are a preview of the durable customer loyalty that follows for years afterward.

The Ritual Matters

In an era of frictionless delivery and one-click everything, there’s something remarkable about people choosing to wait. The QSR grand opening line is a reminder that consumers still crave experiences, real ones, shared with others, marked by effort and reward.

That’s a signal worth paying attention to. The brands worth pursuing for your retail project aren’t just the ones with the best product. They’re the ones people show up for, tent, lawn chair, and all.

 

CategoriesNews & Blog

Team Spotlight: Meet Audrey Ipong, Executive Assistant

By LRE Companies,

Behind every successful leader is someone who keeps the wheels turning, the details organized, and communication flowing. At LRE & Co., that person is Audrey Ipong, Executive Assistant to CEO Akki Patel. Since joining the company nine months ago, Audrey has become an essential part of our team’s rhythm, ensuring that nothing slips through the cracks and that projects stay on track.

From Teacher to Quality Assurance Leader to Real Estate

Audrey’s professional journey is a testament to adaptability and continuous learning. “I am a licensed professional teacher,” she explains. “When the pandemic hit, I shifted industries and entered the BPO field.” Over four years, she worked her way from agent to Quality Assurance Supervisor, developing skills that have proven invaluable in her current role.

That background in operations and quality assurance wasn’t an obvious path to real estate development, but Audrey had prior experience in short-term rentals and property operations that aligned well with LRE & Co.’s needs. “I already had experience supporting operations and working closely with leadership,” she notes. “That exposure to hospitality and property operations aligned well with the support role Akki was looking for.”

Finding Home at LRE & Co

What drew Audrey to LRE & Co was the opportunity to join a dynamic, fast-paced environment where multiple disciplines converge. “What drew me to the company was the chance to be part of a fast-paced environment where real estate, hospitality, and construction all come together,” she says. “As someone who values learning new things, being involved in different projects has helped me better understand how decisions are made and how everything fits together.”

Her typical day is anything but typical. It might include coordinating calls, organizing documents, following up with conference attendees, managing travel, or helping keep projects on track. “A big part of my role is making sure communication stays organized so nothing gets missed,” Audrey explains. “Every day is a little different, depending on what’s happening and what needs attention.”

More Than Task Management

For Audrey, being an Executive Assistant goes far beyond managing calendars and inboxes. “I’m passionate about being a reliable support system for Akki so he can focus on high-level decisions and strategic priorities,” she says. “For me, it’s not just about completing tasks; it’s about creating space for leadership to operate efficiently.”

She brings a unique perspective to her role, shaped by her background in quality assurance. “I try to approach my role with a practical and organized mindset. Beyond completing tasks, I consider how each action affects timelines and communication with others involved,” she explains. “My background in operations and quality assurance has helped me become detail-oriented and structured in my work, while remaining flexible when plans change. I also don’t hesitate to ask for clarification when instructions are unclear.”

Rising to the Challenge

One of Audrey’s most challenging projects was organizing events in unfamiliar locations without fully understanding all the preferences and expectations. “Since I wasn’t familiar with the venues or local logistics, I relied heavily on proactive communication and asking clarifying questions early on,” she recalls. “By staying organized, confirming details, and maintaining constant coordination, I was able to deliver the event smoothly and meet expectations despite the initial uncertainty.”

Staying current with industry trends is easier for her than it might be for others in her position. “I’m fortunate to have access to the same materials and updates that Akki reviews, which helps me stay informed about the latest trends and developments in the industry,” she notes. “That constant access and involvement help me stay updated without having to seek information separately.”

The LRE & Co Difference

When asked what makes LRE & Co stand out, Audrey emphasizes the company’s hands-on, relationship-focused approach. “LRE feels very hands-on and relationship-focused. Decisions are made thoughtfully, and there’s a strong emphasis on execution, not just ideas. It’s a lean team, which means everyone is involved and accountable.”

What excites her most about the company’s future? “Seeing projects move from an idea to something real. It’s rewarding to be part of that process and to watch the company continue to expand into new markets and opportunities. There’s always something new happening, and that keeps the work meaningful.”

She sees the industry evolving toward a more experience-driven model. “I think the industry is becoming more experience-driven and more focused on long-term value,” she observes. “It’s not just about building properties anymore; it’s about creating spaces that actually serve the community and adapt to how people live and work today.”

Making an Impact Behind the Scenes

Although her role may not be client-facing, Audrey understands how her work contributes to LRE & Co’s larger mission. “My role may be behind the scenes, but by keeping communication organized and projects moving, I help support the larger goal of getting developments off the ground,” she says. “When projects move forward efficiently, that’s what ultimately leads to new businesses, jobs, and activity in the community.”

Beyond the Office

When she’s not supporting LRE & Co’s operations, Audrey leads a rich personal life filled with creative pursuits. Her main passion is cooking. “I love to cook. I’m always watching food-related content and trying to recreate dishes at home,” she shares. “I enjoy seeing my family’s reaction when I serve something new. That’s the best part for me.”

She also has hobbies that might surprise her colleagues. “I crochet and create bespoke stationery. It’s something I enjoy during my downtime, and it helps me relax and be creative.” More recently, she’s been learning to sew, always looking for new skills to develop.

Her perfect weekend? “Honestly, just spending time with family and catching up on laundry,” she says with a laugh. “Simple weekends are the best for me.”

As for beverages, her go-to order is a Spanish Latte. “And she’s definitely a night owl. So my shift actually works well for me,” she notes.

Living near both mountains and beaches in her area gives her options for getaways. “I’m lucky to live near both.”

Unexpected Sides

There’s more to Audrey than organization and event planning. “I used to be very active and played volleyball regularly,” she reveals. “I slowed down in my 30s, but I still enjoy watching the sport.”

She also has a houseful of animals. “Yes, I have four dogs, all given to me, and eleven rescued cats,” she says, clearly someone with a big heart for animals in need.

Words to Work By

The best advice Audrey has ever received? “Always do your best in whatever role you’re given, even if it’s behind the scenes. People may not always see your effort, but consistency builds trust.”

For those just starting their careers, she offers this advice: “Don’t be afraid to make mistakes. They’re part of the process and help you become a better version of yourself.”

What has she learned from working with the LRE & Co team? “That communication and follow-through really matter. Even small updates can make a big difference.”

When asked about her superpower at work, she doesn’t hesitate: “Thinking outside the box.”

A Unique Request

If Audrey could have dinner with anyone, living or dead, her answer is refreshingly practical and speaks to her commitment to growth. “I wouldn’t go far. I’d choose Akki,” she says. “I’d like to learn more about financial literacy, especially since managing money and investing weren’t commonly taught in my family growing up. I’m interested in understanding how to be more responsible with my finances, particularly given the current state of the economy.”

It’s this combination of curiosity, dedication, and thoughtfulness that makes Audrey a valued member of the LRE & Co team. While she may work behind the scenes, her impact on the company’s success is anything but invisible.

At LRE & Co, we believe our strength lies in the diverse experiences and perspectives our team members bring to each project.

CategoriesNews & Blog

Multi-Generational Developments: Creating Spaces That Serve Families, Young Professionals, and Retirees

By LRE Companies,

The American community is evolving, and commercial real estate must evolve with it. Today’s most resilient projects embrace multi-generational appeal, creating spaces where a grandmother can meet friends for coffee, her daughter can attend a fitness class, and her grandson can pick up dinner, all within the same development.

This shift toward multi-generational planning isn’t just socially conscious development; it’s smart business. Developments that serve diverse age groups generate natural cross-traffic, extended operating hours, and recession-resistant tenant mixes. As millennials raise families, Gen Z enters the workforce, and baby boomers redefine retirement, the ability to serve multiple generations simultaneously has become a critical success factor.

Understanding the Multi-Generational Landscape

Effective multi-generational development begins with understanding the distinct needs of each life stage. Young professionals prioritize convenience, social experiences, and wellness. They seek coffee shops with strong Wi-Fi for remote work, fast-casual dining, boutique fitness studios, and services that simplify urban living.

Families with children require different amenities. They need grocery stores with ample parking, family-friendly restaurants, pediatric services, and retail options that serve multiple generations in a single trip, such as sporting goods stores, toy retailers, and family entertainment venues.

Retirees are an increasingly important demographic with substantial purchasing power and time flexibility. They value accessible healthcare, quality casual dining, specialty retail that caters to hobbies, and social gathering spaces. Importantly, many retirees reject age-restricted environments, preferring vibrant, multi-generational communities where they remain engaged with broader society.

The Tenant Mix Strategy

Creating successful multi-generational developments requires intentionally curating tenant mixes that meet overlapping needs without direct competition. The key is to identify anchor tenants that naturally appeal to multiple age groups, then layer in generation-specific offerings.

Healthcare and wellness services have multi-generational appeal. A medical office building housing family practitioners, pediatricians, specialists, and urgent care serves patients from infancy through retirement. Adjacent pharmacy services and physical therapy create a healthcare ecosystem that enables entire families to access care, generating consistent daytime traffic.

Food and beverage offerings offer perhaps the greatest opportunity for multi-generational programming. The most successful developments strategically layer options: a quality grocery anchor serving all demographics, fast-casual concepts for busy professionals and families, full-service restaurants for celebrations, and coffee shops serving as social hubs for everyone from students to retirees.

Fitness and recreation services increasingly bridge generational divides. Modern fitness concepts, boutique studios, climbing gyms, and family recreation centers draw diverse age groups for different reasons. Parents appreciate childcare availability, young professionals seek specialized classes, and retirees value low-impact options and community programming. These uses generate traffic during traditionally slow retail hours.

Design Considerations That Matter

Physical design plays an equally critical role in multi-generational success. Developments must balance accessibility for mobility-limited seniors and parents with strollers with the dynamic atmosphere that attracts younger demographics. Wide sidewalks, minimal grade changes, automatic doors, and ample seating create inclusive environments without sacrificing vibrancy.

Parking strategies become more nuanced in multi-generational contexts. While young professionals may prefer walkability, families and seniors typically require convenient surface parking. Successful developments often employ hybrid approaches: structured parking near residential and office uses, with surface lots serving medical offices and grocery anchors.

Outdoor spaces deserve particular attention. Well-designed plazas and green spaces create gathering points where generations naturally intersect. A plaza with movable seating accommodates morning coffee groups of retirees, lunchtime workers, and evening family gatherings. Playground areas adjacent to restaurant patios allow parents to dine while supervising their children.

Economic Resilience Through Diversity

The economic logic of multi-generational development extends beyond simple traffic generation. Diverse tenant mixes provide stability across economic cycles. Essential services such as healthcare and grocery stores sustain occupancy during downturns, while discretionary retail and dining capture spending during growth periods. The result is more stable cash flows and enhanced asset value.

Multi-generational developments also benefit from natural succession planning. As young professionals age into family formation, they continue patronizing familiar businesses while discovering new offerings. Families with young children eventually become empty nesters, seeking different services within the same trusted development. This lifecycle loyalty creates sustained demand and reduces tenant turnover.

The Community Integration Imperative

Perhaps most importantly, multi-generational developments foster genuine community connection in an increasingly fragmented society. When developments serve diverse populations, they become authentic gathering places where neighbors of different ages interact naturally. The grandmother who shops weekly encounters the young parent she’s watched move in, and the remote worker recognizes the retired veteran who walks his dog past each morning.

This community integration delivers tangible value. Developments perceived as community centers command premium rents, attract quality tenants, and maintain high occupancy. They become destinations rather than mere convenience stops, generating repeat visits and extended dwell times that drive retail success.

Looking Forward

As American demographics continue to diversify, multi-generational development will shift from a competitive advantage to a baseline expectation. Developers who master serving diverse populations simultaneously, through thoughtful tenant curation, inclusive design, and authentic community building, will create the enduring, valuable assets that define successful commercial real estate for decades to come.

 

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(415) 491 – 1500

4302 Redwood Hwy Suite 200

San Rafael, CA 94903

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Get in touch

phone

(415) 491 – 1500

4302 Redwood Hwy Suite 200

San Rafael, CA 94903

email

info@lrecompanies.com

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about us

The LRE & Co is a family organization that has been in real estate development, construction and the food and beverage businesses since 1999. It has been present in major markets throughout northern California and northwest Nevada.

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