In this market, the real question is:

“How well are expenses being managed?”

Because here’s what’s actually happening:
On many T12s,
55–70% of income is going to expenses.

Not an outlier.
A pattern.

Costs have quietly exploded:
1. Insurance
2. Payroll
3. Utilities
4. Taxes (some up by 40–50%)

You can’t control those.

But you can control execution.
And right now, that’s the edge.

Strong operators are:
1. Reworking payroll
2. Renegotiating vendors
3. Tracking utilities line-by-line
4. Cutting unnecessary admin
5. Tying marketing spend to leases

When rent growth stalls,

Margin is protected on the expense side.
That’s where deals are won (or lost).
IRR is easy to model.
Expense discipline is what makes it real.

In this cycle?
Boring operational excellence is alpha.