Relli co-founder warns waiting for market conditions to improve may cost operators competitive position
Commercial real estate investment is projected to reach $562 billion in 2026, representing a 16% increase from 2025 levels, according to industry forecasts. However, Mor Milo, co-founder of real estate investment platform Relli, cautions that the fundamental disconnect between buyer and seller expectations remains wide despite improving headline numbers.
“Expectations between sellers and buyers are still very far apart,” Milo said. “The market is still very constrained, and things are still very hard to move.”
The gap stems from structural issues rather than temporary market conditions. Property owners seeking to sell face taxable events requiring 1031 exchanges. Executing those exchanges requires suitable replacement properties at appropriate basis levels. With current interest rates and property valuations, identifying deals that pencil correctly has become increasingly difficult.
“They’re sitting on property because they don’t know what to buy,” Milo explained. “You have a vicious cycle between sellers and buyers not knowing what to do to unlock this capital without the tax implications.”
Interest rates currently hover around 6 to 7%, aligning with 30-year historical averages. The challenge for operators stems from decisions made during a period of abnormally low rates. Deals structured with floating-rate debt and optimistic refinancing assumptions now face deteriorating economics as rates that started at 2 to 3% have climbed to 7%.
Operators with strong investor relationships have survived by injecting additional equity to maintain cash flow. Those lacking such relationships have watched deal performance decline.
While some operators wait for market conditions to improve, others are adapting their capital raising strategies. Institutional investors have largely remained in debt markets where returns of 12 to 15% are available with better security than equity positions. This shift has created permanent rather than temporary capital scarcity for equity deals.
“Sponsors are very aggressive to raise capital because they’ve been struggling to raise capital,” Milo observed. “I see that consistently, day in and day out, operators are looking to figure out how to improve their capital raising processes.”
Operators building systematic approaches to retail investor acquisition are seeing measurable results. Relli’s platform data indicates investment reservations totaled $700,000 in the fourth quarter of 2025, compared to $1,700 total in the previous two years combined. One investor returned after six months of platform membership to reserve $250,000 in a new offering, completing the transaction entirely through digital channels.
“It takes time for people to make decisions,” Milo noted. “People need to build relationships with you.”
The timeline for building effective retail investor pipelines extends beyond typical planning horizons. Systems development requires months. Meaningful results require additional time. Operators delaying this infrastructure development risk ceding competitive advantages to firms that began earlier.
“The longer these sponsors wait to fix this problem, the more desperate they become,” Milo warned.
Market observers expect eventual concessions from both buyers and sellers as transaction pressures mount. However, operators depending on market resolution to solve capital access challenges may find themselves disadvantaged against competitors who have diversified funding sources.
Relli operates as a technology and marketing platform connecting real estate developers with retail investors. The company provides lead generation services for operators while offering investors tools to evaluate opportunities against traditional investment benchmarks.
Additional information is available at www.relli.co.
About Relli
Relli is a PropTech platform democratizing commercial real estate investment access. Co-founded by Mor Milo and Ross Iannarelli, the company connects investors with vetted real estate opportunities starting at investment minimums as low as $100 while providing marketing infrastructure for real estate operators.