Podcast Summary: The Rent Roll with Jay Parsons

Episode #77 – Moses Kagan & Rhett Bennett | Sub-Institutional Multifamily Update
Date: March 26, 2026
Main Theme:
A deep dive into sub-institutional (small-scale) multifamily investment—its market dynamics, opportunities, challenges, and innovative partnership models, featuring insights from industry leaders Moses Kagan (Adaptive Realty) and Rhett Bennett (Reseed).

Episode Overview

In this episode, host Jay Parsons spotlights the sub-institutional multifamily space, which deals mainly with apartment properties under 100 units. The conversation explores why this segment is distinct from larger, institutional assets, how operators source and manage deals, the unique operational and capital challenges faced, and how Moses Kagan and Rhett Bennett are building a network and investment model to capitalize on these opportunities nationwide.

Key Discussion Points & Insights

1. Sub-Institutional Multifamily: Market Dynamics

(06:30 – 15:00)

• Definition & Scope:

  • “Small” or “sub-institutional” multifamily generally refers to buildings with fewer than 100 units (sometimes under 50).
  • Institutional investors prefer large deals unless they can cluster several small properties for management efficiency.

• Market Data Highlights:

  • Cap rates for small multifamily now average 6.1%—the highest in a decade, and about 70 bps above large-scale multifamily cap rates.
  • Average occupancy is 96.1%, about 1% higher than broader multifamily, but slightly down year-over-year.
  • Small multifamily is affected by the same supply/demand forces as larger assets—extra supply (even in other sectors like SFR) impacts occupancy and rents.

Host Quote (Jay Parsons):

“That does create a good story for buyers in this small multifamily market who might be seeing better value again in certain spots.” (12:03)

2. National Housing Headlines & Policy Trends

(15:00 – 25:00)

• Rise of Accidental Landlords:

  • More homeowners renting unsold homes, expanding single-family rental supply and pressuring rents.
  • Added BTR (build-to-rent) supply has pushed SFR rent growth to 10-year lows.

• Regulatory Risks:

  • Discussions about rent stabilization pushing small landlords out in places like NYC.
  • Highlight of Pew study on Austin, TX, showing how massive housing supply drives rents down—a case for supply-side solutions to affordability.
  • New executive orders encouraging housing production and deregulating development—host sees this as a positive step.

Memorable Jay Quote:

“The ultimate tenant protection is a lot of new housing supply... Austin shows that, and renters win in the long run as we've seen there.” (18:45)

3. Guest Interview: Moses Kagan & Rhett Bennett

(25:14 – 55:41)

Getting Started in Multifamily

• Rhett Bennett:

  • Background as a generalist investor, work across family offices and hedge funds, transitioned to a real estate and multifamily focus in 2018.

• Moses Kagan:

  • Grew up in a landlord family.
  • Launched Adaptive Realty in LA after the GFC, focusing on buying and rehabbing small, older buildings—over 110 renovations since 2008.
  • Built a capital base and industry presence through blogging and later, Twitter/X (179K+ followers).

Notable Moses Quote:

“I started writing on Twitter maybe six years ago and, and it, yeah it totally, totally transformed my life in a lot of ways.” (27:51)

The Reseed Model: Building a National Platform

• Core Strategy:
  • Reseed provides seed or growth capital to emerging local operators focused on sub-institutional multifamily and some industrial assets.
  • ~$200M fund, $120M deployed in 13 deals across the US; model leverages Moses’ social media/community network to discover operators and deals.

Rhett on the business genesis:

“It was obvious... Moses had unique distribution and so we could use that channel to recruit operating partners.” (32:04)

• Capital Relationships:

  • Much of the capital comes from relationships in Birmingham, backing what is essentially a 'Y Combinator' for real estate operators.

• Deal Example:

  • Alex Wall, San Francisco:
    • Third-generation operator, applied heavy value-add in rent-controlled, supply-constrained markets.
    • Different from institutional: deals closed with all cash, no set exit timing—allowing flexibility and lower risk.

Moses on small operator advantages:

“He combined an institutional mindset in terms of evaluating opportunities with like a real kind of scrappiness that I don't think that you can really teach.” (36:34)

What Makes a Winning Operator/Deal?

(38:00 – 44:00)

• Attributes:

  • Tenacity, deep local connections, ability to source “hidden” deals not marketed widely.
  • Willingness to pursue long-term holds and low leverage.
  • Reseed can be selective: when a region is over-supplied (e.g., Sunbelt 2023), they focus elsewhere (Midwest, coasts).

• Standardization:

  • Imposes common underwriting and deal structure templates, making it possible to compare opportunities and maintain portfolio-level discipline.

Moses:

“A big part of what we've done at Recede is to kind of from top down, impose on the operator standards for underwriting and structuring deals...” (42:02)

The State of the Sub-Institutional Market

(44:00 – 48:00)

• Capital Environment:

  • Smaller deals are easier to finance for individuals or small groups, but institutional equity is harder to raise now compared to pre-2023.
  • Reseed’s fund structure allows them to move swiftly on complex, portfolio-style small asset acquisitions.

• Example:

  • Philadelphia: Acquisition of multiple 3–4 unit historic buildings in one all-cash shot—impossible to finance otherwise.

Operations & Property Management Challenges

(48:24 – 52:00)

• Management Standards:
  • Sub-institutional property management is extremely variable; often disorganized, unreliable.
  • Reseed is “extremely hands on” and audits PM books at the transaction level—more like asset management.

Moses:

“It is shocking how disorganized, irresponsible, incompetent some property management companies are ... look at what they're doing. Because very often what they're doing is not okay.” (48:34)

Urban Regulatory Risk and Local Advantage

(52:04 – 55:18)

• Local Operators’ Edge:
  • Large institutions are moving out of heavily regulated, politically risky markets (SF, LA), but local/small operators can still succeed—especially if their investors are locally based and understand the risks.
  • Reseed diversifies across markets to hedge against catastrophic local regulation.

Moses:

“People who live in San Francisco and are seeing the city turn around and all the jobs and the rent growth and everything are like, yes, I would, you know, like where do I, you know, where do I wire the money?” (53:08)

• Strategy Matching:
  • High-supply, low-regulation markets (e.g., Huntsville, AL) are easy to operate in but may face oversupply; high-barrier cities (SF, LA) have more risk but also more upside when supply is tightly capped.

Notable Quotes

• Jay Parsons (Host):

  “The ultimate tenant protection is a lot of new housing supply. … Austin shows that, and renters win in the long run as we've seen there.” (18:45)

• Rhett Bennett:

  “It's a game of numbers and if you need a million or 2 million or $3 million to make an investment, there's a lot more folks out there that could potentially provide that capital.” (44:56)

• Moses Kagan:

  “The virtues of the reseed model are that because of our relationship with the operators, we're able to dictate ... the structure of the deals. We want to own stuff long term.” (42:13)

• Rhett Bennett:

  “There's a fine line between property management and asset management. For us, we're not drawing that line ... every aspect of the business, you just have to manage it very aggressively.” (49:43)

Timestamps for Key Segments

• 00:03 – 06:30: Episode intro, news headlines preview, and set-up for sub-institutional theme
• 06:30 – 15:00: Market data on small multifamily vs. institutional, foundational trends
• 15:00 – 25:00: Housing news, policy trends, and Austin case study
• 25:14 – 28:42: Guest introductions and backgrounds (Kagan and Bennett)
• 28:42 – 34:58: The Reseed model, capital relationships, early deals
• 34:58 – 44:00: Operator criteria, sourcing strategies, deal/market selection
• 44:00 – 48:24: Capital stack/lending environment and acquiring portfolios
• 48:24 – 52:04: Operations, property management, and hands-on asset oversight
• 52:04 – 55:18: Regulatory risk, local investors, and strategic diversification
• 55:32 – end: Closing remarks and gratitude

Takeaways for Investors & Operators

• Sub-institutional multifamily requires local knowledge, tenacity, and a different capital/operational approach than institutional assets.
• Success in this segment is about sourcing non-marketed deals, cultivating local relationships, and having flexible, efficient capital.
• Effective oversight and hands-on management can make or break performance; property management standards vary wildly.
• Local/regulatory risk is both barrier and opportunity; smaller operators can “outlocal” national players, especially with aligned local capital.

For more details, data, and stories, listeners are encouraged to follow up with Adaptive Realty, Reseed, or check out the referenced Arbor/Chandan small multifamily reports.