Streaming Industrial Real Estate

Streaming Industrial Real Estate

Streaming is the talk of Hollywood. The biggest adaption since television. Technology is replacing human  decisions with lessons from on-line, eCommerce and subscription. It’s happening to industrial property.  Real estate is already a superior cash streaming business, now with more means to enhance revenues. Visible effects of streaming appear with large space take-downs by studios and independent producers. Agency, too, is being disrupted because the value of data is surpassing personal relationships.  Financial concentration and streaming technologies are creating a new real estate business. Virtual and artificial intelligence programs are essential to move forward in these new conditions. Continue reading “Streaming Industrial Real Estate”

Four Current Forces of the Industrial Real Estate Business

Four Current Forces of the Industrial Real Estate Business

The current robustness in industrial real estate markets obscures many forces that can balance and protect your investment and location decisions.   Technology, Monetary Policy, Political Risk, and Space Transparency are important factors that provide support during good times and bad.
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Race for Space – The New Dynamism

Race for Space – The New Dynamism

Dynamic pricing is becoming a greater influence on space leasing and building sales. By dynamism, I mean fluctuating rents separate from conventional underwriting.  A “spot market” is emerging to satisfy demand for smaller, flexible, and elastic spaces. Many examples include Truck Yards, Warehouse Sharing, Creative, Cannabis, and other categories of sub-space where “street rents” are disconnected from contract rents.  WeWork and Amazon are two primary examples that contract with the Landlord at one rent, and lease out space bits at higher rents. Public Warehouses, Self-Storage, Swap Meets, Studios and Truck Yards operate along the same model by collecting additional rent by offering “alternative occupancies” with varying degrees of added services. The revolution is any building can be pieced out especially with easily acquired technology that can create “smart” buildings for automation, surveillance, and access.
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Winter News 2016 – Industrial Real Estate Profits

Winter News 2016 – Industrial Real Estate Profits

development Deal Strategy

The current cycle is being propelled by three major conditions: Space Scarcity, Capital Markets Pressure and Rent Surge. Market dynamics are still very favorable for development and will only be disrupted if demand begins to weaken. Otherwise, strong fundamentals are the prevalent condition in most major U.S. markets.
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Looking at US Industrial with the US Cluster Mapping Project

Looking at US Industrial with the US Cluster Mapping Project

The Cluster Mapping Project (CMP) was pioneered by Michael E Porter of Harvard University. He is just as well known for his works on Competitive Advantage.  His work is a necessary foundation for US Industry and business organizations. I reprint his Value Chain diagram below for company diagnostics, which has been repurposed to examine the competitiveness of regions. To understand the implications of location and clustering, you can read an article Professor Porter published in 1995 about the strategic location of inner cities which is just as relevant today. 


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Economic Development in Greater Los Angeles

Economic Development in Greater Los Angeles


More so than ever before, cities are vying for companies that create jobs. There’s the policy aspect that favors clean and green jobs. Then there’s the backroom bargaining that favors successful outcomes. Companies that can offer employment would do well to study some of the recent newsworthy examples. They include the failed attempt by Los Angeles to attract AnseldoBreda, local jostling to snare Tesla Motors, competition for Eli Broad’s museum, Los Angeles Stadium in the City of Industry, and the smaller manufacturing  deals coming through the CRA of Los Angeles. Each one is fairly lucrative to the company and does not necessarily fit any set model. They are similar to the large retailers, like Costco or Walmart, who were able to negotiate attractive packages for redevelopment funds, property tax breaks, and property development benefits. I haven’t seen any studies if these retail developments met city economic expectations, but certainly the recent raise in sales tax makes up any marginal differences. It pays to understand the multitude of incentives available from local, state and national agencies.
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