Recent Observations: Real Estate Trends

Recent Observations: Real Estate Trends

postcard with SQFT text

Observations of Industrial Real Estate Trends

Real Estate Trends – The Good

Intense industrial real estate trends and conditions are diminishing. There are fewer container ships waiting to unload. The cost to ship a container from Shanghai to Los Angeles is 30% lower from its high. Building rents are still increasing but the doubling during the Covid-19 period was an aberration. While signs of a hyper-market are departing, a strong industrial market remains. There is a deficit of available space, strong corporate demand to improve supply chains and manufacturing resiliency, e-commerce, and high investment flow. Rent surges will continue with holiday stocking schedules starting in the Summer and again later in the year when China re-opens from its Covid-19 lockdown.
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SIORS: Finding More Industrial Deals By Blockchain

SIORS: Finding More Industrial Deals By Blockchain


We’ll be meeting in Phoenix for SIOR next week. They are bi-annual conferences, and this will be my 60th in attendance. There are three main reasons I attend. I learn from the best brokers and owner/developers in the industry. There are deals to make and I will see longtime friends. The 4th reason this year is to show how blockchain finds more industrial building deals.

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Industrial Space Market Premium

Industrial Space Market Premium

Industrial building rents are surging. Largest and fastest increases I’ve ever seen. We are almost at the point where rents and sale prices have doubled since the start of Covid. If rents were quoted daily, there would be the same large spikes you see in oil or wheat markets. Because industrial building market data is opaque, only those buyers (and brokers) most in tune with the industrial market read it accurately. Tenants are paying premium prices to obtain space under constrained conditions.
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2022 Continues – Severe Space Shortages

2022 Continues – Severe Space Shortages

potential 240,000 square foot lease deal near LAX

Acute space shortages are national news. Not only here in Los Angeles, where it’s about the worst, but all over the United States. Many tenants are being caught short and others are taking space far in advance, at greater amounts, and at much higher cost. Price bidding leads landlords to weigh credit, use, and history. Credit is the most important enhancement because it notably increases the value of buildings. Larger landlords also favor tenants that will lease multiple buildings across their national holdings.
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Can Crypto and Blockchain Secure your Commissions

Can Crypto and Blockchain Secure your Commissions

If you had the experience of driving down the street and seeing a building where you should have been paid and were not, this simple technology is of note. As more deals move “off-market”, I want certainty of commission arrangements. Ruthless competition and extreme space shortages is an explosive combination. In this hyper-intense market, this is one example of how I prove Procuring Cause using Blockchain.
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2021 Remains an Unbalanced Industrial Market

2021 Remains an Unbalanced Industrial Market

The industrial property business has grown from a real estate niche serving mostly large corporations and owner/users to a favored investment of large institutions. The rise coincided with the great manufacturing upheaval of shuttered plants as companies shifted production offshore. Goods return in containerized shipments and begat the new industry of logistics. The result was increased liquidity of both goods and capital. A situation that is ideal for warehouse development and investment. Today’s industrial marketplace is made up of global and national 3pls, shipping companies, e-commerce, and on the capital side, Industrial REITS, large investment funds, and a handful of developers. The Covid Supply Chain phenomena and an increase in tariffs has compounded an already unbalanced space market to acute levels
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Return to Corporate Real Estate

Return to Corporate Real Estate

There has been a resurgence of demand from Corporate Real Estate. Once, the most important sector of the industrial real estate business, corporate influence has waned in comparison to investor/developers. The fade of corporates is a long-term trend starting when manufacturing moved off shore in the 1980s. Since the Great Financial Crisis, Capital’s influence in industrial real estate has only become more pronounced as investors search for yield. Tenants are the crucial for cash flow, but where it counts the most, in the ownership rankings and at the negotiation table, Capital is the market leader.
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The New Industrial Real Estate Business

The New Industrial Real Estate Business

If you are buying, selling or leasing, today’s industrial real estate business has permanently shifted. It has become an investor led market that was originally established for Occupiers. Investment fundamentals supersede many traditional occupancy concerns. Industrial markets became financialized because of strong and increasing money flows from institutional funds, REITs and private investors. In the New Industrial Real Estate Business, profits accrue fastest to those who treat their buildings like an investment product. The primary market driver is improving income through rental increases, operations, and tenancies. The wave of financialization is affecting most local industrial markets in the best metros and is visible building-by-building. Technical sophistication and specialized platforms are the new means of operating in today’s industrial building business.
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Industrial Buildings: From Private Hands to Institutional Buyers

Industrial Buildings: From Private Hands to Institutional Buyers

One of the longest running trends in industrial real estate is the shift of ownership from private hands to institutions. Traditionally, insurance companies, pension funds, and real estate investment trusts (REITs) would purchase new developments and industrial parks after they had been leased and stabilized. It served as both a guaranteed exit for entrepreneurial developers as well as the way investors would acquire property to match long term obligations.
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