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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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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KLEIN NEWS FALL 2010

KLEIN NEWS FALL 2010

Activity Is Up, But Far From Celebratory

With the year of fear behind us and summer doldrums over, should we expect an increase of activity? Compared to the past two years of bad news, yes, activity is up. Many businesses that were paralyzed with fear are now investigating opportunities in the property market. Private companies are looking for space just in time to replace the waning influence of government stimulus. For instance, businesses that can access low interest rates are in a particularly enviable position. The evidence is demonstrated by a few stellar deals that were purchased by a few brave souls who struck when no one else could. Now that the great fear has receded, we are left with a bad market instead of a catastrophic one. Buyers and Tenants are coming out of their shell to see if they can find bargains and re-launch business plans.
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SIOR Spring Conference Brings More Optimism

SIOR Spring Conference Brings More Optimism

We finished our semi-annual meeting in Orlando, Florida. The general sentiment is we have reached the bottom of the cycle. Although by what measurement? Recent sales and leases have indicated a low point. However, when other leases expire, those buildings will still need to discover their own downward level. Visually, think of dominoes falling down over a lengthy period of time. The current signals are more a psychological target rather than one of momentum. Monitoring rent tends will validate when we are at the beginning of a new upward trajectory.

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The Year Ahead – 2010

The Year Ahead – 2010

General Sentiment

To judge the health of the industrial market, I rely on activity reports from fellow brokers. Across the board, its been obviously weak. Most of my peers are squeaking out a living from short term leases and renewals. Sales and investments are moribund. There’s a bit of government support and stimulus work for those in the pipeline, but not enough to have a broad impact. Many agents have left the business. Most of my broker friends anticipate the same for 2010. We may be nearing the bottom of the cycle, but most sellers and banks are not willing to accept the greatly reduced prices.


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Global Manufacturing And Los Angeles

Global Manufacturing And Los Angeles

More and more, there is an element of global manufacturing that I call “shelled out” production. There are no signs on the building. There is no one in the office. The workers either pretend or truly can not speak English. The manufacturing is composed of sub-assembly and contract piece work. There is no one in charge and the workers don’t know where their goods will go. As soon as the customer changes its allegiance to a slightly lower cost provider, the entire operation can fold. Our manufacturing system is largely devolving to the manufactured part and who can make it the best and ship it the fastest. There is virtually no other measure.
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