Industrial Advisors

What are the top 10 trends to watch in the industrial real estate market, and how will they affect investors, tenants, and the overall industry?

Co-hosts Bill Condon and Matt McGregor discuss the latest trends, from green goals and credits and incentives to market stability and the potential for a port slowdown.

1)     Green Goals

2)     Credits and Incentives

3)     Market stability

4)     Top Tenants making a rebound after a lot of cancelled starts through 2022.

5)     Flight to quality

6)     Transaction rebounds: after a very slow start to capital markets in 2023, the action is returning.

7)     Increased rent continuing.

8)     Another huge absorption year?

9)     Less construction in many markets is a huge indicator of a changing tide coming.

10)  Port slow down?

Mentioned in this episode:

IndustrialAdvisors.com

In this episode, hosts Bill Condon and Matt McGregor look at what has happened to Frederickson over the years, including its “connection” to Sumner, what has brought giants like Amazon, IKEA, and Best Buy to the area, the #1 issue tenants have today, and what the future of Frederickson may hold.

• Matt explains that Frederickson became what Sumner was with the difference that, while Sumner took 20 years to absorb, Frederickson is going to take about 7.
• Frederickson wasn’t even a market… but then the Best Buy deal happened, and it was followed by a ton of corporate tenants – which now make the area a phenomenal market.
• Labor may not necessarily be the first thing that comes to mind, but it’s the biggest issue tenants face today.
• Bill goes over the key reasons that have led corporations to get a location in Frederickson, making it what it is today.
• All the developers wanted to be down the I-5 corridor but being in Frederickson developers and corporate tenants have a labor situation that isn’t as sticky as that of other areas closeby.
• Bill touches upon what may be in store for Frederickson in years to come.

Mentioned in this episode: 

IndustrialAdvisors.com

Davis Property & Investments - davispropertiesllc.com

Panattoni.com

BestBuy.com

FloorAndDecor.com

Amazon.com

IKEA.com

What's the current state of West Coast capital markets? And what role may the recent bank failure play?

Co-hosts Bill Condon and Matt McGregor are joined by Colliers Western Region Executive Managing Director of Investment Services – and Ironman – Michael Kendall to talk all things West Coast capital markets.

They discuss the recent past of West Coast capital markets, how the role of risk has changed, and what the recent bank failure may mean for potential buyers and investors.

• Michael gives an overview of the current state of the West Coast market.
• Typically, Q4 is one of the busiest times for the Colliers West Coast team managed by Michael, but not last year. Both Colliers and its competitors had zero valuations going, then things changed. Michael discusses why he believes that happened.
• Michael, Bill and Matt talk about the recent bank failure and its potential repercussions on the market.
• According to Michael, risk didn’t matter last year and wasn’t priced properly. Now risk matters, maybe even too much as it’s being overpriced.
• Michael explains the difference between a forward (or vacancy) and a short-term wall, and shares his thoughts on the impact of debt on the capital markets world.
• Michael shares his insights and an example regarding land value in core markets on the West Coast, which have historically been hard to get. 

Mentioned in this episode: 

IndustrialAdvisors.com

Michael Kendall - colliers.com/en/experts/michael-kendall

Michael.Kendall@colliers.com

Colliers.com

What does the college selection process look like these days? What are some of its most challenging aspects?

Co-hosts Bill Condon and Matt McGregor welcome high schooler Mahrin McGregor who opens up about the college selection process she's currently going through – from the impact of the pandemic and her #1 worry all the way to Mahrin's best advice for someone who's about to get started with it.

• Mahrin discusses her experiences of applying to colleges as someone who's been in High School through the pandemic.
• She applied to 14 colleges, and is now down to three – Mahrin walks Bill and Condon through her top picks.
• Picking the wrong school and realizing that only when she's there (and feeling "forced" to request a transfer as a result) is what Mahrin sees as the most challenging thing about trying to pick a college.
• Mahrin shares her advice for people who are about to go through the college selection process.

Mentioned in this episode: 

IndustrialAdvisors.com

How has the first quarter of 2023 been for the Puget Sound market? And what’s to come in Q2?

Co-hosts Bill Condon and Matt McGregor do a review of Q1 and predict what may happen in the new year. Listen to learn more about leasing and subleasing, the theme of the market, the largest deal of the quarter, and what has been taking place in the development space, in terms of port activity.

• For Matt, Q1 was a good quarter despite some bad news in the media.
• Absorption numbers are misleading but, overall, it has been a good quarter from a leasing standpoint.
• The current vacancy rate in South Seattle is the highest Matt has seen in his entire career.
• There’s been a red flag: nationally, the Puget Sound region has continued to outpace the national increase in subleasing.
• However, numbers are increasing quarter after quarter, which will probably lead to it becoming a story a year from now.
• If last year’s theme of the market was "We're not buying but we're waiting for the right opportunity," today it's "We've got to play some money."
• Do you have 95% of your capital on the sidelines because you’re looking for a discount? According to Matt, there won’t be one…
• The $25.1M Bellevue’s Safeway Bottling Plant deal was the largest deal of the quarter.
• Matt and Bill discuss what’s currently happening in the development space, as well as regarding port activity.
• Bill believes that the further south you go, the bigger building you will want to build to differentiate yourself from the rest of the market.

Mentioned in this episode: 

IndustrialAdvisors.com

Previous episode - Dramatic Subleasing Growth in the United States - https://podcasts.apple.com/us/podcast/dramatic-subleasing-growth-in-the-united-states/id1483238743?i=1000595319067

TrammelCrow.com

Panattoni.com

What does it mean to be one of the leaders on the development side of the Pacific Northwest?

Co-hosts Bill Condon and Matt McGregor welcome Panattoni’s Seattle Partner and NAIOP Developer of the Year winner Travis Hale. The three discuss Panattoni’s development during 2022, talk about the company’s market strategy for the current year, and touch upon what Travis refers to as “four great transactions to institutional buyers.

• Travis does a recap of Panattoni’s development, as well as the market, during last year.
• Q3 of 2022 saw the rise of some debt increases – Travis discusses its impact on Panattoni’s outlook and approach.
• What’s Panattoni’s market strategy for the current year? Travis takes back the curtain to share what the company is and will be focusing on in 2023.
• Travis talks about what he considers “four great transactions to institutional buyers.”

Mentioned in this episode: 

IndustrialAdvisors.com

Travis Hale - panattoni.com/wp-content/uploads/2018/03/Travis-Hale-April-2022.pdf

Panattoni.com

Link Logistics (by Blackstone) - blackstone.com/insights/article/how-esg-objectives-strengthen-link-logistics

LaSalle.com

FedEx.com

What does the present South Seattle industrial real estate space look like? And what about its future?

Co-hosts Bill Condon and Matt McGregor talk about the current state of the Seattle market – including the factors that have contributed to the low performance, the role of expensive labor, and potential future repercussions of the current status quo.

• Bill and Matt share a couple of factors they think are contributing to the Seattle market not performing as well as other markets.
• Bill talks about what has been happening, over the last few years, because of the lack of expensive labor in the area.
• Matt and Bill discuss some of the potential future repercussions of the current status quo.
• Bill touches upon the fact that the tenant market gets deeper as you push South, as well as that the Seattle market traditionally doesn’t see many big tenants.

Mentioned in this episode: 

IndustrialAdvisors.com

Prologis - prologis.com

The future is coming and so are electric vehicles! What do some of the moves made by the likes of Amazon and UPS mean for the future of the industrial real estate space?

Co-hosts Bill Condon and Matt McGregor discuss why preparing industrial buildings for the future matters, the type of developers this makes the most sense for, and how to prepare industrial spec buildings for the future.

• Matt discusses the fact that many people in the industrial real estate market are not preparing their spec industrial buildings for the future.
• Other sectors seem to have been embracing, and have been preparing for, the future – like in the case of electric vehicles; Amazon just committed to buy 100 million electric delivery vans, and UPS just announced the upcoming installation of charging stations for their fleet.
• Matt and Bill go over a surprising fact about spec buildings and the coming electric change.
• Bill believes that the developers who are going to be ahead of the changing situation are going to reap the benefits.
• Matt talks about what may be the first spec building in the U.S. that may have the necessary infrastructure to be prepared for the future.
• There are two types of developers: those holding a building short-term and those holding it long-term. Bill talks about which of the two should really consider getting their spec buildings ready for the future.

Mentioned in this episode: 

IndustrialAdvisors.com

KG Development - kgdevgroup.com

With the current situation, with industrial real estate markets being as tight as ever from a vacancy standpoint – and heavily favored toward landlords – tenants can still have some leverage when negotiating a deal.

In this episode, hosts Bill Condon and Matt McGregor go over 5 steps tenants should consider in the current low-vacancy industrial real estate market.

• Several markets like Seattle, New Jersey, SoCal, and some in Florida are as tight as they’ve ever been from a vacancy standpoint.
• The points discussed in this episode are going to provide tenants with some leverage when negotiating a deal – especially now that markets are heavily favored toward landlords.
• Matt points out that the current situation in markets like L.A., San Francisco, and Vegas, as well as Seattle, are going to put tenants in a tight spot for the next 4-5 years.
• The first thing tenants should consider in a low-vacancy industrial real estate market is looking for subleasing options.
• The second is unconventional spaces, like shopping centers turning into some sort of storage, distribution, and fulfillment centers, for instance.
• When it comes to being in a low-vacancy industrial market, Matt suggests being flexible on location. One of the good aspects of this is the fact that in secondary locations you’re fighting over less labor competition.
• The fourth thing tenants within a low-vacancy industrial market should consider is looking for build-to-suit options.
• Matt and Bill discuss a story where real estate helped a company survive a downturn and put that money back into their business.
• The fifth aspect tenants should keep in consideration is to use technology and online platforms.

Mentioned in this episode:

IndustrialAdvisors.com

In this 5-Minute Friday episode, hosts Bill Condon and Matt McGregor discuss the importance of having a thriving team culture.

From coaching youth sports all the way to the business world, the two talk about one of the most important signs that your team culture is a good one, as well as the current situation at Colliers.

• For Bill, having a really good culture in place is the most valuable thing a company or a team can do.
• Matt points out the one thing that is a testimony to the fact that your organization does have a unique team culture in place.
• Bill shares that, in his opinion, the success of top-performing teams can be traced back to the right culture they have in place.
• Matt has had 27 years of experience coaching – he talks about the team he created the best culture with.
• Bill shares his thoughts about team culture in sports, as well as the team culture that has been built at Colliers.

Mentioned in this episode:

IndustrialAdvisors.com

Colliers.com

David Bowden

Hosts Bill Condon and Matt McGregor welcome back ‘SOAR Selling’ author and sales coach David “Dave” Hibbard.

The three discuss how to produce results, why you can’t ignore prospecting, and five techniques you can leverage to reach decision-makers while prospecting over the phone.

• As Dave Hibbard puts it, results matter…whether you’re in sales, brokerage, or leadership. You need to be producing results.
• It doesn’t matter how big your company is or how successful you are, you need to be reaching out to potential customers on a regular basis. Because, as Dave said, ‘all oil wells dry up.’
• The message is simple, yet powerful: you need to prospect.
• Dave shares five things you can use to reach a decision-maker using the telephone. Dave and his team have been using these techniques, which are also discussed in his book SOAR Selling, for over 30 years. Bill and Matt agree on their effectiveness.
• There’s a series of questions you may be asked when reaching out by phone, Dave goes over all of them.
• When hearing ‘Mary Smith is not available’ most people hang up the call… Dave discusses what that actually means and how you should respond to that.
• Taking risks while prospecting often leads to excellent outcomes – Dave shares an example that illustrates his approach to prospecting using the phone.

Mentioned in this episode:

Industrial Advisors

Dialexis.com

Call Dave anytime at 949-689-8872

Email Dave directly at dave@dialexis.com

SOAR Selling: How to Get Through to Almost Anyone – The Proven Method for Reaching Decision Makers: Close More Sales and Create New Business By Making Fewer Calls by David & Marhnelle Hibbard

Part 1 of the Dave Hibbard conversation - Make Prospecting Work Through the Power of Your Mindset and Beliefs

Gary Loveman

Do you have clients who became friends? Hosts Bill Condon and Matt McGregor discuss the benefits of turning business relationships into lasting friendships. They also share what you can do right now to create instant rapport with new clients.

• Bill and Matt discuss the benefits of building friendships with your best clients as well as the happiness and opportunities that arise from such relationships.
• For Bill, one of the greatest things about working in this industry is the great people he gets to interact with.
• Bill reveals they've been so successful this year because of their ability to turn clients into great friends.
• Matt shares an exciting story where a client flew him on a helicopter to his ranch in Montana.
• Bill and Matt agree that work is more fun when you work with people with whom you have great relationships.
• According to Matt, the motivation to guarantee client success increases significantly when clients become close friends.
• Bill recounts a funny story where he embarrassed himself in front of new clients during a celebratory dinner - a moment that marked the start of a long and successful business relationship.
• Matt highlights that they've been in business long enough to understand the value of building strong client friendships.

Mentioned in this episode:

Industrial Advisors

Hosts Bill Condon and Matt McGregor are joined by ‘SOAR Selling’ author and sales coach David “Dave” Hibbard.

The three discuss the crucial role mindset plays, the beliefs-actions-results connection, and how having a specific approach is going to make your prospecting more successful.

• Bill met Dave Hibbard twenty years ago, when he was six months into the business, when he participated in a live dial in one of Dave’s breakout sessions.
• Both Bill and Matt have successfully used some of Dave’s techniques to get in the door and close deals.
• For Matt, mindset is what sets Dave apart from other trainers.
• Dave defines mindset as the reflection of your beliefs. And mindset is something that helps top performers consistently win.
• Dave said it: “Beliefs drive your actions, and your actions drive results.”
• The mistake many people make when it comes to not achieving what they want is to focus on their actions. They’re wrong – they should focus on their beliefs, instead.
• Dave explains that beliefs come from an experience you have had. An experience is neutral per se, but it’s how you interpret it that shapes it.
• According to Dave, mindset can be taught if he can get in someone’s mindset. The problem, though, is the fact that lots of people stay stuck in their beliefs because they get a payoff.
• Dave discusses two choices people can make to understand where their beliefs come from.
• When it comes to prospecting, it isn’t just about the techniques you may use. It’s about believing that you are going to get a meeting.
• And, after that, it’s about believing that you can add value to that company. These create off-the-charts success, says Bill.

Mentioned in this episode:

Industrial Advisors

Dialexis.com

Call Dave anytime at 949-689-8872

Email Dave directly at dave@dialexis.com

Did you set New Year's resolutions? Feel like you're already failing barely a month later? Hosts Bill Condon and Matt McGregor discuss why most people fail with their New Year's resolutions. They also share their goals for the year and what they plan to do to follow through.

• Did you make New Year's resolutions for 2023? Are you sticking with them, or you've already slipped?
• About 38% of Americans set New Year's resolutions. 43% fail before February 1st, and only about 9% make it to successful completion.
• Matt and Bill discuss why most people struggle to commit to their New Year's resolutions.
• Bill reveals the two most common New Year's resolutions are losing weight at 13% and exercising more at 10%.
• Matt goes through the five things you need to do to get back on track if your resolutions are already failing.
• Matt and Bill reveal their goals for 2023.
• Bill shares a funny New Year's resolution story and why most people fail by the second week.
• Matt describes the things that make goals more achievable and ways to make your resolutions work for you instead of ditching them.

Mentioned in this episode:

Industrial Advisors

How should you prepare for US inflation, growth, and capital markets in 2023? Find out as hosts Bill Condon and Matt McGregor sit down with Paul White to discuss trends in the US capital market and what to expect from the economy in 2023.

• Bill starts the conversation by describing how Paul is the perfect example of a client who became a friend.
• Bill and Paul agree that there is no better time to invest than when most buyers are hesitant.
• Although the last 12 months have been chaotic, Paul predicts 2023 will be much more positive than 2022.
• How did rising interest rates and the risk of a recession impact cap rates?
• What are the predictions for market movements in the first quarter of 2023?
• Bill explains why he feels the investing side of the market is going to be slow in 2023.
• Paul shares LaSalle's approach to investing and buying properties.
• Bill and Matt discuss how investors have slowly transitioned from preferring long-term to short-term property leases.
• Paul believes the desire for short-term leases is largely driven by rent growth.
• Why short-term leases might be great for you in 2023.
• The majority of the decline has already happened, which is why Paul feels 2023 will be a great year for commercial real estate.
• Why is it so hard to secure loans for incomplete buildings?
• Matt and Paul debate whether it makes sense to acquire vacant buildings still under construction.
• There is still the risk of a global recession and high inflation in 2023 - however, if things hold off in the next 12 months, Paul feels 2024 will be an excellent year for the capital markets.
  
  

Mentioned in this episode:

Industrial Advisors

Who will come out on top in this year's NFL and NCAA football season? In today's episode, hosts Bill Condon and Matt McGregor go a little off topic to discuss American Football. They share their predictions for the season, teams that will make the playoffs, and what you can expect from the Super Bowl.

• Bill and Matt start the conversation by revealing their love for college and national football.
• For college football, Bill predicts the semis will have Ohio State take on Georgia and TCU take on Michigan - with Georgia beating Michigan in the final.
• Matt agrees with Bill's semi-final predictions but feels Michigan has what it takes to win it.
• In the NFL, Bill is a big fan of the Seahawks, but their mediocrity this year is just frustrating to watch.
• Bill believes the 49ers and the Philadelphia Eagles will make the NFC finals, with Philly coming out on top.
• For the AFC, Bill feels you should only look out for these three teams: Bengals, Chiefs, and the Bills. Expect Buffalo to beat Philly in the Super Bowl.
• Matt explains why the best teams have two things that set them apart - talent and defense.
• Matt is convinced that no team in the NFL has more talent than San Francisco - which is why he feels the 49ers will face the Bills in the Super Bowl and beat them.
• Matt and Bill agree that Buffalo versus Kansas City could set up the dream Super Bowl final.

Mentioned in this episode:

Industrial Advisors

What is the current state of the subleasing space and what should you expect going into 2023?

Hosts Bill Condon and Matt McGregor share some intriguing stats on the subleasing space, how Amazon's subleasing move impacted the markets, and what to expect from the space in the future.

• What's going on in the subleasing space? Bill and Matt start the conversation by sharing some really interesting stats on the current and future state of the subleasing market.
• In the 4th quarter of 2021, there were 10.2 million feet advertised for subleasing in the US. That number has increased by 78% in 2022 with 45 million square feet available for sublease.
• Bill explains how the online shopping slowdown is forcing Amazon to sublease warehouses.
• With more subleasing space available countrywide, Bill and Matt try to uncover whether rent prices will change and the demand for warehouses will slow down in 2023.
• One of the major advantages of subleasing is that you're getting yesterday's rates. In a ten-year lease, for example, if you sublease five years into the contract, you'll be paying rates from 5 years ago.
• However, the biggest drawback of subleasing is the risk that you won't get a renewal option or you'll get hammered with renewal prices.
• Matt and Bill are convinced the increase in subleasing space won't affect rent prices in primary markets like New Jersey, where we're seeing very good leasing velocities.
• Bill feels the upward trend in the subleasing space will level off in 2023.

Mentioned in this episode:

Industrial Advisors

How did the commercial real estate industry fair in 2022? Find out as hosts Bill Condon and Matt McGregor share the absorption of top markets, the state of the construction industry, what’s happening at the borders (including port activity) and the three dynamic factors impacting our market in 2023.

• What the net annual absorption rate is for 2022 and how it compares to 2021 - what an unbelievable year!
• What one of the best markets was (surprising as not a ton of land is left there) and why it’s surprising based on what has occurred there in the past years.
• How tenants will pay for a new product if it’s closer in, to be in the center of the valley.
• Which products and deals performed very well.
• What areas saw growth and what markets saw a dip.
• What areas had a 2x growth of what the normal absorption has been in the past.
• Bill and Matt compare the different markets. For example there was not a huge difference between the Kent and Sumner market.
• Who had a negative absorption and who has the biggest vacancy rate right now.
• Why we are heading into 2023 in a very tight market. We are in a very historic landlord market and continuing to drop.
• The state and growth of the construction industry (its absorption rate) and how much of it is pre-leased. The pre-leasing numbers are quite low and how it’s changed from Covid to a post-covid era.
• Matt and Bill predict whether plans will pause or if construction will continue. Are they building to specs still?
• What markets will continue with construction.
• Matt and Bill share predictions for port activity and what to watch for. What markets are increasing and which one’s are decreasing.
• What may happen close to the borders, in Mexico and even Canada.
• Mexico is key to our manufacturing future

Three Dynamic Factors Impacting our Market in 2023

1 - Inflation resulting in raising interest rates has slowed sales activity and they share their  prediction on sales over the upcoming year.

2 - Less available product will lead to a lower rate of absorption, but we’ll still have a very healthy year, even getting back to post pandemic numbers. Find out what rate they each predict!

3 - 3% was the market annual increase and it’s changed to 4%. Matt and Bill disagree a bit on what the norm will be.

Matt and BIll end sharing their opinion on what’s coming up in 2023, for pricing, land values, and market differences. 

Mentioned in this episode:

Industrial Advisors - https://www.industrialadvisors.com/

What should you expect from the industrial real estate markets in 2023? Hosts Bill Condon and Matt McGregor sit down with Jim Eckert from Owens Corning to discuss the current and future states of industrial real estate. They explore key trends that will shape the markets in 2023, the labor dilemma, and why finding the right properties is difficult post-pandemic.

• After the effects of the pandemic eased up, the industrial manufacturing space underwent a lot of changes - most of which led to rapid business growth.
• Although the pandemic was disastrous for the economy, Jim points out that industrial manufacturers still managed to thrive.
• Inflation, interest rates, and supply chain issues have made finding industrial properties tedious and expensive.
• Jim shares why he's a member of the Industrial Asset Management Council (IAMC), how long he's been a member, and why he keeps coming back.
• Industry events and conferences are the best places to network, learn, and grow as a professional.
• What should you expect going into 2023 now that things are slowly going back to normal?
• Smart business professionals prepare well in advance and never pull the trigger on anything without deep research.
• Like everybody else, Jim has also been hit by the labor crisis. He believes the best way to tackle this mess is to make the industry attractive to young professionals.
• Attracting good talent is hard; keeping that talent is even harder. But there's nothing as challenging as finding a manager capable of leading exceptional talent and making them successful.

Mentioned in this episode:

Industrial Advisors - https://www.industrialadvisors.com/

Why should you consider California's Inland Empire as an investment destination for 2023? Hosts Bill Condon and Matt McGregor sit down with Steve Bellitti, one of Colliers' top-performing brokers nationally, to discuss investment opportunities in The Inland Empire. They break down the investment opportunities in the Inland Empire from leasing activities, tremendous growth in rental rates, and the relentless demand for large industrial buildings. 

• The Inland Empire (IE) was built on the fact that Southern California has a population of 25 million people and the existence of two major ports in Long Beach and Los Angeles.
• Steve explains how e-commerce greatly influenced the growth of the Inland Empire. 
• Although IE is typically known for small trades, larger trades have occurred in the past 18 months due to sustained demand for warehouse distribution space.
• To keep pace with business growth and the relentless demand for additional warehouses, expect more industrial development projects in the Inland Empire.  
• Steve reveals that buildings over 5,000 square feet have a zero percent vacancy rate - a trend set to continue well into 2023. 
• Although there is demand for industrial buildings, nobody is buying or developing due to the unavailability of land and crazy prices. 
• According to Steve, the land supply issue will continue to push lease prices up no matter how many new buildings are completed. 
• Steve underlines how the pandemic caused massive delays for the buildings currently under construction. Buildings that took 12 months are now taking 18 months to complete.
• Transportation drives a lot more of the cost side of the expense equation than rent does. 
• What are green-certified buildings doing to lower their carbon footprint?
• Steve's outlook for 2023 - This is the year of change. Tenants will have more power over landlords who have continuously taken advantage of the supply shortage in IE. 

Mentioned in this episode:

Industrial Advisors - https://www.industrialadvisors.com