Industrial Tenant Defaults Rising: Small-Space "Midnight Moves" and Growing Sublease Supply

On the Industrial Advisors podcast, Bill Condon and Matt McGregor discuss a recent rise in tenant defaults over the past six months, especially in smaller industrial spaces, drawing parallels to the post-2008 era when small tenants drove vacancy spikes (flex vacancy rising to 22% from 4%). They attribute today's defaults to COVID-era leasing decisions, tenants taking more space at higher rents amid inflated sales, and supply-chain constraints - followed by economic softening and supply-chain correction. They cite recent examples of a 16,000-square-foot "midnight move," a 20,000-square-foot business failure, late-rent letters, and even a 110,000-square-foot issue. Sublease inventory has grown from about 400,000 square feet in late 2022 to over 7 million, increasing default risk. They advise landlords to monitor rent closely, communicate early, and consider payment plans, while tenants should be transparent and engage landlords before arrears accumulate.

0:00 Introduction to Tenant Defaults

0:42 Historical Trends and the 2008 Comparison

1:25 Why COVID-Era Leases are Failing Now

2:15 Recent Examples of Midnight Moves and Defaults

3:10 The Massive Surge in Sublease Inventory

4:00 Advice for Landlords and Tenants

Human-First AI Adoption in Commercial Real Estate: Turning Tools into ROI

On the Industrial Advisors podcast, hosts Bill Condon and Matt McGregor interview Michelle Hamilton, a former commercial real estate and AEC strategic leader who founded Spark AI Strategy and AI Class Lab and was recruited by Answer Rocket to lead change management and AI implementation. Hamilton says many firms invest heavily in AI tools but miss ROI by neglecting human-first adoption, hands-on training, and governance, which can drive risky "shadow AI" use when employees turn to personal accounts. She describes AI's value in CRE as a practice/research partner that automates research and reporting, converts historical data into actionable insights via conversational use cases, and enables brand-aligned communications by training chatbots with company and personal standards. She discusses job impacts, noting layoffs from failed replacement assumptions and pointing to legal research and some consulting roles as most exposed, while advocating upskilling employees as AI orchestrators. She also highlights education shifting professors toward coaching and emphasizes citations and bibliographies. Finally, she outlines a phased engagement model: companywide AI 101, governance, department stakeholder sessions, 80% hands-on training, and an IP-based prompt library.

0:00 Intro and Michelle Hamilton Background

2:40 The State of AI in Commercial Real Estate

5:00 Human-First AI Adoption Strategies

7:30 Real World AI Examples for Brokers and Investors

10:00 Managing Data Security and Shadow AI

12:45 Personal Branding and AI Email Communication

15:15 Will AI Replace Jobs in the Industry?

17:45 The Future of AI in Education and Universities

20:15 How to Implement AI in Your Organization

22:18 Conclusion and Final Thoughts

Shipping Expert Sal Mercogliano on Iran, Red Sea Disruptions, and the Future of U.S. Ports

On the Industrial Advisors podcast, Bill Condon and Matt McGregor interview shipping and logistics expert Sal Mercogliano, a former merchant mariner and professor who created the YouTube channel "What's Going On With Shipping," which grew rapidly after the Ever Given Suez incident. Mercogliano explains how conflict involving Iran is disrupting shipping through insurance constraints in the Persian Gulf, affecting energy flows and container trade, and compounding Red Sea diversions around Africa and increased reliance on the Panama Canal. He describes how supply chain shocks ripple globally, raising surcharges and likely freight rates. The conversation covers post-COVID diversification away from overreliance on China toward other Asian countries, though China remains significant. Mercogliano discusses competitive dynamics for Seattle/Tacoma versus Vancouver and Prince Rupert, the importance of port productivity, and advises shippers and 3PLs to diversify routes and facilities to remain nimble amid ongoing uncertainty and disruptions.

00:00 Making Shipping Simple

00:36 Meet Sal Murano

01:12 From Sea to Classroom

01:53 YouTube Channel Explosion

04:04 Humor and Pop Culture

04:51 Iran Conflict Shipping Impacts

06:41 US Coasts and Port Shifts

08:22 Moving Beyond China

09:51 Seattle Tacoma Port Outlook

12:36 3PL Strategy and Resilience

15:52 Biggest Risks Next Year

18:20 Wrap Up and Thanks

The Resurgence of Landlord Pitches in the Changing Market In this episode of the Industrial Advisors podcast, hosts Bill Condon and Matt McGregor discuss the evolving dynamics of landlord pitches in the real estate market. They reflect on how landlord pitches were more common in the past whenever a property sold, but became rare over the last decade due to dominant capital markets teams controlling listings. However, with increased market diversification and a softening market, landlords are now more inclined to seek out the best leasing teams through pitching processes. The hosts advocate for the importance of these competitive evaluations to ensure landlords hire the most adept listing teams for their assets. 00:00 Introduction to Landlord Pitches 00:47 The Decline of Landlord Pitches 01:18 Market Shifts and Their Impact 02:01 The Role of Capital Markets 02:30 The Importance of Competitive Leasing 03:18 Encouraging Competitive Practices 04:34 Conclusion and Final Thoughts

Lessons from the Indiana Hoosiers: Parallels Between Football and Real Estate Success

In this episode of the Industrial Advisors podcast, hosts Bill Condon and Matt McGregor discuss the remarkable turnaround of the Indiana Hoosiers football team, who went from being historically the worst program to winning the national championship. They draw parallels between the success of the football team and successful commercial real estate teams. Key points include the importance of leadership, discipline, and teamwork. By staying true to their roles and consistently performing, both the Hoosiers and successful brokerage teams achieve outstanding results. The hosts also emphasize the importance of responding to adversity and maintaining a disciplined approach to ensure long-term success.

00:00 Introduction and Podcast Overview

00:40 National Championship Game Recap

01:10 Leadership and Training Insights

02:15 Team Roles and Efficiency

02:49 Turnovers and Analytical Approach

03:50 Handling Adversity

04:52 Discipline and Consistency

06:19 Conclusion and Final Thoughts

In this episode of the Industrial Advisors podcast, hosts Bill Condon and Matt McGregor interview James Lawrence, famously known as The Iron Cowboy. Lawrence shares insights into his extraordinary achievements, including completing 50 Ironman's in 50 states in 50 days, and later accomplishing 101 Ironman's in 101 days. He explains the symbolic significance of his 101st day and reflects on the criticism he faced during his 50-state challenge. Lawrence emphasizes the importance of learning from mistakes, maintaining mental toughness, and the value of family support in his monumental undertakings. The episode concludes with Lawrence discussing his future goals as he looks forward to turning 50 and seeks to balance his life with health, speed, and personal challenges.

00:00 Introduction: Defying the Impossible

00:43 Welcome to the Podcast

00:53 Meet James Lawrence, the Iron Cowboy

01:52 The Marathon Monks and Day 101

03:54 Facing Criticism and Overcoming Adversity

08:31 The Decision to Conquer 100 Ironmans

12:29 Family Support and Personal Achievements

16:23 Future Goals and Personal Growth

18:13 Books, Documentaries, and Final Thoughts

2025 Review and Predictions for a Rebounding 2026: Industrial Real Estate Insights

In this episode of the Industrial Advisors Podcast, hosts Bill Condon and Matt McGregor review the performance of the industrial real estate market in 2025, highlight key factors behind the year's trends, and share their optimistic predictions for 2026—dubbed the 'rebounding year.' They discuss the record-high vacancy rates, increased activity from large tenants, and the surprising demand for land. The hosts detail vacancy and absorption rates across various submarkets, noting significant activity in recreational use and capital markets. Concluding on a lighter note, they predict the Seattle Seahawks will win the Super Bowl while outlining a hopeful recovery in market conditions with vacancy rates projected to drop significantly by the end of 2026.

00:00 Introduction and 2026 Predictions

00:38 2025 Review: Key Factors and Market Dynamics

03:47 Vacancy Rates and Absorption Numbers

06:23 Recreational Use and Tenant Activity

08:31 Capital Markets Overview

11:03 Final Predictions and Super Bowl Talk

Katy Preidt: Navigating Economic Development and Power Grid Challenges at Duke Energy

In this episode of the Industrial Advisors podcast, hosts Matt McGregor and Bill Condon interview Katy Preidt, Economic Development Manager at Duke Energy Corporation, live from IAMC in Indianapolis. Katy shares her unique journey from aspiring science teacher to her current role, detailing her educational background in geology and GIS from Ball State, her work in California at Apple, and her return to Indiana. She discusses the dynamics of economic development, the competitive advantages of Indiana, and Duke Energy's initiatives, such as the Site Readiness Program, which prepares communities for industrial development. Katie also addresses the challenges of power grid demands, particularly in context to the fast-paced industrial sector, and the innovative solutions that Duke Energy engineers are implementing to stay competitive.

00:00 Introduction and Guest Background

00:49 Educational Journey and Early Career

01:59 Transition to Duke Energy

02:20 Economic Development Role

02:49 Life in Indiana vs. California

03:00 Power Grid and Industrial Development

04:39 Duke's Site Readiness Program

07:26 Challenges and Future of Power Infrastructure

10:44 Conclusion and Final Thoughts

Puget Sound Industrial Market Trends and Predictions for 2026

In this Five-Minute Friday episode of the Industrial Advisors Podcast, Bill Condon and Matt McGregor discuss recent trends in the Puget Sound industrial real estate market, focusing on net absorption and market activities. They highlight the market's positive momentum over the past 45 days, the potential closing of several deals by year-end, and outlook for the coming years. The hosts predict a slight negative absorption for the current year but are optimistic about significant positive absorption in the first half of 2026, driven by major deals involving companies like Amazon and other substantial projects. The episode concludes with forecasts for the end of the year and the first two quarters of 2026.

00:00 Market Momentum in the Last 45 Days

00:29 Introduction to Five Minute Friday Industrial Advisors

00:40 Net Absorption and Year-End Predictions

01:01 Big Deals on the Horizon

01:22 Amazon's Potential Moves

01:49 Activity in the 1 to 200 Range

02:21 Market Picking Up in the 20 to 50 Range

02:35 Year-End and 2026 Predictions

03:19 Conclusion and Farewell

Behind the Scenes at the Global CRE Broker Virtual Summit

In this episode, industrial advisors Bill Condon and Matt McGregor discuss Matt's recent appearance at the Global CRE Broker Summit hosted by renowned business coach Rod Santomassimo. Held in a highly advanced virtual tech room, this event featured a slew of top brokers and speakers. Matt shares insights into the venue, the sessions, and the high-energy atmosphere. The discussion also covers the adaptability of top brokers in challenging markets and the value of deep involvement in professional organizations like SIOR and CCIM. The episode concludes with a reflection on the event's success and anticipation for future gatherings.

00:00 Entering the High-Tech Venue

00:46 Introduction to the Event and Hosts

01:26 Overview of the Virtual Summit

02:26 Details of the Advanced Virtual Stage

03:04 Keynote Speakers and Their Insights

03:39 Audience Interaction and Q&A

05:37 Takeaways and Final Thoughts