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

Hosts Bill Condon and Matt McGregor talk about the main takeaways from IAMC's 20th Anniversary Forum in Detroit, Michigan. They discuss Detroit's industrial potential, the impact of Ukraine's war on manufacturing, and the incredibly inspiring story of Erik Weihenmayer - the man who summited Mt. Everest while blind.

• Are you unsure about investing or taking your manufacturing business to Detroit? The city's vibrancy and economic potential might shock you.
• The highlight of any conference is the chance to meet new people and rekindle old relationships.
• Of all the speakers at IAMC's anniversary forum, the most influential of them all was Erik Weihenmayer - the blind adventurer who conquered both Mt. Everest and the Grand Canyon.
• According to Matt, most people don't win because they let adversity get in the way.
• Anything worthwhile in life is created through adversity.
• Bill explains that the more successful people have great team members who trust and rely on each other.
• How will the war in Ukraine negatively impact the future of industrial manufacturing?

Mentioned in this episode:

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

No Barriers: A Blind Man's Journey to Kayak the Grand Canyon by Erik Weihenmayer - https://www.amazon.com/gp/product/B01IA6NU7K/ref=dbs_a_def_rwt_hsch_vapi_tkin_p1_i1

The End of the World is Just the Beginning: Mapping the Collapse of Globalization by Peter Zeihan - https://www.amazon.com/End-World-Just-Beginning-Globalization-ebook/dp/B09C65JNPF/ref=sr_1_1?crid=2ELTPB1PMT64W&keywords=Peter+Zion&qid=1670833194&s=digital-text&sprefix=peter+zion+%2Cdigital-text%2C351&sr=1-1

Hosts Bill Condon and Matt McGregor talk to Pete Quinn, the National Director of Industrial Business Development at Sansone Group - a nationally recognized commercial real estate firm that specializes in property management, brokerage, land investments, development and redevelopment of properties. They discuss the current state of the industrial development space, investing in industrial real estate, how the US can solve the labor issue fast, and how company culture can be used to drive business success.

• Pete believes that although the industrial development space is lucrative right now, there will be a lot more opportunities in 2023 now that the country is slowly recovering from the effects of the pandemic.
• Like all companies in the construction space, Pete highlights that the Sansone Group is also struggling with labor and supply chain issues.
• Pete is convinced that the primary duty of a manufacturer is to pay constant attention to what is happening in the economy and the factors that drive a client's decision-making processes.
• With the elections drawing closer and closer, Pete points out that things will loosen up regardless of the outcome because there will be a little less uncertainty with everybody wanting to focus on doing business.
• When asked about the current state of the US industrial construction space, Pete says everybody is going through the same things with inflation and interest rates. However, Sansone Group is experiencing tremendous success due to the company's "aggressively moving forward" culture.
• As Pete explains, one of the easiest ways to combat the labor problem is to bring in more immigrants but have a strict screening process in the country of origin. Mexico has always been the country's go-to source for cheap, willing and able labor.

Mentioned in this episode:

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

Sansone Group - https://sansonegroup.com/

Hosts Bill Condon and Matt McGregor talk to Maureen Donohue Krauss, the President and CEO of the Detroit Regional Partnership, a leading economic development nonprofit serving the larger Detroit region. They discuss why you should be doing business in Detroit, the benefits of investing in a culture-rich town, and why talent is an issue affecting businesses across the board.

• Maureen goes through the three dynamic things that make Detroit one of the best industrial towns to invest in.
• People used to ask about water and sewer pipelines before moving to an industrial town. As Maureen explains, all that has changed with people now more interested in the talent pool than anything else.
• Although finding the right talent is a major issue affecting businesses across the board, Maureen reveals that industries moving to Detroit can expect to find a talent pool with a deep understanding of industrial operations.
• According to Maureen, workforce diversity is a really important element in today's business environment. This is why most people consider Detroit a diversity hub with an 80% black population and the largest Arab population outside the Middle East.
• Maureen describes why companies look at supply chains and a steady access to top talent before investing in new towns.

Mentioned in this episode:

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

Hosts Bill Condon and Matt McGregor sit down with Jason Miller and Bret Swango. Jason is the interim chairperson of the Department of Supply Chain Management at Michigan State University, while Bret is the head of Location Intelligence & Workforce Analytics at Colliers.

They discuss the importance of data analytics in commercial real estate, why we will always have a persistent labor shortage, and a fascinating relationship between gas and rent prices.

• Commercial real estate has, for a long time, been driven by speculation, educated guesses, and gut feeling. However, with more investors looking for faster feedback loops, Bret believes data analysis will soon have the biggest impact on the industry in the long term.
• Jason reveals how investors can use big data to identify market inefficiencies, make faster decisions, and use that as their competitive advantage.
• Bret points out that the government stimulus is the main reason consumer debt is not higher than in 2008, even though people are spending copious amounts of money.
• What do NBA 3-pointers, NFL Championships, and Moneyball have to do with commercial real estate? According to Bret, data analytics changed how people played sports, and it's now time investors started using data to make faster and more informed decisions.
• According to a recent Deloitte and Fortune survey, the four main challenges facing CEOs right now are labor, supply chain issues, inflation, and geopolitical risks. All of which Bret believes can be mitigated by proper location.
• As Jason explains, the best way to counter uncertainty risk is to gather more and better information.
• Bret and Jason discuss the relationship between gas and rent prices.
• For Bret, the most dangerous thing in business is finding the right answer to the wrong question.
• Jason makes his predictions on the future of the labor market and explains why over 40% of manufacturers are operating below their target capacity.

Mentioned in this episode:

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

Hosts Bill Condon and Matt McGregor are joined by Betsy Power, who serves as the Director of Global Real Estate at PepsiCo. The three discuss Power's story, how she got to where she is today, the benefits of attending IAMC, some of the biggest changes of the last 12 months, and what the new year will probably look like for the corporate real estate space and for PepsiCo.

• Betsy Power shares the story of her path and how she got to where she is today.
• Betsy Power discusses the skills she has learned over the years and how those are something she's still using today.
• For Betsy Power, there are several benefits to attending IAMC in Detroit: connecting with people you could potentially do business with, the leadership training, and the opportunity to meet with service providers you may need in the future.
• Power goes over what she considers the biggest change – for her business – in the last 12 months.
• Betsy Power touches upon two most dynamic aspects that are currently impacting PepsiCo.
• When it comes to the new year, Power believes that at PepsiCo they'll continue to do the work that they want.

Mentioned in this episode:

Betsy Power's LinkedIn Profile

PepsiCo

IAMC – Industrial Asset Management Council

Patrick Mahomes

Starbucks

Fischer

Veritiv Corporation

Hosts Bill Condon and Matt McGregor are joined by Colliers' National Director of Industrial Research Amanda Ortiz. They discuss the current state of the industrial market, the 3 most impactful factors for that sector, the top markets for rent, and the predictions for Q4 and the new year.

• Amanda Ortiz shares that things in the industrial market are looking good – there's demand for product, strong rent growth, and low vacancy – but also brings up potential challenges going forward.
• Amanda discusses what she considers the 3 most impactful factors for the industrial sector on a national level.
• Amanda, Bill and Matt talk about the top markets for rent in terms of year-over-year growth and touch upon the user sector.
• Amanda makes her predictions for what the rest of the year is going to be about, and explains why she believes that 2023 is going to be a really good year for the national industrial market.

Mentioned in this episode:

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

Amanda Ortiz - https://www.colliers.com/en/experts/amanda-ortiz

Hosts Bill Condon and Matt McGregor go through the three most dynamic factors impacting the industrial real estate market Q3 2022.