Graduation Day
Families across the country are celebrating their kids, grandkids, nephews and nieces graduations from elementary, middle school, high school, university, and a host of grad schools. It's an exciting time filled with pride. That means tomorrow is the time of summer adventures and preparation for next year. We wish your families well as they close one chapter and grow into the best versions of themselves. We have taken on a summer intern again this year, Will O'Neil hailing out of Newport Beach, who is a bright young gentleman transitioning from his junior year from the University of Southern California. He will be integrating with our team and learning the ropes this summer. If you have any recommendations for people looking to enter the business, please send them our way.
Lease Comps
Lease comps are like protein shakes. They are the pivotal ingredient in industrial real estate as properties are only as valuable as the lease that is in place or the potential lease that could be in place with a repositioning of the asset. Here are the best comps I've cherry picked for the last 30 days. Remember, every comp has its own story of who the landlord is, how much the operating expenses are, whether it was a new deal or renewal, whether it was a lease option that was excercised or arbitrated, the height of the ceiling, the geographic area, etc.
Supply Chain Network Design & Optimization
We are piloting a program with three of the top supply chain network optimization software providers to start handling supply chain network design and optimization studies for select clients.
This is a new value add to our tenant representation brokerage business as we have increasingly found executives and supply chain VP's needing to adjust their supply chains to lower overhead expenses, consolidate facilities, reduce transportation costs and most importantly improve delivery times to customers. Due to the nature of the pilot program the fees associated with the project will be reduced or waived in the event of subsequent industrial lease or sale transactions that can offset the program. If you would like to participate in this program and have a use case you would like to discuss, please let me know and we can setup a time to discuss.
Personal Investment
I just completed making my latest LP contribution into a 22,382 SF industrial multi-tenant, 24 tenant property, in Orange County.
My version of investment diversification has taken more of a scaling up approach in real estate as I grow. The amount of money I'm willing to invest has increased as my experience, track record, and network of skilled operators has increased. My ability to sense, underwrite, and asset manage risk is a craft that I am honing and very intentional about as it is the difference between a successful investment and lackluster performance.
Over the years, I have owned or still own: * Single Family Rentals in Austin, Texas * 3 Unit Apartments in Costa Mesa, CA * Limited Partner Investments in industrial properties that are single tenant in nature and structured as sale leasebacks to large manufacturers in the mid-west including properties from 257,622-605,000 SF in Indiana, Ohio, Illinois and Alabama. * Limited Partner Investments in industrial multi-tenant business parks (small bay) ranging from 59,233 SF to 324,949 SF in Texas. * Limited Partner Investments in our company’s 10,000 SF single tenant office building structured as a single tenant net leased investment. * Direct Investment in multiple Industrial multi-tenant (small bay) properties in Texas that I own and manage. * General Partner Industrial investments – I’ve tried syndicating my own industrial multi-tenant business park deals in Texas probably 10 years ago and will do this again with the next larger multi-tenant business park that I gain control of. * And when I have to invest within a retirement structure or pension, I’ve invested in the stock market by buying Prologis REIT stock and Rexford REIT stock. * I’ve looked into buying land and building multi-tenant properties, investing in supply chain companies as a limited partner, buying a 3PL, and buying a property management company, but have only gone ahead and invested in existing property purchases thus far.
The funny thing is I feel like I have not invested enough. These investments have taken me to a point where it is time to focus solely on industrial property and then scale in quality and quantity. If you hear, see or talk about multi-tenant industrial property (small bay) for sale, looking for a co-general partner, or looking for a limited partners, and raising capital in any state, reach out to me. I’m working with GP’s, LP’s and property opportunities in 12 states and excited to connect and collaborate with you.
Call to Action
Your situation is unique. Whether you are buying, selling or leasing, it takes a tailored approach to reach your objectives in today's market. With a little advanced preparation we can help create the outcome you need as seamlessly as possible. Reach out to Grant, Chris or me to discuss how we can start adding value for you today.
Best Regards,
Justin
Justin Smith, SIOR
jbsmith@lee (mailto:jbsmith@lee-associates.com) irvine.com (mailto:jbsmith@leeirvine.com?subject=Newsletter%20Follow%20Up)
949.400.4786
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