• Why We Are Going All-In On Class B Industrial Assets

  • May 7 2024
  • Duración: 29 m
  • Podcast

Why We Are Going All-In On Class B Industrial Assets

  • Resumen

  • Discover why top investors are now pouring millions into Class B industrial real estate—don’t miss out on the next big opportunity in the market!

    Watch This Episode on YouTube

    ⬇️ The 10 Reasons We Are Going All-In On Class B Industrial ⬇️

    1. Historical Performance and Stability: Over the last 20 years, industrial real estate has consistently demonstrated strong total returns, high rent growth, and robust occupancy rates compared to other real estate asset classes like office, retail, and multifamily.

    2. COVID-19 Acceleration and E-Commerce Growth: The pandemic highlighted and accelerated the need for more industrial space due to the surge in e-commerce. This trend has increased demand for warehouses and distribution centers.

    3. Technological Advances and Supply Chain Shifts: Advances in technology and ongoing supply chain adjustments, including the adoption of robotics, are transforming the industrial sector, making it more critical than ever.

    4. Reshoring of Manufacturing: Legislative incentives and global supply chain disruptions have led to a reshoring of manufacturing to the United States, boosting demand for industrial spaces close to major markets.

    5. Long-Term, Triple-Net Leases: These leases offer predictable cash flow and reduced operational costs for landlords, as tenants are responsible for most property expenses.

    6. Value-Add Potential: Class B properties often present more opportunities for value addition and yield improvement compared to newer, Class A properties.

    7. Sticky Tenant Base: Tenants in Class B industrial spaces are less likely to relocate due to the nature of their operations, ensuring stable tenancy compared to other real estate classes.

    8. Last Mile and Infill Locations: Class B properties are often well-situated relative to urban centers, making them ideal for last-mile logistics crucial for quick delivery systems.

    9. Cost Advantage: Class B industrial spaces generally offer more competitive pricing for tenants and buyers alike, making them an attractive investment relative to the cost of new construction.

    10. Supply Constraints in Desired Sizes: There's a limited supply of mid-sized industrial facilities (20,000 to 150,000 square feet), which are in demand but not being built currently, leading to higher rents and occupancy rates in these size ranges.

    See our full investment thesis here

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    Timestamps:
    0:00 - Introduction
    1:18 - Our Plan For The Next Year
    2:20 - Industrial vs. The Other Asset Classes
    5:15 - The Four Major Macro-Economic Trends Supporting Industrial
    12:01 - The Three Things We Are Looking For In Our Deals
    12:44 - The Four Reasons We Are So Bullish On Class B Industrial
    18:25 - The Deal Size and Market Types We Are Targeting and Why
    25:00 - Our Buy Box
    27:31 - Summary

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