Concept
Industrial real estate includes properties used for manufacturing, storage, and distribution, such as warehouses and plants, and plays a vital role in the global supply chain. It has become increasingly popular among investors due to its stability, long-term leases, and rising demand fueled by e-commerce and global trade.
As supply chains evolve and online shopping grows, industrial properties are now key assets in commercial real estate, offering strong potential for income and appreciation.
why invest in industrial real estate
Macro Economics Analysis
WSJ: ENERGY PRICES DRIVING SHIFT TO U.S
BLACKROCK OUTLOOK
BlackRock’s 2024 Private Markets Outlook discussed opportunities in real estate and positioning for future.
Highlighted 3 areas for most outperformance, one of which being logistics hubs near major cities.
RESHORING JOBS
Job announcements up 66% over last 2 years
US FACTORIES SPENDING
Nearly tripled since 2021
Our Track Record by the Numbers
why development?
Speed
One of the many advantages to building industrial is speed from raw ground to completed building, which can generally be achieved in under 12 months, compared to 24-36 months for multifamily.
Development YIELD
The targeted unlevered yield on cost (YOC) that we can generate is much higher than other assets classes creating a larger development spread or margin between YOC and Cap Rates. See next slide.
Flexibility
Our construction process allows for a wide array of tenant types: distribution, warehousing or manufacturing. We also target leasing each building to a single tenant, but have the ability to demise into smaller sections and charge a premium.
Cost
It is cheaper to build than to buy an operating building. This represents an opportunity to buy land at a low cost basis and sale a stabilized asset with long-term credit tenant.
Our Industrial Opportunities
Bel Aire
Class-A development in a prime Wichita, KS submarket. Initial plans include 2 industrial warehouse/manufacturing spaces totaling 430,000 sf, with potential for 3 additional buildings.
- RETURN: 18%-23% IRR
- STRATEGY: Build 2 industrial spaces suited for manufacturing or warehousing, ability to develop up to 3 more buildings.
- MIN. INVESTMENT: $100,000
Iron House - CLOSED
In Q1 2023, we began Ironhorse Industrial Park: two buildings totaling 330,000 sf. Building 1 finished in under 12 months with a signed NNN lease; Building 2, completed shortly after, has multiple LOIs. Both projects were under budget.
- RETURN: Expecting ~25-30% of capital allocated to Building 1 back to investors. Unrealized gain of ~61% on original invested capital.
- Total Construction Costs: ~$16MM Current Estimated Value: ~$21MM Time Period: ~18 months
- MIN. INVESTMENT: $100,000
