Occasionally, it’s
cathartic to empty the cache of our consciousness. Today is that day. As
someone famous once opined - they’re only thoughts but they’re random and all
mine. So with no further adieu, here goes!
Lee and Associates
Summit. Last week we found
ourselves at the Encore in Las Vegas for our annual soirée - AKA the Summit.
Participants from all over North America and the UK attended. 2020 was scrapped
entirely. 2021 was virtual. So this was the first time we’d been together since
2019. MUCH has changed - including a supercharged industrial market, an
uncertain office environment, and a morphing retail experience. I should
mention, our technology tools have also improved. Months of lockdown will do
that to an industry.
Highlights from the
industrial panel featuring professionals from the Rockefeller Group, Dermody,
and Prologis follow. Institutional property owners are wary of inflation, a
pending recession, and what impact both will have on cap rates. All agreed -
industrial has been the darling and even if all of the new projects under
construction laid fallow - our vacancy would still be skimpy - around 5.5%.
Fuel conservation, automation, and taller and more efficient inventory is in
our future. With the advent of self driving trucks - truck courts may be
shorter.
Technology use in
commercial real estate has lagged our residential counterparts. Since a house
purchase is largely a consumer transaction vs a business deal - target rich
social media sites are not as plentiful. Plus, we don’t share our available
inventory and lease comps through a realty board clearinghouse. Therefore,
we’ve been slower to adapt. We’ve witnessed a large consolidation of tech
providers as evidenced by Lightboxes acquisition of ClientLook, Real Capital
Markets, and Digital Map Products. Also, Buildout recently added Apto, Rethink
CRM, and Prospect Now. No one dares to take on the big Gorilla - CoStar
however. Some in the audience wondered if the broker would ultimately be
ousted? Consensus was more money CSM be made selling to brokers vs replacing
their role.
Who knows where we’ll
be next year. Most agreed Las Vegas is tough to beat for its travel ease,
entertainment, and massive convention know how. It is a tough schlep from the
East however.
My foray into the
Orange County office world. As readers know, my expertise centers upon manufacturing and
logistics buildings and the family owned and operated companies that occupy
them. I don’t seek office assignments, but occasionally they find me. Our
current task is an offshoot of an industrial deal. You see, we were engaged to
sublease a building’s warehouse. Planned was for the tenant to remain in the
office portion. As our campaign unfolded - two groups emerged who wanted both -
the warehouse and office portion of our offering. Now the operating group is
considering a move into a suite of offices. Therefore, we toured eight suites
in five buildings over the past week. The office world is changing to meet an
evolving workforce. Open collaborative spaces are vanishing and returning to
banks of private areas. After all, virtual meetings require privacy. Outdoor
space is sought for respites, meetings, and functions. On-site amenities such
as conference areas, fitness centers, and game rooms are cropping up. Corporate
America is considering amenities in office buildings as a way to attract new
workers and convince existing ones to return. Quite interesting turn of events,
indeed.
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