The Metamorphosis of Real Estate

After decades of simply maintaining the status quo, the industrial real estate market is experiencing a period of exciting growth. On this episode of The Yield, Mitch Rosen, Yieldstreet Senior Director of Real Estate sits down with Peter C. Lewis, Chairman/Founder of Wharton Equity Partners to discuss the rapidly changing landscape of industrial real estate. Because of the growing nexus of technology and real estate, companies like Peter’s are continuing with strategies of not only owning real estate but making investments in companies whose technology and products operate within that real estate.

Key Takeaways:

[1:54] The integral role of technology in the metamorphosis of the real estate market.

[2:44] A high-level overview of trends in industrial products in real estate.

[8:33] The impact of same-day delivery on industrial real estate investments.

[11:29] Supply and demand means rent in industrial spaces is at an all-time high.

[13:30] How might the future change in consumer demand affect industrial real estate?

[16:43] A look at fully automated facilities with no manual human labor.

[20:17] Retail implications of the industrial boom and where to invest capital.

[22:44] Insights into making investments in technology businesses focused on the industrial sector.

[25:00] Where else are industrial investors currently focusing their time and money?

[28:30] Geographic variations in supply chain markets.

[29:50] How the investment professionals are investing capital given current trends in the industrial sector.

[31:04] The impact of social media and politics on industrial real estate, especially in overlooked markets.

[35:30] Will the downside of e-commerce ever catch up to them?

On this episode of The Yield, Mitch Rosen, Yieldstreet Senior Director of Real Estate sits down with Peter C. Lewis, Chairman/Founder of Wharton Equity Partners to discuss the rapidly changing landscape of industrial real estate. Because of the growing nexus of technology and real estate, companies like Peter’s are continuing with strategies of not only owning real estate but making investments in companies whose technology and products operate within that real estate.

The promise of same-day delivery from Amazon has created a need for unprecedented access to localized distribution centers in nearly every city.  As Peter explains it, this demand is like taking a deck of cards, throwing it in the air, and hoping to catch the aces.  Other asset classes have stuck with playing traditional cards and enjoying themselves along the way, but this level of crazy in the industrial real estate market has never been seen before.

Demand for the space continues to rise, while the supply is actually shrinking. Peter explains that, in many cities, industrial space is disappearing as buildings are getting torn down or turned into residential real estate. This makes the industrial properties that are in such high demand by companies like Amazon even more valuable and is what keeps driving industrial rent prices to all-time highs.

Change is the constant in today’s world, but what does that mean for the future of tech companies and industrial real estate? If Amazon starts delivering packages via drone, will there be less of a need for the spaces that are currently in such high demand? According to experts like Peter, that won’t be an issue for a long, long time.  He walks listeners through the anticipated next-level needs of smaller companies, retail companies, and the increasing needs for B-to-B business transactions. In short, even with the potential for increased automation within the supply chain, industrial real estate will continue to play a key role in meeting consumer demands. From trying on shoes to getting your hair done or going to the movies, the need for retail spaces is not going to disappear entirely any time soon.

Where else are industrial investors focusing their time and money right now? Mitch and Peter dive into solar energy, rooftops, and other investment opportunities.  Variations in the ways that goods are being distributed to consumers in a faster manner than ever before, thanks to micro industrial properties. The common theme in every transaction is simply that it has to be great real estate. Whether it’s buying up raw land or completely wrecked buildings, the successful industrial real estate transactions are the ones that are creating value.

Throughout their conversation, one thing is perfectly clear — overlooked markets are gaining attention in the industrial real estate market, and the investors who are moving quickly are the ones that are going to see the greatest gains in the years to come.

But will the downside of e-commerce ever catch up with the benefits of all they offer? With mom and pop businesses continuing to lose the battle to the Amazon and Target giants of the world, there is definitely pain in progress. To hear opinions on where this battle is headed, you won’t want to miss the final insights from Peter Lewis on today’s episode of The Yield.

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