The State of Industrial, According to I.CON
After two days of learning and networking at a conference, it can be difficult to fully absorb all of the new ideas and strategies you’ve heard about. This year at I.CON: The Industrial Conference, NAIOP asked industrial expert Clark Machemer, senior managing director with Crow Holdings Industrial, to help distill the key takeaways from two days of exciting education, tours and networking sessions.
Below is what Machemer shared – in his own words – with attendees.
“I have the task of wrapping up and putting the finishing touches on the past electrifying 48 hours.
This conference was so much more than Amazon and ‘What inning are we in?’ I, for one, (along with most of the 850 registered attendees) am super excited about the state of our industry. Who would’ve thought there would be a resale market for tickets at this year’s NAIOP I.CON conference?
So what does the dialogue of this conference mean? To me, it means this is not our fathers’ and grandfathers’ warehouse industry. As my friend Alex Klatskin said in one of the many networking events held, our industry is no longer two men sitting in an old Cadillac smoking cigars.
Today’s warehouse industry is the logistics business. It is both men and women conducting site tours in a Tesla with real-time data on their smartphones, evaluating transportation costs, labor costs, warehouse throughput, detailed performance specs of the building and supply chain platform efficiency.
Our industry is filled with problem-solvers with can-do attitudes like Jeff Milanaik.
It has leaders like Gary Anderson evaluating yields not just between the East and West Coast of the U.S. but between China, Europe and India.
It has folks like Omer Mir Ahmed evaluating: ‘Do I want to be in the consumption area of the supply chain, or in the outbound from the port area of the supply chain?’
The market has new players like Andrew Chung and longtime players like my partner Crow Holdings.
We are building on sites that just five years ago we would not step foot on. Today, innovative environmental remediation firms are partnering with contractors and collaborating with developers and local municipalities to ‘make land.’
While I have been accused of wearing rose-colored glasses, I will heed some advice from Jim Clewlow of CenterPoint who said ‘Every year has been tough.’
Yes, there are some headwinds in our market. We have heard about:
- Truck driver shortages
- Interest rate increases
- Skyrocketing land values
- Increasing construction costs
- Lack of available land for development
- Statements from leasing brokers like, “Do I wait to lease so I can capture higher rent in 6 months?”
- Threats of a global trade war
- Increasing minimum wages and concerns on the availability of labor
- Potential strikes
- And the sentiment that it is too expensive to carry land.
But at the same time, there are extremely strong tailwinds:
- Strong user demand
- Talented real estate professionals who look at tenants today not through the eyes of a confrontational landlord/tenant relationship, but as clients and collaborative partners
- Constraints on new supply
- Increasing rents
- Shift in market fundamentals
- And visionary developers.
I think the tenor of this conference has been ‘Yes there are headwinds, but the tailwinds are much stronger.’
I think we can all agree it has been a highly productive past 48 hours, but what are we going to do on Monday? This is where NAIOP has made it easy for all of us.
A focus on this year’s conference planning committee has been networking. I think most of us are not just going to put those stacks of business cards we received in a drawer. What NAIOP has encouraged is that we reach out to our new friends, think about who you met and who you already know, and how you can facilitate new connections.
Today, real estate is more collaborative than ever before. We share our lessons learned and accomplishments, we look for partners who can add value to the development process, and we look for ways to increase the transfer of knowledge to our clients.
And for all that incredible content that all the talented presenters provided – NAIOP has made it easy to capitalize on that, too. All presentations that NAIOP is authorized to provide are available on the conference mobile app. Share this content with your colleagues back in your offices.
And for the presentations NAIOP is not authorized to release – reach out to those presenters. I know most of us are anxious to dig deep into the last mile presentation, so I would expect Rob Kossar to receive many calls.
I mentioned earlier this is not our fathers’ and grandfathers’ industry, but it is not even what our industry was six years ago, when this conference was held upstairs in a ballroom a quarter the size of the one we are all sitting in.
Look around and see who your peers are – the diversity of our colleagues is growing. While there is still the need to increase diversity, there are more women than ever before here today, there is age diversity among all attendees – as evidenced by the students who we met yesterday – real estate is now a career that is desired by millennials and today’s college graduates.
I’ll leave you with a few questions to ponder on your trips home:
- Who is going to build electric charging stations at loading docks for driverless trucks?
- Who is going to identify and use data beyond the typical real estate data that is presented by CoStar and in brokerage market reports?
- What technology are you going to use or will use to evaluate its impact our industry?
- What information can I gather and share with my tenants to increase their operational efficiency?
- Who is going identify the new metrics that our clients are using today to determine facility efficiency?
- What is the next business to drive demand – retail food service, e-grocery, and, dare I say, new brick-and-mortar retail concepts?
- What firms can I collaborate with to increase the quality of services I provide?
- Retail has typically been a tight-margin business where they negotiate for pennies on rent. How will they adapt to the new economics of last mile?
- How are you going to help your tenant recruit talent? Are you going build amenities for your clients’ employees within our buildings and parks?
- Am I looking at and identifying the next disruptor that will provide me an opportunity?
What excites me most about the logistic and industrial market is that we’re talking about vision, innovation and inspiration.
For those who know me, I often speak about how real estate is unique in its ability to inspire. Our industry is adapting to demands and demographics of today’s world, and our efforts are inspiring.
So on that note, I thank all you for attending and making I.CON such a success.
Go forth and prosper, and I’ll see you at the hotel bar.”
This post is brought to you by JLL, the Social Media and Conference Blog sponsor of NAIOP’s I.CON: The Industrial Conference. Learn more about JLL at www.us.jll.com or www.jll.ca.
