What metrics to use to discover/understand industrial markets/opportunities?

If you are trying to better understand better SFR or MFR markets that will be growth opportunities, you would target markets based on metrics such as

  • Estimated population growth, minimum existing population
  • Household income in order to analyze rent to income ratios or rent vs mortgage analysis
  • Annual SFR/MFR supply underway or proposed
  • Corporate moves, tax incentives being offered by governments to private companies

That information may point to you certain counties or even certain ZIP codes that the story checks out and then you'll dive deeper into research of those particular submarkets.

I'm not super familiar with industrial real estate strategies... have worked on a few deals high level. But i'm trying to understand how I can try to "stake where the puck is going" where multifamily, SFR rental and STR is fully saturated, maybe there is opportunity acquiring smaller industrial deals?

So what sort of metrics would you filter and research to better understand industrial markets to target? Would you emphasize demographic info like housing heavily? Or is it much better to research trade data and dynamics.

Are there markets that are "growth markets" similar to Austin, DFW, PHX, Vegas, Boise,etc were all growth markets if you paid attention 3-5 yr ago to demographics you would have been skating to the puck before they all  "boomed"?

Comments (3)

Jun 29, 2022 - 1:26pm
AltRightWarlord, what's your opinion? Comment below:

The most important thing is to avoid pushing up on the supply-lines of the extremist, shadowy, marxist paramilitary SJW groups such as Soros Fund Management, the Clintons, Hunter Biden and Don Lemon. The leftist Marxists are lethally protective of their territory of cultural influence and are known to burn and raze competing properties within their chiefdoms that do not adhere to regressive, white-hating ESG practices.  

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  • Associate 2 in RE - Other
Jun 29, 2022 - 9:04pm

Look for markets with good connectivity to major transportation nodes (airports with cargo services, railroads, major freeways, and active ports). Instead of thinking about household income, think about your tenant's freight costs. The farther you are from the ports and airports, the more expensive it becomes for them to move shipments back and forth. So you want to be close enough. Also within the major markets, look for outlying submarkets that has capacity to accommodate excess demand. Look for areas that are close to a labor force -- where could your delivery drivers afford to live? 

For example, Memphis is a great industrial market because it has all of the major transportation nodes I listed above. FedEx's global hub operates out of the Memphis Airport, there's a port, and you can reach 75% of the country within 48 hours of driving or train. But it's mostly built out now, so developers started moving over to Southeast Memphis (right on the Tennessee/Mississippi state line). Only 20 mins of driving from Memphis, and there's still some land available at a discount (though I think that amount is starting to dwindle, too). 

Jun 30, 2022 - 10:33am
Sequoia, what's your opinion? Comment below:

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