Join Douglas Kiersey, CEO of Dermody Properties, as he discusses trends in industrial real estate such as automation and taller buildings. Explore challenges like meeting power demand and managing waste. Learn about successful vs. canceled projects, the rise of million-square-foot buildings, and market strategies for industrial real estate.
Quality tenants prioritize location and functionality over unique building features for long-term value.
Federal Reserve rate shifts impact industrial real estate valuations, signaling market distress and asset value adjustments.
Industry professionals must adapt investment strategies to evolving market dynamics for optimal returns in the distressed real estate landscape.
Deep dives
Location and Functionality over Aesthetic Differentiation
Focusing on location and functionality rather than aesthetic differentiation is crucial in attracting quality tenants and ensuring long-term value. While some may believe that unique building features differentiate properties, the reality is that meeting minimum quality standards and having a prime location drive tenant demand more effectively.
Investor Demand and Market Distress
The discussion on customer demand extended but did not delve into investor demand and capital market dynamics. With the significant impact of Fed rate shifts on asset valuations, the distress across real estate markets is still unfolding. The current challenges in capital markets, influenced by interest rate changes, signal a shakeout effect impacting asset valuations.
Industrial Real Estate Market Shifts
Amid the evolving capital market conditions and distressed real estate landscape, industrial real estate faces significant valuation adjustments. The transition from ultra-low to moderate interest rates has led to notable shifts in industrial cap rates and investor ROI expectations, indicating a substantial transformation in the market.
Navigating Distressed Real Estate Landscape
In the face of ongoing distress in real estate markets, particularly influenced by Federal Reserve rate adjustments, industry professionals are compelled to navigate a challenging landscape. Understanding the implications of changing market dynamics and adjusting investment strategies to align with evolving valuations are critical in mitigating risks and optimizing returns.
Upcoming Podcast Episode - Focus on Investor Demand
For the upcoming podcast episode, a deeper exploration of investor demand, capital market dynamics, and the impact of Federal Reserve policies on industrial real estate valuations may provide valuable insights. Insights into market shifts, investor sentiment, and strategies to address market distress could offer a comprehensive view of the current industrial real estate landscape.
This week I had the honor of being joined by Douglas Kiersey, CEO & President of Dermody Properties.
We had a fascinating chat about the industrial real estate market and Doug shared many great insights that he's gained from purchasing and developing over $8B worth of warehouses and distribution centers.
About:
Douglas A. Kiersey, Jr., is CEO and President of Dermody Properties and oversees all of the company’s operations and strategic initiatives including capital formation, acquisition, development, and investment management activities. He is a member of the Dermody Properties Advisory Board and chairs the company’s Executive and Investment Committees. Since Mr. Kiersey joined the company in 2011, Dermody Properties has developed and acquired industrial logistics assets with an aggregate value in excess of $8 billion.
Mr. Kiersey has more than 35 years of experience in logistics properties in major U.S. markets. Prior to joining Dermody Properties, he spent 17 years at Prologis in various senior roles. Prior to joining Prologis, Mr. Kiersey worked at Cushman & Wakefield for 11 years.
Mr. Kiersey earned his Bachelor of Science degree in business administration from Oregon State University, and an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University where he is an occasional guest lecturer and a member of the Kellogg Real Estate Advisory Council. He is also a member of the Urban Land Institute (ULI) and the Society of Industrial and Office Realtors (SIOR).
Dermody Properties website: https://dermody.com/
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