The Business: Winning Industrial Investment Strategies
Nov 4, 2024
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Jordan Schnitzer, President of Schnitzer Properties, shares insights from his family's journey in real estate, transitioning from scrap metals to a leading industrial powerhouse. He discusses the advantages of flex-industrial properties over big-box warehouses due to steady demand. Schnitzer emphasizes the value of 'aggressive moderation' in business decisions, advocating for a decentralized model that empowers local teams. He also highlights the blend of data-driven analysis and gut instincts in investment strategies, illustrating the dynamic nature of the real estate market.
Schnitzer Properties focuses on flex-industrial properties to capitalize on steady demand while avoiding competition with larger warehouse developers.
The company thrives on a decentralized business model that empowers local teams to make decisions, enhancing adaptability and regional expertise.
Deep dives
Family Legacy and Business Beginnings
The episode highlights the long-standing legacy of a family business that originated with an immigrant's journey to America in 1905. The immigrant established a scrap metal business, which subsequently transitioned into a real estate enterprise led by his descendants. This transition exemplifies the family's ability to adapt and grow, as the current leader, Jordan Schnitzer, has expanded the business significantly since taking over in 1990. Today, Schnitzer Properties operates about 190 properties, encompassing over 30 million square feet across six states, showcasing a strategic focus on diversified real estate investments.
Strategic Focus on Industrial Real Estate
Jordan Schnitzer discusses his company's strategic emphasis on the industrial real estate sector, particularly flex industrial properties, which cater to smaller tenants and local businesses. Unlike larger institutional developers, Schnitzer Properties has carved a niche in offering smaller, more manageable spaces that serve the growing demand within urban areas. By avoiding competition with major players who focus on big box warehouses, the firm has positioned itself advantageously in the market. This thoughtful approach allows Schnitzer to maintain flexibility and adaptability, essential in navigating any economic shifts.
Growth Through Decentralization
The growth strategy of Schnitzer Properties is characterized by its decentralized model, empowering regional offices with greater autonomy. Jordan emphasizes the importance of having skilled personnel in various regions to make localized decisions that drive success. This approach contrasts with traditional top-down management structures, as Schnitzer opts to enable his teams to operate with a sense of ownership. The result is a company that has achieved substantial growth, from a $200 million portfolio in 1990 to a multi-billion dollar enterprise today.
Philanthropy and Art as a Lifelong Commitment
Jordan Schnitzer's commitment to philanthropy, particularly in the arts, is woven into the fabric of his personal and professional life. Growing up in an environment that valued art, he has built an impressive private art collection and actively supports art education and outreach programs in underserved communities. This dedication stems from a belief that art can enrich lives and provide an avenue for community engagement and personal development. By sharing his collection and funding various initiatives, Schnitzer hopes to foster a deeper appreciation for the arts and inspire future generations.
Jordan Schnitzer shares the strategies that propelled his family’s business from scrap metals to West Coast real estate powerhouse. Plus insights on building a thriving decentralized business and the benefits of balancing data-informed and gut instinct investment decisions.
Insights to Share:
1. Look at competition as well as returns. Schnitzer Properies’ prefers flex-industrial properties over big-box warehouses because there is steady demand and less competition.
Do more, but be mindful of how much you can do. Jordan Schnitzer refers to his approach as “aggressive moderation.” Over-extending yourself can sacrifice long-term stability.
Trust your leaders to use their local expertise. Schnitzer Properies embraces a decentralized business model with local teams empowered to make decisions and grow the business.
Embrace data, but don’t ignore your experience. Utilize a data-driven approach combined with gut instincts to make informed and timely investment decisions.
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