Industrial Real Estate Wisdom From a 46 Year Industry Veteran
Oct 29, 2024
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Obie R. Silverwood is a seasoned industrial real estate broker and investor with 46 years of experience and the author of 'Industrial Real Estate Investing and Management.' In this conversation, he shares timeless tips for new brokers on cultivating lasting client relationships through personalized service. He also discusses the importance of avoiding common pitfalls in industrial property investments and advocates for conservative investing to achieve long-term financial independence. Don't miss his insights on navigating ADA compliance and the benefits of small industrial properties!
Obie Silverwood emphasizes the importance of location and tenant financial vetting to mitigate risks in industrial property investments.
The podcast underscores the necessity of proactive tenant relationship management and compliance inspections to safeguard against legal and operational issues.
Deep dives
Obi Silverwood's Journey in Industrial Real Estate
Obi Silverwood shares his extensive journey in industrial real estate, detailing his late start at 32 due to personal challenges, including a failed marriage. He eventually joined Grubbin Ellis, where he experienced initial financial struggles before successfully closing his first deals, including a 22-unit apartment building and various industrial properties. Silverwood emphasizes the importance of resilience as he transitioned from learning to gaining substantial success, which ultimately enabled him to establish his own office in a developing area of Irvine. By the age of 45, he accumulated a net worth in the millions through strategic investments in small industrial buildings, focusing on sectors that were less volatile.
Defining Characteristics of Good Industrial Real Estate Investments
Silverwood outlines the key attributes of a successful industrial real estate investment, emphasizing the significance of location and building design. He advocates for a standard structure featuring minimal office space, adequate loading access, and flexibility, minimizing specialization to reduce potential risks tied to specific industries. Ideal tenants should be reliable and possess sound financial records, emphasizing the importance of thorough financial vetting of prospective tenants. Silverwood also advises avoiding renters associated with hazardous operations, as their risk may jeopardize the safety and compliance of the property.
Navigating Tenant Relationships and Risks
The podcast highlights the critical nature of tenant relationships in maintaining a successful industrial property. Silverwood advises property owners to be aware of tenants’ operational activities to avoid issues such as hazardous material handling and compliance violations; thorough inspections during lease renewals are essential. He shares an experience with a former tenant whose operations created significant clutter, leading to the decision not to renew their lease. Silverwood also emphasizes the risk of unnecessary renovations requested by tenants, advocating that landlords should uphold initial property conditions to avoid future liabilities.
The Importance of ADA Compliance and Proactive Management
Silverwood delves into the complexities surrounding ADA compliance, illustrating the legal pitfalls landlords face regarding their properties. He stresses the necessity of conducting inspections to ensure compliance while implementing contractual protections to shield landlords from potential lawsuits stemming from tenant-induced violations. Notably, an instance involving an ADA complaint reinforced his strategy of including indemnification clauses in leases to safeguard himself from legal repercussions. Effective management of properties includes regular inspections and ongoing tenant communication to swiftly address any compliance-related concerns, which is vital for risk mitigation.
This week I'm glad to be joined by Obie R. Silverwood, a seasoned expert with over 46 years of experience as an industrial real estate broker and investor. Obie recently released his book, Industrial Real Estate Investing and Management, which provides a step-by-step guide on buying, leasing, managing, and selling industrial properties.