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Demand and Supply

By: Steve Lewis

A Strong Market is Drawing New Players into the Industrial Real Estate Game

When the stock market was booming, more and more young professionals sought to enter the brokerage game. With a housing market that seemed to have no top, “Realtor” became an even more desirable designation. Even more so in industrial real estate, clearly the hottest sector in the CRE industry.

Jon Reno, SIOR, managing director, JLL in Los Angeles, says we are “absolutely” seeing the trend of young, ambitious individuals who are eager to get in on the action. “We’re especially seeing it amongst recent college graduates who have family members known for having a career in asset classes other than industrial—i.e., office or retail,” he says. “Their own father or mother is encouraging them to pursue industrial real estate as a career choice rather than follow them into the industry.”

“In the Des Moines [Iowa] market, we have an experienced group of industrial brokers that have worked in the commercial real estate market for many years,” adds Adam Kaduce, SIOR, senior vice president and managing director with R&R Real Estate Advisors.

“These brokers have grown their teams as deal volume has increased, and we have seen a number of young professionals join the industry and seek out opportunities with industrial real estate teams.”

In Iowa, he notes, there is a mix of metro and rural industrial properties. This then creates a mix of inventory and deal scenarios, which “can be a great opportunity for new brokers to learn the business.”

“When you start to see everyone have success and buildings lease up before they’re finished, that absolutely draws more interest,” summarizes Brian Young, SIOR, senior vice president and managing broker, Cushman & Wakefield | Thalhimer, in Greenville, S.C.


Is this flood of new industrial brokers a good or bad thing for the market? “I think overall it’s a very positive sign, particularly when you talk about diversity in our industry,” says Reno. “A large segment of these newcomers we see are females and minorities right out of college. It’s an incredible opportunity for SIORs to connect with these individuals and mentor them now in the fundamentals of industrial real estate—and it’s what our clients are now demanding as well.”

“I think the experience of SIORs shine in challenging times,” says Kaduce. “While we are in a very strong industrial market, that creates greater competition for space, returns, and product. It takes an experienced broker to deliver for their clients, and SIORs represent the most experienced brokers.”

He shares that he has seen multiple industrial deals challenged by supply chain problems, issues with meeting deadlines, or competition for limited vacancy, “and SIORs have worked together to solve those challenges.” Clients, he says, benefit from the experience of SIORs to overcome current challenges to get the deal done.

“Our company, R&R Realty Group, has been developing industrial projects in Iowa and Nebraska, and I have leaned on SIORs in larger markets for insight on industrial development trends and features that we should bring to our developments,” Kaduce continues. “We monitor features like clear heights, sprinkler systems, dock door configurations, etc., and bring those features to our market. I learn from SIOR colleagues in larger markets, and that leads us in bringing modern institutional projects to our market.”

“We’ve seen a few new brokers, but not many; we’ve seen new developers and institutions,” adds Young. “What that’s done is introduce us to a much larger pot of inventory and developers that we can be marketing to. There seem to be more regional players coming in and developing, and after development they end up selling to REITs and lots of big institutional money out of the Northeast.” All of this activity, he continues, “brings new ideas and new strategies.”


And what about SIORs who currently specialize in other sectors, like office space? Have they found ways to shift into industrial? “Our market has not seen a lot of brokers switching sectors, but some generalists spend more time on industrial deals as the market has heated up,” notes Kaduce. “The brokers that have had the most success in making the change are the brokers that join experienced teams. The experience they gain from their colleagues and having an opportunity to watch and work deals has sped up their success.”

“We have not seen many office or retail brokers come to industrial,” says Young. “The newest come from more boutique offices, where generalists did some industrial. A lot of times you see well-established teams and/or veterans bring them in and put them on a team and educate them.”

Reno is not so sure that switching is a good idea. “If the role was switched and suddenly industrial space was not ‘in favor’ and I had to make a choice, I would still stay the course in industrial,” he says. “I guess it really depends on where you are in your career (and the market you work). For me in Los Angeles, I would essentially be starting my career all over again, so I look at it from that perspective. I think it would be incredibly difficult for someone in the office sector to jump over to industrial today.”

Young adds that he has seen some “new” industrial brokers in the form of folks with experience coming in from out of town. About 10 or 15 years ago, he notes, the number of brokers in the market stayed pretty much the same. “Over the last two to three years we’ve seen that balloon; maybe 12-15 were industry-focused—three just in our office,” he says.

“We’ve certainly seen some new brokers join from all different genres,” he adds. “If it’s affected us, it’s been in a positive way; they have more relationships, so when a new broker comes here, they have a network of family and friends, so it exposes the market to new relationships.”

That has certainly brought more competition to the market, he says. “While the pie has gotten bigger, there are certainly more people feeding off of that pie,” he explains.

"I think one of the most important decisions newcomers have to make is aligning themselves with a successful team in any given submarket..."


Of course, young brokers who are new to the industrial market have never experienced a downturn—which, as all of us know, is not only inevitable, but has possibly arrived. Will they survive?

“That’s a great question—and something I always try to preach when talking to newcomers at industry events or interviews,” says Reno. “I believe they all know the hard work and tenacity it takes to become successful, but there is so much more to it than that. I think one of the most important decisions newcomers have to make is aligning themselves with a successful team in any given submarket, and the senior members of those teams that have the qualifications and ability to mentor you—even through the downturns.”  

Such a team, he explains, is able to pivot their business plan to accommodate the ever-changing market conditions and will in some way protect those new to the space. “It all comes down to mentorship and leadership from the top down,” says Reno.

“Now, a lot of the newer ones have only seen good times; we’ve never seen what we’ve seen the last three to four years,” adds Young. “Those that know how to hustle a little bit, to go to find a relationship and bring it to opportunity—we call it ‘grinding through the deal’—will be fine. Those who are not as savvy will be some of those who are not able to weather the storm.”

“For brokers that are on a team, they’ll shift their focus to other markets or rely on their corporate services work,” says Kaduce. “My experience is that SIORs find deals to work on, regardless of the economy. They have relationships that lead to repeat business and new clients seek them out for their experience in difficult markets.”

Young says that his team members are coached to know the market and be able to communicate that to their clients. “Clients need to be aware of the market fundamentals so they can adapt their business and real estate decision to the current environment,” he explains. “Being an advisor and advocate for our clients, we owe them the most information to make an informed decision.”

"Being an advisor and advocate for our clients, we owe them the most information to make an informed decision."

The bottom line, he says, is that the experience of SIORs comes through in the highs and lows, because they have the experience of a cyclical market. “SIORs in our market are quick to remind less experienced brokers that the market doesn’t always go up, and to stick to the fundamentals, keep prospecting and networking, and save for a rainy day,” he shares. “For new brokers, developing high quality relationships with future customers is a top priority—regardless of the economic conditions.”

Sponsored By SIOR Foundation
This article was sponsored by the SIOR Foundation - Promoting and sponsoring initiatives that educate, enhance, and expand the commercial real estate community. 
The SIOR Foundation is a 501(c)(3) not-forprofit organization. All contributions are tax deductible to the extent of the law.


Adam Kaduce, SIOR

Jon Reno, SIOR

Brian Young, SIOR


Media Contact
Alexis Fermanis SIOR Director of Communications
Steve Lewis
Steve Lewis
Wordman Inc.

Steve Lewis is a freelance writer and president of Wordman, Inc. He can be contacted at wordmansteve@gmail.com.