Latest / Industrial Advisors / Navigating the New Industrial Landscape: Power, Labor, and Location Strategy

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Navigating the New Industrial Landscape: Power, Labor, and Location Strategy · Industrial Advisors

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  He saw something in me that said, Hey, you've got all of
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  this corporate America experience advising and coaching and delivering
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  solutions into corporate America.
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  I think you'd be really interested or you could be really interested
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  in, uh, helping us grow and expand our national build suit business.
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  And I said, listen, I'm actually taking a new job with ERNs and Young to run
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  their global managed services business.
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  I don't know if real estate's for me.
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  He said, well, just come meet with me.
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  Welcome to our Industrial Advisors podcast.
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  Uh, you have Bill Condon.
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  We have Kyle Box, uh, pinch hitting for, for Matt McGregor today.
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  And our guest today is uh, mark Pascal, who is Senior Vice President National
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  Build of Suits for Sun, sun Cap Property Group mark's based in Charlotte.
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  And, uh, appreciate you joining us.
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  Maybe we start with just a quick introduction of, uh, your kind
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  of background, how you got to the position that you're in and, uh,
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  and what you guys do specifically.
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  Sure.
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  Well, well, bill and, and Kyle, thanks for having me.
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  Uh, pleasure to be on this.
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  I've heard about the podcast.
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  I even started to listen to it some on the way, on the way.
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  That's fantastic.
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  Yeah.
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  So you guys crank out some really quality stuff, and I think what you're
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  doing is, is really cutting edge for what the commercial real estate
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  industry as a whole kind of needs.
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  Right.
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  It's a tool to help educate the younger generation.
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  It's a tool to tie people to what you guys are doing.
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  So I, I commend you on what you're doing with the podcast.
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  Appreciate that.
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  Appreciate that.
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  Yeah, thanks for joining us.
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  Yeah.
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  Yeah.
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  No, it's, it's a pleasure to be here.
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  So, the way I frame my career is I, I've spent my entire career.
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  Building and scaling and advising businesses.
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  Initially I started right outta school working for a media company.
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  We were selling everything from online media solutions to corporate
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  America, to radio advertising spot.
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  I actually worked on the radio for a little bit.
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  Did you, um, during that time, you forgot the part where you
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  were a football player at UNC.
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  So what position did you play?
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  I played linebacker at UNC Linebacker.
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  And inside or outside I played middle linebacker, middle linebacker.
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  What number were you?
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  35 pounds ago.
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  What number were you?
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  41. 41, okay.
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  I was thinking like a middle linebacker, like 44, 55, you know?
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  Yeah, yeah, yeah.
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  Just a real aggressive number.
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  That's right.
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  41. There you go.
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  And I, I was actually making a joke earlier.
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  I got my first experience introduction into commercial real estate.
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  Right outta school.
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  I had accepted a job offer.
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  I was up in New York and got a call like the day, it was Sunday.
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  I was supposed to start Monday and got a call.
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  Hey, uh, don't worry about coming into the office today.
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  Um, you've lost your job before you started.
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  So that was a rude awakening.
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  Real What, what time, what, like what year was that?
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  2008, 2009. Okay.
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  So it was during the Lehman brother, like it was like
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  downturn, crisis mode, everything.
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  Yeah.
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  Yeah.
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  Crisis.
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  And so that was, that was awakening.
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  Did you already move there?
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  Were you already living there?
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  No, I just was up there getting ready.
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  Okay, got it.
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  Yeah.
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  And got the call basically saying, Hey, like don't worry about starting
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  at work, try to find something else.
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  So that's how I got into the, the media business and that was my first sort of
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  foray into advising Corporate America.
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  Yeah.
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  Um, it was a crash course.
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  I did that for a small period of time and got the opportunity to go join a.
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  Founded by Terry Pegula, who now owns the Buffalo Bills on the
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  sports agency side of the business, which I was passionate about.
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  I'd seen guys throughout my playing career make poor decisions as it
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  relates to their business, you know, their business alignments, if you will.
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  Sure.
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  So I thought there, there could be a way for us to differentiate how
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  we support guys that have immense talent and how we could support
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  them on the field and off the field.
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  We grew that business from basically zero to 17 clients.
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  Reverse merged with a group down in Atlanta, grew that business.
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  Terry had the opportunity to buy the bills.
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  And at that point we were gonna be acquired by CAA, which is the
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  largest talent representation firm in the, in the world.
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  And during that period of my life, I was enjoyed it, but I knew there
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  was something else out there.
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  Um, and actually had the unique opportunity to join an up and coming
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  sort of growth hyper-growth company.
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  Called Axiom.
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  It's an alternative legal services provider, also with management consulting
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  arms of their business, doing everything from like large scale m and a, um,
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  and integration work to outsourcing work to alternative legal services.
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  This is embedding attorneys to go solve different corporate America problems.
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  Worked within the real estate group, worked within procurement.
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  Worked within sales.
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  So I got to a crash course for seven or eight years in understanding
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  how corporate America works and the challenges that corporate America is often
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  placing on their relationship partners.
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  And so I viewed myself and I was a relationship partner to some of the
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  biggest companies in in the world, and it gave me a tremendous amount of exposure
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  and experience into what differentiated us and what allowed us to go win work
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  versus when we, when we didn't, or when the other other providers were chosen.
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  And I've had a relationship with the founding partner of our company.
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  That story's phenomenal.
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  I'll share that with the group too.
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  But he saw something in me that said, Hey, you've got all of
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  this corporate America experience advising and coaching and delivering
• 4:40
  solutions into corporate America.
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  I think you'd be really interested, or you could be really interested in.
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  Uh, helping us grow and expand our national build suit business.
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  And I said, listen, I'm actually taking a new job with ERNs and Young to run
• 4:52
  their global managed services business.
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  I don't know if real estate's for me.
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  He said, well, just come meet with me.
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  So I sat down with him and I was like, all right, this sounds, this sounds great.
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  Uh, and then COVID happened, right?
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  Yeah.
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  And so the old story is, you know, we had two of our businesses
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  were spending, we were taking a business public at my old company.
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  I was gonna go either work with one of those Spin cos running part of
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  that business or go work for ey.
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  And to Flynn's credit, he was like.
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  He's like, you, you could do something special within the real estate business.
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  And, and we'd love to, to entertain that.
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  And my wife, to her credit also agreed, uh, with Flint.
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  That, that that's the decision.
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  That's, that was great idea.
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  That's somebody that you trust that's, that's older, that's, that's
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  seasoned, that's grown and built a business and my spouse, right.
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  Both saw something that I didn't necessarily see and so there's a
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  little bit of a leap of, leap of faith.
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  But it was also tied into what Sun Cap had really been able to, to build and do for
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  clients in a really short period of time.
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  Flint and our, our team, um, developed a relationship with FedEx Ground
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  that took a couple years to develop.
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  2008, 2009, they started Sun Cap Property Group.
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  And I've told this story a lot to folks.
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  They were challenged by FedEx Ground.
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  Hey, if you want to work with us, help us get in New York City.
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  And Flint was on 50 flights that year to go help 'em figure out how
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  to do a, a project in New York City.
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  Fast forward, like in Manhattan, New York City.
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  Like the, in the, in the five boroughs.
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  Yeah.
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  Yeah.
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  Okay.
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  Um, and you wanna talk about like impossible to do, right?
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  Right.
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  Yeah.
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  They couldn't get in it, couldn't get in New York, couldn't
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  find the right solution there.
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  And so to the team's credit, that helped launch the relationship
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  that we have with, with those guys.
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  And sort of through that they were hyperfocused on rolling out
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  their expansion plan 2011, 1213.
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  And since then we've done.
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  You know, north of a hundred projects for those guys.
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  Yeah.
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  Are they your biggest client?
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  They are our biggest client by volume.
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  Yeah.
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  Still.
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  Still.
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  So you started that relationship started in oh 8, 0 9, yep.
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  2025. That's still going strong.
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  That's still going strong, and that's just a testament to
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  the work that we do for them.
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  Sure.
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  Right.
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  I think what we've positioned ourselves at really in the market for all corporate
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  clients, but specifically for FedEx, is.
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  Give us your hardest, most challenging requirement.
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  'cause we've got the technical expertise, we've got a team structure that
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  allows us to go solve, whether it's real estate development challenges,
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  entitlement permits, you know, wetlands.
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  We've got the right team to drive our consultants to get to the right answer.
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  Yeah, we've got a really sharp capital team that all sits up in Pittsburgh
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  that's laser focused on driving the sharpest and best capital solutions.
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  And we hire, you know, former general contractors to come in.
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  And run our projects and bid out projects to the best general contractors that
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  makes sense for a specific project.
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  So when you pair all three of those groups together, we are able to deliver outsized
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  and, and, and differentiated, you know, experiences and results for clients.
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  And so we've taken that, that sort of approach with our big client.
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  And I was hired again six years ago, plus or minus.
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  And there's a lot of work that was done between 2015 and 2020
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  to diversify our business.
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  Grow our client base, grow our broker relationship network.
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  And so I've just been, I think, a beneficiary of, of a lot of work and
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  the groundwork that's been, that's been laid to date and we picked up
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  other large groups that you could probably imagine we do work with.
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  And so I stepped into a role that that said, Hey, help us go and
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  expand our client base, expand.
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  Our reach, expand our relationships.
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  And for us, we're not a volume-based business.
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  A lot of, a lot of developers are, are trying to do as much work as they can.
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  Right.
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  And we're heavily oriented to relationship business.
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  Uh, on the development side, we're after how do we solve our client's needs?
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  Whatever it is, the client, we say this all the time, let's keep
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  the main thing, the main thing.
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  If the client's happy, if we're delivering an exceptional experience,
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  if we're solving really hard problems, if we're over communicating,
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  if we're hyper responsive.
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  The clients will feel that and see that.
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  And so I've, I've really appreciated the opportunity to work with a bunch
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  of net new clients over the last six years that we've tailored our
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  approach to, to allow them to go find success within the real estate group.
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  That's awesome.
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  Yeah, that's great.
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  So you touched on what drew you to Sun Cap initially, and obviously
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  you know the build a suit.
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  Environment in business and just development in
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  general is hyper competitive.
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  You have to have a competitive advantage to go win new business.
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  Right.
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  And you touched on what Sun Cap's differentiator is, but in today's market,
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  how are you guys evaluating either build a suit requirements on the individual
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  level or evaluating new clients to take on, you know, on a portfolio?
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  Wide scale.
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  Like you said, you guys are relationship focused.
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  How are you evaluating both of those things?
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  Yeah, it's a great question.
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  I would say that our true clients, right, are twofold.
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  We have our broker clients, which are in the tent and in the
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  weeds with our end user clients.
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  Servicing those broker clients with the same urgency and the same rigor that we do
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  with our end user clients, I think really differentiates us at least early on.
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  We'll get requests all the time, Hey, help us understand this site.
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  Right.
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  This is a site that we're looking at.
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  Can you guys just kind of peel through it and give a developer's perspective?
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  Is it developable?
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  Yeah.
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  Is that railroad an issue?
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  Is that offsite gonna be a potential issue?
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  And so we'll lead them down a path to say.
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  From our perspective, here's the nuances and challenges of the site.
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  Here's how we think you can overcome them.
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  Here's what we'd recommend you guys do moving forward if you're,
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  if you're keyed in on the site.
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  So it's servicing our broker clients in a lot of different ways.
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  It's just one example.
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  We'll get capital questions from broker clients.
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  We'll get all different kind of questions.
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  What does it cost to build this in Santa Fe?
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  And so we've developed in 250 markets.
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  Yeah.
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  Have you done big deals basically everywhere across the us Yeah.
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  That, that's another great point is our reach is, is really unique because we've
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  been in 250 markets all over the country.
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  And so our relationship network, our experience in those markets allows us
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  to get to the right answer really fast.
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  Mm-hmm.
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  And with conviction.
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  And I think that allows us to continue to build trust with our clients.
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  Our broker clients and our end user clients that what we're telling
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  you is is what we know to be true.
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  And so I think that's part of it.
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  I also believe that as the markets have shifted over the last two or three years.
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  There's more and more developer controlled sites that people
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  haven't put into production.
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  We're always gonna have to compete with groups that control
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  a hundred acres in Atlanta.
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  A lot of our clients come to us and say, help us solve this.
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  Go help us find a site.
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  Go help us solve this.
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  Here's your, you know, you got stiff competition.
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  But what our clients have found is that not everybody's willing to play ball
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  on their site, their building, their plans, their capital, and it allows
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  us to come in with a really, a fresh look to say, well, this is how we could
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  potentially solve this for you guys.
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  And I do think that that sort of helps us differentiate us with our clients as well.
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  The other part of this is capital markets has been crazy.
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  It's, it's hard to price things.
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  Yeah.
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  Yeah.
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  I think the real cool thing about Sun Cap, what also drew me to Sun Cap is.
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  Our founding partners conviction around long-term leases with credit
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  tenants, regardless of location.
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  We'll go wherever our clients need us to go.
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  We'll build 'em whatever they need to build.
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  'cause we're in the business for them.
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  We're just sort of a byproduct of that.
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  Right, right.
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  That's a great advantage to have though.
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  Yeah, I, because not everyone will go all, not all build to sue companies.
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  We'll go to whatever market, you know.
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  Well, I've done a project in Kennewick, Washington.
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  Do you know who that is?
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  I sure do.
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  Tri Cities.
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  Absolutely.
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  What'd do there?
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  Do you remember?
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  Yes.
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  Yeah.
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  I did 110,000 square foot build a suit for a, with like a food,
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  a fruit company or something?
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  Food.
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  Food company.
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  Food company.
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  Got it.
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  Yeah.
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  Yeah.
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  And so it's, it allows us to be incredibly nimble, incredibly flexible.
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  Incredibly sharp, and we can make those decisions.
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  We're empowered to go make those decisions.
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  We talk a lot, a lot about ownership within Sun Cap.
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  We want to make sure that everybody on the team feels an
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  ownership for the project success.
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  Yeah.
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  And they're empowered to go make decisions that can advance
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  projects when clients pick us.
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  It's because surety, reputation and speed, because we can make.
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  Decisions quickly to the benefit of our clients.
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  Our clients, on the other hand, don't always make decisions very fast.
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  I experienced that, but we wouldn't know anything about that.
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  Yeah.
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  But at the end of the day, like for us, it's about making sure that we're
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  ingrained with the right groups of folks that understand the value that we can add.
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  There's a true partnership respect there and a true trust that's built over.
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  A lot of what I call spec work.
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  Like spec.
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  We're specing our time.
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  We're gonna pour into those brokers and we're gonna pour into those
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  clients because we care, right?
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  Yeah.
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  'cause we, we want to see our brokers and our clients find success.
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  And if a deal comes, great.
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  If it doesn't, that's fine too, because we're just after
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  the long term relationship.
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  For them to make us their first call.
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  And a lot of groups just aren't built that way.
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  Um, from a time and resource standpoint, we're fortunate to be built that way.
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  Sure.
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  No, that's great.
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  I mean, you know, in our industry, the relationship part
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  of it is trumps everything else.
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  So we talked a little bit about location.
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  Are you seeing any trends from end users that you're working with on
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  certain locations that they're, they're focused on or any, anything that they're
• 13:32
  looking for from a location standpoint?
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  Yeah, it's a great question.
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  And I'm sure you all have seen it, but we're, we're definitely seeing
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  it in the markets that we're active.
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  So Sun Cap, to sort of back up for a second, sun Cap's core business
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  and the way we started our business is a build to suit business.
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  We're gonna solve client needs all over the country.
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  As we've diversified our business.
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  We've added a speculative business on the east and a
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  speculative business on the west.
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  We're active in those markets.
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  Um, and we've added recently in the last year.
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  An acquisitions business.
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  And so this, this unique, I think, structure allows us to stay hyper-focused
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  on the projects that we need to stay focused on while also staying
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  collaborative with within the groups.
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  And so I've got unique perspective on some of that as it relates to where
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  clients want to go or what's driving that.
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  I think it comes as no surprise manufacturing's coming back.
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  Yeah.
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  In a big way.
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  And that looks and feels a lot of different ways when you
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  look at like industry verticals that are, that are busy.
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  Yeah.
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  It's groups that like we, we would've not have thought to be
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  busy three or four years ago.
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  Right.
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  Obviously data center work is, it's got every headline and that continues
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  when you, when you combine data center, gold storage, manufacturing,
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  all of those require a ton of power.
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  Yeah.
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  Yeah.
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  Um, and so power continues to be one of the first hurdles, especially when
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  we're working with a client and they're like, Hey, what do you think Yeah.
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  About this market?
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  And it's like, well, these four sites could be great sites.
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  How much power do you need?
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  Right.
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  And here's the long lead items that are gonna take to get
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  you guys operational by 2027.
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  And so power's leading the conversation more and more, which power was
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  always a part of it, but now that we've got such heavy power users, it
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  continues to drive the conversation.
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  Labor O obviously continues to be a big part of that.
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  More for manufacturing Sure.
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  Than for the other two asset classes and distribution as well.
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  But when you've got Reshoring, onshoring, nearshoring.
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  More investment in the United States.
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  I had this conversation with somebody the other day.
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  I'm as bullish on North America and our economy and the investment that's
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  taking place, especially in our business than I think I I've ever been.
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  Yeah.
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  Even during the boom of COVID, we've got a little bit of
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  rate relief hopefully coming.
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  I mean, the 10 years now under four.
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  Yeah.
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  So there, there feels to be some momentum building, but it continues to be sort
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  of tamped down, at least in some regard.
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  By power and labor.
• 15:41
  Yeah.
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  Power and labor.
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  Yeah.
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  Those are the, that's the name of the game.
• 15:44
  Yeah.
• 15:44
  But this, the, again, the smile states, right.
• 15:47
  The southeast continues to be super busy.
• 15:49
  A lot of, a lot of requirements in, in that market, uniquely,
• 15:52
  sort of the Midwest.
• 15:53
  Yeah.
• 15:53
  Midwest has been great.
• 15:54
  Has been, has been busy.
• 15:55
  We've got a lot of requirements in the Northeast with one client right now.
• 15:59
  So it's, it's really, I would say a North America story.
• 16:03
  Mm-hmm.
• 16:03
  Um, the investment, the energy.
• 16:06
  I'm as excited as I've ever been to be in industrial real estate.
• 16:09
  Yeah, that's awesome.
• 16:10
  Yeah, us too.
• 16:10
  So glad, glad that you have that same outlook.
• 16:13
  Yeah.
• 16:13
  So with the challenges with power then, but, and then combined with
• 16:16
  the momentum that you're, that you know, you feel, I think we all
• 16:18
  feel in the North America market.
• 16:20
  How do you see the build a suit model and business evolving
• 16:23
  in the next five to 10 years?
• 16:24
  It's another great question.
• 16:26
  I'm a big believer in technology enabled solutions.
• 16:29
  It's sort of how I grew up in business is providing differentiated services
• 16:33
  to our clients that were tech enabled.
• 16:35
  Whether it was through machine learning or the early beginnings
• 16:38
  of artificial intelligence, and this is like seven, eight years
• 16:40
  ago before this was mainstream.
• 16:42
  How do you get to the right decision faster?
• 16:44
  And I think that in our business and in the build to suit business,
• 16:46
  technology's going to continue to enable.
• 16:49
  Us as developers and you all as brokers to solution set faster problem, solve
• 16:55
  faster, get to the right answer faster.
• 16:58
  So, and for your clients, right?
• 17:00
  They can do a lot of this work too right now upfront.
• 17:03
  And so it's been interesting to see how technology.
• 17:06
  And real estate's a slow adopter of technology.
• 17:08
  We've kind of always been that way, but I do believe that we're on the
• 17:11
  very early stages of a revolution within tech, within our real estate
• 17:15
  development, group of tech, enabling our solutioning for, for corporate
• 17:19
  America and for speculative development.
• 17:21
  If you can get the right data and if you can get to the right answer, if
• 17:24
  you can find the right sites with speed and you can site plan 'em faster with
• 17:28
  less, you know, less leakage or less risk, there's tremendous benefit to
• 17:31
  how you can get to the right again, the right answer faster for clients.
• 17:34
  So I think technology's gonna be a big part of what we see over
• 17:36
  the next five to 10 years, I think with the big beautiful bill.
• 17:39
  One thing we've heard from clients, which I found to be interesting is.
• 17:43
  Um, accelerated depreciation obviously is back.
• 17:45
  There's, there's an, uh, a portion of that bill that allows
• 17:49
  you to depreciate manufacturing focus components within the box.
• 17:53
  So there, there will be, I think, more and more clients that are wanting to
• 17:56
  own some of their assets, especially if it's a specialized facility.
• 17:59
  That's right.
• 18:00
  Yeah.
• 18:00
  They have a bunch of infrastructure in it.
• 18:01
  That's right.
• 18:02
  Right.
• 18:02
  Yeah.
• 18:02
  So I, I think that is another part.
• 18:05
  Of, and I'll call that just capital solutioning.
• 18:07
  Just generally I think that we'll continue to go through a reorganization
• 18:13
  of how folks are thinking about real estate as an investment, right?
• 18:17
  There was this like real risk off period in time.
• 18:19
  I do believe that corporate America now wants to potentially invest in
• 18:24
  their, their real real estate, and that can take many different shapes
• 18:27
  and sizes, but that's one of them.
• 18:28
  It's like, as you mentioned before, it's a hyper competitive business.
• 18:31
  I also think that.
• 18:33
  With the lack of spec product that's been pushed forward over the
• 18:37
  last two or three years, takes a couple years to get that restarted.
• 18:40
  I do think there's gonna be a unique window here for the build suit business.
• 18:42
  I agree.
• 18:43
  Yeah.
• 18:43
  To go and solve client needs and one of the other things and get land sites
• 18:46
  that maybe developers are just that.
• 18:48
  That's right.
• 18:49
  Get out.
• 18:49
  That, that are ready to get out.
• 18:50
  Yes, exactly.
• 18:51
  That's right.
• 18:52
  And, and we're seeing that, um, of course, yeah.
• 18:54
  Where, where you get tasked, Hey, can you guys go solve this?
• 18:58
  And it's like, Hey, this is controlled by a developer.
• 19:00
  They're said, the client says, go, go see every, they'll, they'll let go of it.
• 19:03
  And more often than not right now they're saying, yeah, we'll, right.
• 19:05
  We'll trade out of it.
• 19:06
  Right.
• 19:06
  So that's, that's an interesting development.
• 19:08
  So all this stuff has been really beneficial and appreciate you,
• 19:13
  you sharing your knowledge.
• 19:14
  Last question, you played football at, at UNC?
• 19:17
  Yep.
• 19:18
  Okay.
• 19:18
  Uh, maybe the best uniforms in college football.
• 19:20
  No doubt.
• 19:22
  I would agree.
• 19:22
  No doubt.
• 19:22
  I'll say Ole Miss is making a run to like, in in that discussion.
• 19:26
  They, they're taking the baby blue a little bit.
• 19:27
  They are she color?
• 19:29
  Yeah.
• 19:29
  Yeah.
• 19:29
  Um.
• 19:30
  So how long's Bella, you're, you're a former player there.
• 19:33
  How long is Belichick gonna last as the head coach there?
• 19:36
  That's a great question.
• 19:37
  36 months plus or minus.
• 19:39
  Yeah.
• 19:39
  Okay.
• 19:39
  Yeah.
• 19:39
  That's really the over under, right?
• 19:41
  I had this conversation with a friend earlier.
• 19:43
  You can do nothing in seven weeks.
• 19:45
  Yeah, right.
• 19:45
  Right.
• 19:45
  From from a program, whether that's business, whether that's football.
• 19:50
  Seven weeks is not a fair barometer of, of the program and the
• 19:54
  culture you're trying to build.
• 19:55
  I will say that there's, there's obviously been distractions and
• 19:58
  there's been more noise just around UNC football generally when you hire
• 20:01
  the best coach that's ever won it.
• 20:02
  Yes.
• 20:02
  So I think we've gotta be patient.
• 20:04
  As an alumni base, as folks that support the program to
• 20:09
  say, we made a big investment.
• 20:10
  We've got a great leader, we've got a great guy that knows how to win.
• 20:14
  Give him the opportunity to go and build the right program.
• 20:16
  And I'll give Lombardi credit too.
• 20:17
  It takes time.
• 20:19
  To build a program.
• 20:20
  It takes time to build success.
• 20:21
  And I hope, I hope we're well north of 36 months, but I would say like
• 20:24
  the 36 month mark, that'll be sort of a check-in for a lot of folks.
• 20:28
  For everybody.
• 20:28
  Are we on the right, everybody?
• 20:29
  Yeah.
• 20:29
  Are we on the right trajectory?
• 20:31
  Are we not?
• 20:31
  So, yeah.
• 20:32
  Well, we appreciate you, you spending time with us.
• 20:34
  Uh, very insightful and wishing you guys good rest of the year
• 20:38
  and, and heading into 26th.
• 20:39
  Momentum.
• 20:39
  I like your outlook and positivity on where the industrial market is going.
• 20:43
  We see it the same way.
• 20:44
  Yeah.
• 20:44
  That's great.
• 20:44
  Thanks so much guys.
• 20:45
  Yeah.
• 20:45
  Thank you.
• 20:45
  Appreciate it.
• 20:46
  Appreciate it.
• 20:46
  Yeah.