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Are We in a Perfect Industrial Market Equilibrium? · Industrial Advisors

• 0:00
  We had such a dynamic boom during the COVID years and leading
• 0:05
  up to it that, that, that this feels like a really slow market.
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  Right.
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  Yeah.
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  Nationally speaking, we're back to normal.
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  Welcome to our industrial advisors podcast, Bill Condon and Matt McGregor.
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  We have a five minute Friday today.
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  Talking about, are we at an equilibrium from a market standpoint?
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  And what we mean by that is, are we in a, in a market where it's not
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  really a landlord's market, it's not really a tenant's market, but it's
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  kind of in the middle there, right?
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  So let's talk about that.
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  Where do you think we are from a market standpoint?
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  Well, nationally speaking, you would say that we're, we're at an equilibrium
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  where it's in between the two, it's a kind of a, in theory, a perfect market.
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  A lot of people would go, what do you mean a perfect market?
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  It's national vacancy rate is up to 6.
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  7%, but if you look at it from a 15 year average, it's right at the average of 6.
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  2.
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  So it's slightly above the average, but we had such a dynamic boom.
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  During the COVID years and leading up to it, that, that this feels
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  like a really slow market, right?
• 1:25
  Yeah.
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  Nationally speaking, we're back to normal.
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  Yeah.
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  And I feel like we're in a really, you know, you bring it to the, kind
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  of the local market, to your point of nationally, we're right there, right
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  around the 15 year average, right.
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  Which is a good place to be, you know, locally, I feel like there's
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  a good amount of deals that are out there in the marketplace.
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  But there's certain segments of the market where landlords are
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  getting super aggressive, right?
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  And saying, Hey, I'm going to go get this deal.
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  And then there's other situations where depending on the size, you know, the
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  tenants are still having to be aggressive and trying to go secure a space.
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  So it depends on the size depends.
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  And, but it feels like we're at a really good place in the market for both.
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  Tenants and landlords.
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  For Seattle, I would agree.
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  And to your point, it depends on size range.
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  Yeah.
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  Uh, if you looked at the vacancy overall, you'd say it's
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  leaning toward a tenants market.
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  Yeah.
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  But there certainly are size ranges that are sub three percent.
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  Yeah.
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  Right.
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  And then we've talked about ad nauseum, the one, 200, 000, no
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  question it's a tenants market.
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  Right.
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  Right.
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  So I would say, It's through nationally and locally.
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  It's slowing down of the vacancy ticking up from that COVID era and
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  developers that had to still put the product on because they were underway.
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  They have their construction loans.
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  They had to go.
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  It is now tightening up.
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  So what you saw in an increase is.
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  That demand drop off while supply had to continue because developers were
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  already roaring and going and committed.
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  Yeah.
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  Now they're pulling back.
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  So you're going to see that tighten up and stabilize and find a new equilibrium.
• 2:53
  Yeah.
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  I mean, it's, you know, when I look at it and we're talking numbers here,
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  you know, six and a half percent vacant seems like a really good
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  safe place to be for both sides.
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  You start getting five and under.
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  You start becoming more, you know, it's more of a landlord's market.
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  You start inching up towards 8, 9, 10 percent, the tenants
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  are carrying the weight there.
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  That's right.
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  I think we'll slow down, you know, I hate this term, but you know, you
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  cold call and you get the people, we're waiting till after the election.
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  Yeah.
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  Right.
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  I mean, you get that.
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  It's not this election.
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  It's every presidential election.
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  Right.
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  You get that with four or five months, you know, No matter what side of the
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  fence you're on, you get that cut.
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  And so I think the rest of this year is going to just be what it is a little
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  bit slow in that, because you do have this pent up anxiety on both sides.
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  So I don't think we'll have a ton of different movement until after then.
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  So my guess is our vacancy, both nationally as well as locally.
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  We'll tick up a little bit and, and, but, but not a huge change
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  between now and the end of the year.
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  Yeah.
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  So there we are.
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  We have a really interesting, good market, healthy market that we're in right now.
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  And, uh, we'll see how it closes out in the second half of the year.
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  Happy Friday.
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  Happy Friday.