Why Recommend Multi-Tenant Flex Industrial Parks?

As a registered investment advisor, you are in tune with both the stock market and your client’s financial needs. But, with warnings that we may be experiencing a stock market correction,(1) your clients want investment alternatives to diversify their portfolios.

Investing in stabilized, multi-tenant flex industrial real estate can offer a viable alternative. Industrial properties that provide in-place cash flow for investor distributions can be an especially attractive alternative asset class. And, while it doesn’t have the sex appeal of a hot tech stock that can turn investors into overnight millionaires, investor interest in industrial properties is higher than ever, as institutional capital views industrial property as a lucrative investment opportunity. Investment sales were up 34.7 percent last year and there is a resurgence in industrial real estate portfolios.(2)

Why Multi-Tenant Flex Industrial Real Estate

As its asset type indicates, multi-tenant flex industrial real estate is flexible. It varies in shapes and sizes and thus can accommodate different tenant needs. Multi-tenant flex industrial business parks can have both office and warehouse components. The space can be used as distribution facilities, retail headquarters, warehouses, offices, manufacturing facilities and more. And the tech trend toward creating open, collaborative office environments to attract and retain top talent has turned many of these companies to industrial business parks to create their workplace utopia. This flexibility accommodates various types of tenants from a number of industries, allowing for more options when leasing up these buildings.

The explosive growth of e-commerce has dramatically influenced the multi-tenant flex industrial real estate market. (3) The focus of sellers to speed supply chain fulfillment has been a driving force in the increasing demand for warehouse and distribution space, and multi-tenant flex industrial parks have been the beneficiary of this trend.

While some of these trends are driving demand for multi-tenant flex industrial space, industrial real estate is actually shrinking. (4) Limited new industrial construction in urban and suburban areas coupled with many former industrial areas being rezoned, can make multi-tenant flex industrial real estate more valuable from an investor’s supply and demand perspective.

What You Should Look for In Industrial Real Estate

Not all industrial properties are good investments. So, when looking for industrial real estate investment opportunities for your clients, your due diligence may want to include the following questions:

  • Is it a stabilized property located in a growing metropolitan market?
  • Is the strategy focused on providing investors potential distributions through in-place cash flows on a regular basis?
  • What is the potential for long-term capital gains?
  • Is the property’s tenant base diversified?
  • What is the property’s occupancy rate?
  • Is there one large tenant that occupies a quarter or more of the property?
  • Was the property purchased below replacement cost?
  • What is the sponsor’s track record of acquiring industrial real estate that provides monthly distributions and cash flow?
  • What is the strength of the submarket in which the property is located?
  • What is the build out of the property compared to current market demands?

Why Avistone

Avistone is a commercial real estate investment firm with a successful track record of providing regular monthly distributions to investors of our multi-tenant flex industrial properties. Our investment strategy is to purchase stabilized, multi-tenant flex industrial business parks with high occupancy rates in dynamic metropolitan markets. Further, we look for a diversified tenant base with no individual tenant occupying more than 20% of the space. This strategy boosts the risk return profile for our investors. Our offerings provide the ability for your savvy, high wealth clients to diversify their investment portfolios with the potential for risk-adjusted returns.

More than 45% of our investors have invested in more than one of our offerings. In addition, Avistone principals place their confidence and their own money in each of our offerings. Avistone’s current portfolio of 19 properties includes more than 2.5 million square feet of stabilized flex industrial space located in California, Texas, Georgia, Florida and Ohio.

Sources

1) https://www.marketwatch.com/story/heres-the-hidden-stock-market-risk-investors-need-to-watch-out-for-2018-05-22
2) https://www.us.jll.com/united-states/en-us/news/4871/industrial-real-estate-trends-2018
3) https://www.cbre.us/research-and-reports/US-MarketFlash-Room-for-Growth-Industrial-Real-Estate-Cycling-Up
4) https://americas.uli.org/wp-content/uploads/sites/125/ULI-Documents/ET_US-2018_ONLINE_covertext_v8.pdf

Disclaimers

5) The DISCLAIMERS AND LIMITATIONS: This message is intended solely for Investment Advisors. It is not intended as an offer to sell, or the solicitation of an offer to buy any securities or ownership interest. Such offers can be made only by the confidential Private Placement Memorandum (PPM). Investors are encouraged to read the entire PPM paying special attention to the risk section prior investing. Investments in private securities contain a high degree of risk and often have long hold periods. They are illiquid and may result in the loss of principal. Avistone’s strategy may not occur due to numerous external influencers. 6) Commercial real estate is subject to risks inherent to the acquisition, management and ownership of real property, including environmental concerns, changes in economic conditions, changes in the investment climate for real estate investments, new competition, changes in the demand from competing properties, changes in local market conditions, changes in lease-up periods, changes in real estate tax rates and other operating expenses. 7) This communication includes forward-looking statements that involve risks and uncertainties. These statements are only predictions and are not guarantees. Actual events and results of operations could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “expect,” “could,” “intend,” “anticipate,” “plan,” “estimate,” “believe,” “potential,” or the negative of such terms or other comparable terminology. The forward-looking statements included herein are based upon Avistone’s current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Although Avistone believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the property’s actual results may differ significantly from the results discussed in the forward-looking statements. 8) Past performance may not be indicative of future results; there is no assurance that objectives will be met. 9) Diversification does not guarantee profits or protect against loss. 10) Securities offered through WealthForge Securities, LLC. Member FINRA/SIPC. WealthForge and Avistone are not affiliated. 11) IMPORTANT NOTICE: The accompanying email transmission is a privileged and confidential communication and is intended to be viewed and read only by the intended recipient. If you are not the intended recipient or its authorized agent, you are prohibited from reading this transmission, and the dissemination, distribution, or copying of this transmission to or by person[s] other than the intended recipient is prohibited. If you have received this communication in error, please notify us immediately by telephone and destroy the original transmission.