Sound Bites from NAIOP’s I.CON: The Industrial Conference in Long Beach, California, and O.CON: The Office Conference in Houston, both held in June 2015.
“There is a shift from global manufacturing to regional manufacturing in the NAFTA countries. Energy is part of it, but it’s not the only driver.” Luis Gutierrez, president, Prologis Latin America
“Industrial real estate is still a big-box world, but we are seeing a trend toward growing manufacturing investment.” Erik Foster, principal and practice leader, industrial capital markets, Avison Young
“Right now, the amount of money chasing deals is high, but if interest rates start going up, what happens to alternative investments? That is one of the big fears that we all have. At the moment, things seem to be hitting on all cylinders,” Carl Panattoni, chairman, Panattoni Development Co.
“Supply getting ahead of demand is our biggest fear.” Gene Reilly, CEO for the Americas, Prologis
“People are obsessed with Fortune 500 companies, but there are a lot of companies making a lot of money, and in infill [industrial development], you can take advantage of those options,” Bo Farkus, senior vice president, Sitex Group
Speaking about capital discipline: “There’s plenty of opportunity out there right now. … But we all have to be careful. … There are going to be assets purchased in this market that will not be seen again for a generation. The question that sometimes comes up when you’re competing in those spaces [deals for trophy assets] … is, will that potentially lead to people taking more risk to have access to those assets?” Collete English Dixon, principal, transactions, Prudential Real Estate Investors
“Real estate reacts more to the availability of capital than to the cost of capital.” Sean Bannon, managing director and head of U.S. real estate, Zurich Alternative Asset Management LLC
“There is lots of opportunity [for office investment] created by where the big capital wants to be.” Al Pontius, national director, commercial property groups, Marcus & Millichap
“Companies are looking for flexible, cool space. I don’t know when the last time was that I built a conventional space with just offices lining the windows. Now it’s a lot of open space. … Creating a cool place doesn’t have to be super expensive. Color goes a long way. Utilizing open space goes a long way.” Mark Hansen, senior vice president, value-added investments, Prologis
“The next generation of office workers is asking: Where’s your bike room? Do you have showers?” Meade Boutwell, senior vice president, CBRE
“The amount of office construction underway today is below the long-term average and significantly below past peaks. … By an historical standard, the market would appear ripe for additional new development today.” Carleton Riser, president, Transwestern Development Co.