NKF’s Geoffrey Kasselman Says, Move with the Market – or Get Left Behind

NKF’s Geoffrey Kasselman is slated to speak at Connect Industrial July 11th in Chicago. Leading up to the conference, Connect Media asked him to share what he sees happening in the industrial sector. Check out his responses in our latest 3 CRE Q&A.

Q: What are the primary trends driving the industrial industry today?
A: Consumer confidence and thus consumer demand, which are changing the supply chain, reinventing retail, and giving rise to e-commerce, are primary drivers in today’s industrial market. Likewise, food production and distribution are staples of industrial activity, as most people consume three meals per day in good times and bad times. Other drivers include the relatively low cost of capital (notwithstanding the recent and planned increases); recent U.S. tax law changes; disruptive technologies; and the commercialization of cannabis.

Q: How are companies addressing the challenges and capturing opportunities?
A: In any variety of ways. The most obvious example is Amazon, who is in the midst of securing multiple warehouses and distribution centers in most major metro markets worldwide, while also disrupting the grocery industry with their Whole Foods purchase and their pricing power. They’ve also established key partnerships with Kohl’s to support in-person returns of online purchases. Several of my own clients are realigning, upgrading or expanding their supply chain networks, in order to better compete and take advantage of these online and brick-n-mortar opportunities. This means new facilities of different sizes in different locations, and they are hardly alone.

Q: What are some examples of deals that reflect what is going in the marketplace? And what advice do you have for companies today?
A: The deals are everywhere; it is why the overall market is so active. This is a local, regional, national – even international – phenomenon. Just look outside your window, or scan the news. Demand is through the roof.

My advice for companies today is to: 1) get comfortable with change, it is only accelerating; 2) reassess everything – including budgeting and ROI dynamics – if you are using yesterday’s best practices to thrive tomorrow, you are likely to miss the mark while losing critical ground to competitors and upstarts; and, 3) the market is no longer moving linearly on atomic clock time. It is moving exponentially at the speed of the internet, thus it is crucial that you establish innovative new partnerships and seek the appropriate expertise so you can move with the market – or be left behind.

For comments, questions or concerns, please contact Dennis Kaiser