The FORT Podcast: Chris Powers – Rant on Fundamentals That Drive Class B Industrial

On this episode Chris talks about the fundamentals that drive Class B Industrial:

  • Growing demand and no new supply?  Could that be?!
  • The types of tenants that occupy Class B Industrial
  • How we think about Cap Ex & TI.
  • And more!

Listen on:
Apple Podcasts


(2:52) – What is Class B Industrial?

(4:59) – They aren’t building more of this stuff

(7:07) – Serving the function of a business

(9:43) – The asset class in 2022

(11:57) – Tenants in Class B Industrial

(14:05) – Being close to the customer

(15:33) – Predictability of Expenses

(16:31) – Class B as Covered Land Plays

(17:22) – Leasing

(19:58) – Final thoughts on Class B Industrial


Episode Summary

In an enlightening episode of the Fort podcast, host Chris Powers embarked on an in-depth exploration of the Class B Industrial real estate sector. Chris, esteemed for his profound insights into the intricacies of real estate, delved into the nuances of Class B Industrial properties, shedding light on their unparalleled value in today’s dynamic market landscape.

The conversation initiated with Chris elucidating the distinguishing factors between Class A and Class B Industrial buildings. While Class A buildings often cater to significant e-commerce and manufacturing giants, Class B properties serve a distinct, yet equally vital segment. Chris emphasized the appeal of these properties, highlighting their strategic locations and the critical role they play in the urban fabric.

A pivotal facet of the discussion was the diverse array of tenants that these properties attract. Ranging from auto movers to cheerleading and batting cages, Class B Industrial buildings have demonstrated remarkable adaptability, accommodating a myriad of businesses. In an era marked by the meteoric rise of e-commerce, these properties have shown resilience, evolving to accommodate the burgeoning needs of digital businesses.

Furthermore, Chris underscored the predictability associated with tenant requirements in Class B spaces. The straightforward nature of lease negotiations in these properties, juxtaposed with the more complex demands in office and retail spaces, offers landlords a streamlined, efficient process. The reduced tenant improvement (TI) demands further bolster the appeal of these properties, making them an enticing proposition for real estate aficionados.

Diving deeper into the mechanics of leasing, the episode illuminated the benefits of shorter lease terms prevalent in Class B Industrial properties. The agility afforded by these shorter terms enables landlords to frequently reassess market conditions, granting them unparalleled flexibility. Chris elaborated on the weighted average lease term (WALT), a pivotal metric in this domain. A shorter WALT not only signifies frequent lease renegotiations but also provides opportunities to recalibrate rental rates in tandem with prevailing market dynamics.

Chris’s reflections on the leasing process were particularly insightful. He posited that the expedited leasing process for Class B spaces, characterized by its simplicity, leads to significant savings in terms of time and associated legal costs. This efficiency, he suggested, is a testament to the streamlined nature of Class B Industrial properties and their aligned market positioning.

Concluding the episode, Chris reiterated the compelling investment thesis surrounding Class B Industrial properties. Amidst a backdrop of fluctuating real estate dynamics, these properties have emerged as beacons of stability and promise. Their strategic locations, coupled with their adaptability and efficiency, render them indispensable in the contemporary real estate milieu.

In essence, this episode of the Fort podcast provided listeners with a panoramic view of the Class B Industrial real estate sector. Chris Powers’s expert reflections, grounded in years of industry experience, equipped listeners with invaluable insights, enabling them to navigate the complex terrain of real estate with confidence and clarity. For those poised at the intersection of real estate enthusiasm and investment acumen, this episode emerges as an indispensable resource.


The Fort is produced by Johnny Podcasts

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