investment attributes
Location
Building Configuration
Building Configuration
- Top 50 MSA
- Concentration in Texas, Southwest, Mountain West, and Midwest; opportunity for barbell strategies
- Dense, infill industrial submarkets with proximity to rooftops
- Strong vehicular access to major thoroughfares, highlighting the paths of growth
Building Configuration
Building Configuration
Building Configuration
- 2,000-25,000 SF average unit size
- 14'+ clear height
- 60' to 160' bay depth
- 10-30% office finish
- 1:7,500 SF minimum loading ratio
- 1.0:1,000 SF minimum parking ratio
- Multiple points of ingress and egress
Tenant Profile
Building Configuration
Tenant Profile
- Users focused on serving the local economy through last mile distribution, contractor services, and home furnishings
- Utilization of box trucks, sprinter vans, and fleet vehicles
- Local/Regional credit; risk offset by diversified rent roll
- Avoid noisy, non-strategic, or disruptive users (auto, fitness, etc.)
Operations
Value Add Opportunities
Tenant Profile
- Turnkey "make-ready" suites designed to reduce TI costs and facilitate faster leasing
- NNN leases eliminate expense leakage
- 3-5 year lease terms allow for frequent mark to market adjustments
- Critical communication and decisiveness to respond to current or future tenant needs
Value Add Opportunities
Value Add Opportunities
Value Add Opportunities
- Demise buildings to increase rent and meet deepest section of tenant demand curve
- Reduce office finish to minimize turnover cost, cater to light industrial users, and protect an industrial (non-flex) valuation at exit
- Enhanced oversight and construction management by Hornet drives occupancy and lease rates
Strengths
Value Add Opportunities
Value Add Opportunities
- Scarcity premium with minimal supply and continuously high barriers to entry
- Deep, diversified rent rolls generate smooth NOI and reduce singular tenant exposure
- 3-5% annual rent escalations, ensuring revenue maintains pace with inflation
- Cap rate compression driven by portfolio exits and further institutionalization of the sector