Interesting new industrial tenant we started working with to lease space from us. Business model is a new twist on the 3PL model, this time for corporate clients. 👇
They are basically the WeWork of industrial space. They lease (or buy) 20-200k square foot warehouses all over the city and set them up with racks and digital inventory management systems. They operate a full fleet of trucks and do all of their own stock movement.
Their customers are mostly manufacturers or large distributors who need to store a massive amount of product and to be able to pull it into their sites within a few hours notice.
The digital inventory system integrates directly the client, which gives the them the ability to automatically trigger an order for a pallet of item X to be delivered to location Y when it gets low. No human interaction needed to create a work order.
All of the locations except for HQ are un-manned warehouses, no offices or on site staff, just video surveillance and a trucking crew who shows up to move product in our out.
The locations are strategically spread out throughout the city and often close to the clients they serve.
Fascinated by this business model, and the opportunity these guys saw to create a massive revenue stream by serving an obscure need. They are growing like a rocketship right now and I expect could become a bohemeouth in the next decade.
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14 Undisputable rules for building a strong fundraising pipeline
After 20 years and more than $200M raised for real estate investments around the 🌎 I created a simple set of rules that we use to raise money. These aren't hacks or cheat codes, just the right way to do things.
Before we start, I need to address the 🐘: Not all GPs have the same starting line for raising 💸. Some have connections that help them go big out of the gate. Over time, however, track records win out, and a GP will have access to the capital flow they deserve.
1 Operate with integrity - A GP has many opportunities to hide little facts or make things sound better than they really are. Don’t go down that dark road, even if it makes life easier in the short term. ALWAYS operate with integrity down to the penny in everything you do.
I like to keep around a list of things that I don't need more of, but often spend time chasing for one reason or another. 1.Small deals 2.Followers on Twitter 3. More investors for Harbor Capital.
I find myself chasing the items on this list because bring those lovely little dopamine hits when in reality we don't need more of them.
The theory of constraints is a great way to run a business, focus energy on the bottlenecks that are slowing you down.
I often think about how to structure our real estate buys so that we can own them for the proverbial forever. 👇
When we sit down to set goals for the future none of them include rolling around in a bunch of cash on a mattress, but they all include owning billions worth of great cash flow generating real estate. 👇
I’ve been contemplating the best debt structures to use in order to achieve that goal. 👇
Posted a while back about our hiring funnel. -> Website says we aren’t hiring but for the right person we might consider it. 500 word essay to explain why we should talk to you.
Over 100 essays so far, most are trashed immediately as they just aren’t interesting. 3 have been very good and got to round two.
Round two is a model with one question. “What’s wrong with this model”. Most don’t respond.
Thinking about investing in real estate and don’t know what kind of property to buy? Take a look at industrial assets in growing cities. Here is a 🧵about one deal I own that is like an ATM machine. 👇
Many industrial properties are trading for far below replacement cost and yet offer functionally the same value to tenants as a new building would which means you can earn great returns if you buy smart.
Industrial vacancies are shrinking in most markets with population growth and yet most investors ignore the space which means opportunities still exist for great buys.
Serious question here for real estate GPs and LPs: Should long term hold GPs stop modeling out 10+ years and just focus instead on the quality of the asset and the Un-levered yield on cost?
I had a conversation with @moseskagan several months back in Austin and he told me that they model the first year only and it’s stuck with me. Honestly I thought he was crazy at first, but I think he might be on to something.
We all know that the likelihood that your model is correct is near zero. And the further out it goes the less accurate it gets.