Industrial LMC – Discussion Highlights

2024

  • June 2024 Discussion: Chips Act and its economic impact on the industrial market. Discussion on Lending (debt) currently.
  • May 2024 Discussion: Workforce solutions and Cold Storage Solutions in Industrial Market.
  • March 2024 Workforce Issues | Discussion on Kirk Watson’s proposed Infrastructure Academy and partnering with Workforce Solutions to help grow local skill trade employees. Sylnovia Holt-Rabb, Director of COA EDD, was our guest speaker. Discussion on ISD and charter school programs available to help younger citizens identify workforce opportunities.
  • February 2024 CTX Economic Development Opportunities and Potential Issues | Dave Porter and Charisse Bodisch were our guests in February. Discussion on economic growth in Travis and Williamson COunty. Types of clients coming to town to serve the big 3 (Samsung, Apple, Tesla). Issues that could hinder local growth were discussed and workforce manpower was a key issue to be discussed further.
  • January 2024 2024 Planning for Topics and Potential Guests

2023

  • October 2023 Guest Speaker: Cameron Goodman, Economic Development Director, City of Georgetown. Relationship with Korea is solidifying (has openend an office Min Korea) and providing a big boost to area. Has new sources of water supply and seeking cos. in semiconductor, electronics, solar and EV battery industries. Industrial users are looking for housing support for employees. Area is seeking a data center development as well as medical office in Wolf Lake.
  • September 2023 Topic: Alternative Energy Systems / Guest Speaker: Jon Schwartz, Burns & McDonnell. Steam systems very efficient and are often powered by gas and other hydro-carbon liquids; using solar involves trade-offs;
  • May 2023 Tenant Fitup Work of Non-Office Space in Industrial Buildings
    • Age of the project also affects nature and extent of tenant finish.
    • Materials procurement and long lead items with supply chain issues are sometimes difficult problems, although time to perform by suppliers/vendors is shrinking.
    • Facilities with truck level loading docks and high ceilings are favored.
    • Specialty facilities (e.g. semiconductor and pharma facilities, among others) require even more treatment and coordination (e.g.: 50-52 week lead times on dock levelers and recessed panels
  • April 2023 Environmental Issues in Developing Industrial Projects with Roger Willis
    • Environmental issues with development of a green field project and as well as second generation projects.
    • Dealing with wetlands (look at early since approval times are lengthy), endangered species, asbestos and lead based paint, petroleum storage tanks and cultural resources.
    • Timing on approvals by Corp of Engineers depends on content of application: seeking jurisdictional determination (no limit); other: 45 days for completeness of application followed by up to 90 days to obtain permit issuance. Texas risk reduction system relating to USTs has two levels of cleanup requirements: residential (cleanest) and industrial.
    • Also discussed Clean Water Act and Waters of the US issues and some indoor environmental concerns (airtight buildings).
  • March 2023 Engineers Role in new industrial project development, Engineering will do prelim., Investigations (e.g.: LOMR/CLOMAR) and consulting, meeting with regulating gov. (e.g.: City), grading plan (most challenging), Jason Garza reviewed permitting process at City of Austin.
  • February 2023 Financing Terms/Changed Environment with Raymond Jenkins, SVP Frost Bank. Discussed current financing issues: rates, terms, recourse, guaranties, burn-offs. Jessica Inacio setting up Amazon tour/visit.
    • Strongest economy in the nation; vacancy below historical average; 4.1% vacancy, 10% increase since last year, build to suit most popular, 10.4 million SF of available space/inventory, Frost bank does mostly build to suit lending (not a lot of Spec),
    • There needs to be a guarantee or repayment plan for spec build loans and a sponsor with significant liquidity
    • Debt service coverage ratio 65% leverage; loan to cost, depends on debt service coverage ratio; up to 75%
    • Construction lending; riskier types of lending
    • 5-year loan; first 24–36-month interest-only payments
    • 3-pronged approach, MF and industrial are the healthiest (MF: small pause now, Industrial: our leading market), Owner occupied projects get best rates
  • January 2023 Organization

2022

  • December 2022 ECS LIMITED sponsoring Industrial LMC holiday event at Easy Tiger on East 7th St.
  • November 2022 Amy Madison, Pflugerville on state of the market
    • North and South of Austin are different. If local eco dev has built and entitled land, that community is ahead of the game. If project is large one, Site Selectors’ Guild is key. Have to pay attention to what developer is doing and what the users need. Supply chain issues remain; building heights are going up (especially EV auto; slab sizes (thickness) increasing; workforce skills and availability sometimes difficult.
  • October 2022 Current and Anticipated Prospects, Things affecting demand: e-commerce, re-shoring and chg in inventory philosophy: from “just in time” to “just enough.”
  • September 2022 Growth in Great Austin Area, Spec deals as well as user driven deals are large; most outside of Austin city limits; demand seems to be holding up but concerns exist as to how long; rates are pretty aggressive ($10-$20 for small premises; $7-$10 for very large premises; some phasing exists; the “flex space” becoming more popular; ~50/50 split: mfg. & logistics; high demand for cold storage.
  • August 2022 The Location Decision, For Spec Building: location, cost of land, labor costs in the area and transportation availability.
  • June 2022 Capital for Industrial Project, Trad.: commercial banks 3-5 yr construction; insur. cos. perm.; High net worth LPs – yield maintenance an issue; Rents and cap rates rising; oversupply is the biggest killer for industrial; normal cap stack: equity 10%-30%; loan 90%-70%
  • May 2022 Zydeco
  • March 2022 Discussion about mission statement, goals, and potential topics
  • February 2022 Kickoff Meeting