One of the most recession-resistant asset classes is warehouse investment, and today we sit with industry expert Scott Krone to find out why. With a Master’s of Architecture from Illinois Institute of Technology, Scott is the Founder of Coda Management Group; a company that specializes in creating and seeking existing warehouse investment opportunities. We open the show by hearing more from Scott about Coda and what they do in the real estate space. Scott then talks about warehouses as an asset class and draws relatable comparisons to multi-family. He notes why warehouse investment is a simplified version of multifamily, and how they’re typically favorable toward NNN leases. Looking at present times, we ask Scott to tell us about how his warehouses have performed during the coronavirus pandemic. Listeners will delight in some of the ways this asset class has soared, as Scott uses examples of basketball and indoor golf. Following this, Scott gets into the nitty-gritty things and explains how he evaluates markets for warehouse opportunities, the strengths of warehouse opportunities, and who he works with to find inventory. To conclude the show, we ask Scott about his biggest business blunders and what his most useful industry tool is. Be sure to join us today!
Key Points From This Episode:
- Introducing today’s guest Scott Krone.
- We hear a little bit about Scott’s background.
- Scott tells us about what he currently does with Coda.
- Hear about warehouses as an asset class.
- What makes warehouse leasing so similar to multi-family.
- How the warehouse space has coped with the coronavirus pandemic.
- Driving factors that make investing in the warehouse space interesting for Scott.
- How Scott evaluates markets for warehouse opportunities.
- Who Scott works with to find inventory.
- Scott lists his top three strengths for warehouse investing.
- The cautions that come with warehouse investment.
- What a typical investment plan looks like for Scott’s warehouses.
- Find out how Scott chooses his tenants and what the perfect lease plan is.
- One tool Scott uses in real estate investing he cannot do without.
- Scott’s biggest business mistake.
“Our main portfolio of investments right now is actively pursuing self-storage opportunities — either creating them or looking for existing opportunities.” — Scott Krone [0:02:03]
“If you’re doing a triple net lease, then it’s just straight income to you and your tenant takes care of the rest. So within our flex warehouse space, we have modified gross and triple net leases. It’s much easier for us to manage compared to multi-family.” — Scott Krone [0:03:27]
“Warehouses are much more predictable. We could look at demographics, saturations, market rates — it’s a lot more analytical than comparatively to multi-family.” — Scott Krone [0:02:05]
“We’re not going in paying top dollar, we’re coming in and making sure that we have a competitive advantage once we do buy. We truly believe that you make your money on the buy, not on the sell.” — Scott Krone [0:09:01]
Links Mentioned in Today’s Episode: