- A look into Chad Griffiths
- What drew Chad towards commercial real estate?
- Differences of Industrial and Retail
- Population growth as a factor
- Markets’ development and growth
- LinkedIn:linkedin.com/in/chadgriffiths
- YouTube: youtube.com/chadgriffithscre
- Contact Number: 843-619-3005
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
- Email @: corwyn@corwynmelette.com
Trends and Markets of the Industrial and Commercial Real Estate Business with Chad Griffiths
Transcription
CORWYN:
So good morning. Good morning and Good morning guys. Welcome to another fabulous episode of Exit Strategies Radio Show. I’m your host Corwyn J Melette, broker and owner of the Exit Realty Lowcountry Group in beautiful North Charleston, South Carolina. So guys, if this is your first time listening to this show you Sir or Ma’am are in for an amazing treat. Because our mission here at Exit Strategies Radio Show is very simple. That is to empower our community through financial literacy, and real estate education guys, we’re legacy-building, that is what we do. So I want to give a major shout-out, huge shout-out to you that have been along this road with us for all this time, and we are super excited. We’ve been bringing to you, introducing, forming, educating, and inspiring so many of you to do major things and to envision a much larger and brighter future for just not you. But for your family. We talk about generations that have yet to come. And you guys have been out there in the streets working on I’ve been engaged by so many of you in random places that say, Hey, I listened to your show. Keep going. So I’m inspired and motivated by you. And we’ve been reaching out and we’ve been bringing you the best guests guys, we’ve been doing it. The reason is that we want you to see much bigger than what is just immediately around you. And today is no different. We’re super-duper excited guys to take this real estate conversation to another level. We have with us none other than Chad Griffiths with NAI Commercial Real Estate. Chad, how are you doing today?
CHAD:
I’m doing so well. And I’m very excited to be on the show.
CORWYN:
Well, thank you so much. Thank you for taking time out of your busy schedule. Now. I’m gonna give a snippet, but I’m gonna let you expand on it. You’re in the commercial and industrial real estate sector, you get a vision and have a vision for what yet is to call. You see the landscape before we even see the ground break. So Chad, tell our listeners, what it is that you do, and how you impact the real estate community.
CHAD:
Yeah, that’s a really good way of teeing it up. So I like to look at myself as a broker, not a whole lot different than the residential side where you’re matching buyers and sellers. Quite often we’re matching developers with a parcel of land, or we’re matching a company with the property developer before like you mentioned, a project even gets developed or even conceived, quite often, there’ll be a company that needs to have a space, they might need a 500,000 square foot distribution center. And they’ve identified a specific area where they want to be but there’s no product. So we’ve got a pair of that company with a developer or property owner, to get them interested in developing something so that they have a place to work out of. So it runs the full gamut. We can work from the development side, helping developers pair up with companies or sometimes it can just be a building that’s already existing, and the landlord wants to find a tenant for it. And we try to match them up as well. So it might sound a whole lot more complex but at the very root of it. We’re professional matchmakers. We’re trying to put two parties together in the interest of getting a deal done.
CORWYN:
I just heard– you may remember the show, I just heard the matchmaking show. I just heard the music in my ear when you said that you’re professional, you’re a professional matchmaker. So, today’s show is for our listeners, guys. This is for you. When you draw past that vacant lot and said, It would be nice if there was this here. Chad is the guy that he takes that vision and puts everybody together to make it a reality. He’s the guy that is essentially responsible for, if you will when you draw past a vacant lot you come back tomorrow and there’s a shopping center there. what have you? So Chad if you don’t mind, what drew you to this? What drew you to the commercial and or industrial side of the real estate industry?
CHAD:
Yeah, I’ve been doing it for a long time. And when I reflect on it, it’s 18 years now that I’ve been in this business, and it was almost accidental. So I started originally in residential real estate in 2004. And I bought and sold a few houses before that and had the itch to do real estate. And I did residential for a year. And I just didn’t see myself wanting to do that for a whole career. So I started exploring commercial real estate in 2000, and late 2004, and found a brokerage that just so happened to be focused mostly on industrial. So I ended up joining that company in 2005. And still there actually to this day, so 18 years later, which is crazy to think about that 2005 was 18 years ago. But yeah, just kind of stumbled into industrial. And I didn’t know a whole lot about it. But it’s been a blessing because I feel I’ve had a very rewarding and happy career as a result of it.
CORWYN:
So I do have a question. And we’ll kind of hit you about trends here shortly. But for context, we think about, I think about, let’s put it that way, I think about industrial real estate, as the place where the people that live in the houses go to work, I think about the commercial real estate, if you will, the retail spaces, let’s say that because this is kind of a hodgepodge in there if you will, but that’s the place where they go to spend their money. And then you have the other sector, which is where people live, where they stay. Now, you can, if you don’t mind sharing with our listeners, kind of how because we always talk about real estate statistics, the trends in residential. We don’t talk about the trends in commercial and industrial. So give us some insight into that because that means if industrial real estate is increasing, that means there are more places for people to go work. If the commercial is growing, there’s no place for people to go spend money. So how does that translate? So give us some information or give some perspective on that chat.
CORWYN:
I love how you explain that on industries, where people go to work, you’re 100% right. The office is also for that as well. You can have the white-collar jobs go to an office and perhaps more the blue-collar jobs go to industrial, I like to break industrial into three subcategories. I’ll just make it real quick. First, there are warehouse properties. And those are like the big Amazon facilities that we’ve all seen pop up everywhere. Where things are stored, the easiest way to put it, is things are stored there for some time, manufacturing would be another one. That’s where things are made. Like to use the Boeing factory just outside of Seattle, four million square foot building, the only thing that they do there is made airplanes, all the raw materials come in, get assembled, and an airplane gets spit out, that’s manufacturing where things are made. And then the other one would be flex. And that’s a catch-all for everything that could be any other type of use, but it’s usually going to be an industrial-zoned property. So the city will have designated that an industrial property, but it can be used for bottle depots, churches, office space, self-storage, art galleries, you name it, I’ve probably seen a use that goes into there. But overall, I completely agree with your idea and explanation of it. It’s where people go to work. So I’m gonna steal that off you. That simplifies it even more than I’ve simplified it in the past. I love it.
CORWYN:
Yeah, we get we give freely over here, Chad, we just–
CHAD:
You should trademark that. That’s fantastic.
CORWYN:
So you do see, overall, so let’s talk. I mean, you know, we’re gonna talk as a whole. So for our listeners, guys, we’re not specific to a particular place. Because we know the community that you’re in, when you drop when you leave home this morning, and we joke about this chat here. So I’m gonna share the joke with you but get straight into it. But I joke that when you turn that corner, there’s a vacant lot. You come back later and there’s a building framed up, you come back and come back the next day. And there are cars in the parking lot. And there are balloons outside because they got the grand open and see like it goes up like instantaneous. So what trends do you see? Do you see a rise if you will, across the country? In industrial real estate being traded?
CHAD:
Yes. And there. There’s a very close parallel between the two. They’re very well connected between industrial and retail. And I’m sure everybody tuned in is familiar with moving over to e-commerce. I know that I spend more money on e-commerce I think I did all my Christmas shopping last year entirely online. So there’s been a big transition toward e0commerce. It works out to about 20% right now of retail dollars spent 20% is online and 80% is traditional brick and mortar. And so like the actual physical retail stores, I see that trend continuing to develop. And every dollar that gets transferred from being a brick-and-mortar retail sale to being an online store requires more warehouse space. So that’s one of the main reasons we’ve seen so many distributions, space went up, whether you’re in South Carolina, whether you’re in California, whether you’re in Canada, there’s been a ton of warehouse space that’s gone up, and the vacancy rates are quite low. If you’re in some port markets, you can be sub 1% vacancy rate. Retail, I think is going to be interesting, I think a lot of people still enjoy that experience of going to a retail store, whether it’s to socialize or see people in person, as opposed to sitting in their basement and the pajama pants, I think that there still is an appetite for people to go in the store. So I think retail is going to be relatively flat, but industrial should continue to thrive.
CORWYN:
That is interesting. And the reason I’m gonna say that’s interesting is that we’ve all been what I say we all been, we’ve rolled that back: retailers, smaller retailers, the mom and pops all they’ve been concerned about, and that’s interesting, you point that out, they’ve been concerned about the big box about e-commerce taking over. And it’s interesting to hear you say that 80% is still brick and mortar that is still I’m gonna go shopping, I’m gonna go to the store, and I’m not going to let the UPS guy or FedEx guy bring it to me. So that’s interesting. And what that means for real estate. So what’s interesting, regardless, it has to go somewhere. So either the product has to be in a manufacturing facility because it’s got to be produced, which means there’s a need for real estate space for that. And, or it has to be in a warehouse because it’s gotta be a truck, everything’s got to go on the truck. Right? I mean now when they get them helicopters, right, they start dropping the packages at your house, that’s coming. So that’s going to change that. But everything has to go into a warehouse. So now, that’s the need in that in that sector of industry, all right, so you got manufacturing, you got industrial, well, somebody’s got to run the operation, which means they got to be an office, I granted people working from home, which means because everything needs real estate if you look at everything needs real estate if the person works from home, they work in from a residence, so any residential real estate, if they got to go into the office, you need an office space. And then for the other sector, another part of the market is still traditional brick and mortar, where you go in and look through the aisles, or what have you and pick out who does dress pretty? Ooh, I like their pants. So, man, them shoes look good, right there, you still got to have a space for that to happen as well. So there’s a need across the board. What’s interesting is that you’re still seeing that growth, which means that we’re consuming more, would you agree with that?
CHAD:
Absolutely. And one of the biggest drivers of the economy is population growth. As long as the population is growing, and it can be local, it can be nationwide, if we’re seeing population growth, that’s going to lead to all types of economic activity as you said, more shopping, it’s more retail, more manufacturing, more warehousing, more office space. Like I’d be bullish on any market that’s having population growth just as a result that it’s a key driver. And I’d be a little cautious of markets that are flat or seeing even perhaps the population decline. And Detroit has been a good example of that historically, just as they’ve is they peaked at the automotive manufacturing heights and then slowly started seeing a decline. That’s a tough market. And I don’t think that they’re even out of the woods yet, even though their population has crumbled. I think that that’s the main metric that I would look at for any type of real estate, if you want to see a marked increase in residential, commercial., office, or industrial look for population growth first.
CORWYN:
That’s interesting. So our listeners have been with us for a while. So I’m gonna say this to you, as I talk to Chad. We’ve had in our region, we have had a massive– Let me rephrase that… Over a long period, we’ve had a massive influx of people. Looking at it in smaller increments, it has been a consistent increase in assistant growth and our population, and along with that, we’ve had a consistent growth in real estate, in residential homes, and commercial development and industrial development. We have major manufacturers, all those things, and it follows the people. We oftentimes believe and think that the people follow the real estate, but real estate follows the people. When people are coming in, now you need more, and you got to develop more, and you got to grow more. So that’s interesting. So for all of our listeners, well, no matter where you are, you need to factor that in. That’s a very useful fact. And a point there, Chad, that when you see population growth, population increase, there is going to be an expansion of that real estate market. Boom, that’s a mic drop right there.
CHAD:
Some like Trump– And it sounds simple, but a lot of people skip that step. And they just say, Well, what does this? What are some of the conditions here? I heard something good about this market, I’m going to consider it. And that’s fine. Those are all important things you need to factor in. But step one for me would be and I look at a lot of different markets. Step one is, is their population growth like that– That forms the foundation for me to consider other factors. But that’s the first step.
CORWYN:
So you have worked on and been a part of a tremendous amount of development. And I mean, your resume, says that you have done over 500 transactions. Which markets are you seeing, the most growth? and if you can pinpoint the markets in which you’re seeing the most growth and development.
CHAD:
So the easy one is Texas. And just like some quick numbers, Dallas, led the nation last year in industrial development, just for quick stacks is staggering. They added 70 million square feet worth of industrial space. And that is a lot of space, and they let them lead the nation, the most developed of major cities was Dallas. So I like Texas, I think Texas is probably the market that I would be most interested in right now. And I still am actively looking for opportunities there for my portfolio. I also like Florida, for similar reasons, population growth, where are people moving to, they’re moving to Texas, they’re moving to Florida, they’re moving to Georgia, they’re moving to the Carolinas, that’s where the population is going. So I think everything along that east coast down to Florida and Texas, I think are outstanding opportunities. And then on the other hand, I look at a market like California, and I’d be concerned and be concerned if I had bought in that market or New York or Chicago, like some of these markets that have had high prices for so long. I’d be concerned in those markets because it seems a lot of people are moving out of there. And even if some people are moving back, that net migration is pretty flat at best. So those would be the markets that I’d be most concerned about. And I like the markets that have a population moving there for that whole reason. Follow the people, follow the people in real estate come after it exactly like you said. So Texas would be number one in Florida, and then up the east coast would be other markets that I’d look at as well.
CORWYN:
So that’s interesting. Did you say that Chad? So ‘ve talked about, a few months ago, I looked at the connections between markets, people migrate, but they don’t like to migrate. They don’t want the migration to be difficult. People don’t drive across the country like they used to, I’m not saying that people don’t do it. A lot of people can do it now for the thrill. On occasion. It is what is necessary. But people oftentimes they don’t do it. When they relocate. They’re looking for convenience. So we have a society now where people work more and more remotely. So when our market, for example, the Charleston market, we’re directly connected to San Diego, LA, San Francisco, I believe San Diego, San Francisco. We’re directly connected to Chicago, New York, and Louisiana. I think we might have a direct connection in Texas, but there’s a lot of markets, large markets that were directly connected to, and we’re seeing people get on these planes in California and come working come live in South Florida while they work in California. And that migration again brings like you said growth because now we need more houses. Now we need more commercial space because we need more stores. So we’re seeing the retail explosion, North Charleston for a large time has In the retail capital, if you will of South Carolina, and we get more and more stores. Now granted, other markets in our state are catching up now. But it’s impressive to me that that particular location, that particular arena area, has such a massive commercial development. The airport is in North Charleston. So it’s interesting that that municipality has such a density of development and commercial growth, in comparison to other states, and other markets throughout the state. So it does follow the people. And for our listeners, guys, you need to pay attention to this and to pay attention to what Chad is saying because this is going to tell you what you need to know. We sit and we get mad and upset. Now Chad look, you’re, you’re in a completely different area. And you watch people just kind of get,I don’t want to grow up with so many people, we don’t want to travel, we don’t want this, we don’t want that. And we reject and slow down the progress that’s needed to help facilitate effective growth. Because we need roads and stuff, right? Because you got to get trust, we got to the port in Charleston. So the boats they come in, they come in by land, by sea, and by air here. So you have to make sure that you have an infrastructure that supports all of that some locales, stuff? Oh, I’m sorry. Well, land Israel. So in some places, you can only get commerce in and out by land. And by air. middle of the country. Yeah. I mean, You may run in a boat. In Oklahoma, you know, from Asia, you ain’t doing that. But you can do that from in South Carolina, you can run a boat, boat to South Carolina, you can run a train, car truck, you can fly a plane here, you can get all those things here. And that’s kind of what we’ve been seeing. And that was a little bit off the topic. But Chad, if you could for our listeners, as we wrap up today’s show, I asked all of my guests, what is that nugget, that thing that you can say deliver, give information that you could provide, that you believe would be useful to our listeners, in helping them to establish the mindset necessary for them to build and create their legacy?
CHAD:
Great question. And I think about this all the time myself, especially as we’re going into markets right now where there’s a legitimate concern, interest rates have risen. Are we in a recession, all these calamities worldwide, all the things that you hear there’s a lot of negativity in the world. And I reflect on this myself, I went through the Great Recession. That was a very tough period. And there’s always something in the news, this is what I’ve realized 18 years in this business. Now, there’s always something in the news, there’s always something that will prevent somebody from making a decision, because they’ll say to themselves, well, this is happening. So maybe I should just wait. There’s never an optimal time to start getting into real estate ever. There’s never a perfect time. So instead, what I do myself is take a long-term outlook, and find something that you can see yourself holding and investing in for a long period. And that’s subjective, the long term might be 20 years, or it could mean five years, I think it’s very difficult in real estate to time the market, there are probably people that can do it, they can flip properties, and perhaps they’ve got a better system than others. I, myself, am a long-term holder. So I tried to look past all the negative news, I tried to look past what’s going to happen in the next year or two because I don’t want to buy real estate to sell that quickly. I want to buy something for legacy, exactly what you’re saying. And it’s hard to build a legacy if you’re buying and selling and buying and selling all the time. It’s great for cash flow, but it’s hard to get that really sustained wealth, versus holding a property for the long term and paying off the mortgage and increasing your rents. That to me is legacy building. So what I say to myself is ignore to the best of your abilities, what’s happening in the market on a day-to-day basis, and look for markets that you think are going to still be healthy markets 10 years from now, 20 years from now, and take that long term outlook. Do your best to mitigate your risk, and do your best to see yourself through these short-term aberrations where there could be some pressure on it. Take that long-term outlook and try to ignore all the short-term fluctuations because there are always going to be short-term problems, always. That’s never going away. But that trend line if you find the market that you believe in, you find an asset class that you believe in, take that long-term outlook, ride the trend line, as opposed to like that, that really big shifts on a day to day or week to week basis. Ignore those, look at the trend line for the long term.
CORWYN:
Wow. I love that. Look. Real estate is a long-ball game. Gotta look at the long ball, the trend. And then make your decision from there. Chad, where can our listeners get in contact with you? Because you dropped some nuggets on them today
CHAD:
Where I’ve put a lot of my attention when I’m not working or raising a family. So it’s @industrialize. So YouTube went to handles now. So it’s just @industrialize on YouTube, you’ll find my channel, and most of the topics I talked about are industrial real estate. But I do talk about real estate investing in general.
CORWYN:
Awesome, awesome. Well, I thank you. I thank you so much, Chad, for being with us. On the show. Thank you for being part of the Exit Strategies Radio Show Family, to our listeners. Guys, look. Y’all got some nuggets today. If you miss anything, I want you to go to exitstrategiesradioshow.com. On our website, I want you to look for this episode that will be released and available. I want you to go to our YouTube channel, find us on Facebook, and do whatever you need to do to get back to this episode. So you can get your notes and stuff through it your bullet points. And those questions, follow Chad, reach out to Chad, ask questions, and get engaged because you can make a difference and an impact in your life. We’re here to provide you with a vehicle. You need to drop it. You need to be the driver for your family. You need to be the driver for your community. You need to be the driver in your house. Guys, you know how I feel? You know what I say? I’m gonna put the two of those things together right now. And I’m gonna say I love you. I’m gonna say that I love you. I’m gonna say that I love you. And I’m gonna see you guys out there in those streets.
