I began developing flex space real estate 8 years ago. At some point I took 1 million dollars and began a development that is now valued at 24 million dollars. This was my second project! I am the KING of flex space real estate. The entire reason why I create content and put my company and deals out there is because I want you to know that flex space is HOT. But don’t listen to me, today we’re going to be talking about the hard data.
Flex space real estate is a sector of the industrial real estate asset class. Industrial real estate in general is a very lucrative asset class in and of itself, and flex space is actually taking over its bigger counterparts within the asset class. Check out these graphs that my team compiled below:
Look at the graph on the left. Check out the orange line, specifically 2020 Q4. The vacancy rate for industrial real estate has decreased significantly, especially due to the COVID-19 Pandemic. Why? Well as the pandemic hit, e-commerce had a big surge, and they needed spaces that could mold to fit their needs, have short leases, and that they could move into fast. This can all be done with flex space real estate. The blue bars on this graph represent the net absorption rate, as you can see it is at an all time high. This means that industrial real estate is being occupied faster than ever.
Now let’s talk about the graph that’s on the right. This graph is looking at flex space rent in particular. Again, look at 2020 Q4, that is the mark when flex space began its significant increase in popularity as needs rose.
Now what is driving demand for flex space real estate?
There is also an increase of pressure on supply chains which drives demand through the roof for industrial real estate. You can read more about this here.
Trust me, I understand that flex space sounds too good to be true. That’s why I am all in on it and I educate people on this UNTAPPED industry. But I’ll let you in on a little secret….
Flex space real estate is RECESSION-PROOF.
This has been tested. In 2016 Houston, TX went through a massive recession due to oil and gas prices. Those of you from the Houston area know EXACTLY what I’m talking about. It was a painful time, I was getting CEOs applying for administrative positions in my company at the time due to the layoffs that happened.
What I did find; however, was an inverse effect on my flex spaces. There were big name brands that were coming to me looking to downsize, and gave me leverage with my existing tenants to have longer leases and commitment. We had no problems leasing out any of my properties, I even had a 2 year waiting list of businesses that we’re ready to move in, and sign leases.
You need to be aware of the hidden gem that is flex space. Look at the data above and see for yourself the benefits of investing and developing this type of real estate. Anyone can do it, if I can come to this country not knowing anything; learn, and exit deals with massive returns, you can too. I teach people how to accomplish what I did in 8 years in just 2. If you want to learn more and join my mastermind group, Flex Space Untapped, click here.
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