Steve Hamilton joins host Joel Simon to discuss certain segments of the real estate market and related financing that remained robust in the midst of the pandemic.
Transcripts
Joel Simon:
busy year-end and kickoff to:
Steve Hamilton:
Thanks Joel, it’s good to be here.
Joel Simon:
in the first quarter of:
Steve Hamilton:
Sure. As we know,:
ear and the beginning part of:
Joel Simon:
Those are certainly significant contrasts to other subsectors in real estate such as mom-and-pop retail, certain big box stores, and strip malls which have taken big hits. I know there’s also been a market and demographic shift caused by, or accelerated by, the pandemic—creating opportunities for new home building as well as for apartments and mid-sized and smaller cities in certain parts of the country. What can you tell us about these opportunities?
Steve Hamilton:
prising in the latter half of:
Joel Simon:
I’d like to go back to something you mentioned earlier regarding large distribution centers, warehouses, and port cities or transportation hubs. I guess companies are able to look at those as a means of lowering operating expenses if they can take advantage of the market in that way, and it sounds like a potential win for certain areas that need to shore up their tax base as well as provide jobs and attract new residents. I’m thinking of East Coast port cities such as Boston, Mass., Bridgeport and New Haven in Connecticut, Newark, N.J., as well as Baltimore, Md. What are your thoughts on that area of growth?
Steve Hamilton:
Absolutely, I agree with you. I would add Jacksonville, Florida to that list. The port of Jacksonville has been expanding over the last decade, and the surrounding areas in Jacksonville which is the biggest metropolitan area within the United States, has grown exponentially during that time, so there are definitely opportunities there. As the e-commerce world expands, the distribution centers are becoming more and more important for those e-retailers. They want to be able to have their product off the ship and in a distribution center and quickly to the end user so that they can meet their one-day shipping or two-day shipping or in some instances six-hour shipping, and so having proximity to ports—whether it be Jacksonville, New Haven, Long Beach—having proximity to both those ports and to major distribution hubs and the highway system is going to be critical. and the Biden administration is pledging two trillion dollars. That’s going to be a huge amount of money going toward ports and bridges and expanding what is already there and making it modern, and I think that the banks are going to follow that. If the developers are building warehouse facilities, cold storage, what have you, to serve those e-retailers, the lenders will follow and they love to see credit when if you’ve got the Amazons or the Wal-Marts of the world putting in distribution centers—that is blue chip. That’s gold star. The lenders follow that. The developers seek those tenants out, and I definitely see those port areas being further redeveloped and moving toward a future where there will be more and more distribution centers in those areas in order to meet the needs of the customers who now have a somewhat insatiable desire to have things delivered in a moment’s notice. I definitely see that trend continuing post-COVID.
Joel Simon:
Well it sounds like we have a topic for a future episode—the tie-in of real estate and infrastructure. Thanks so much for this look at some of the bright spots in what was an otherwise gloomy season for new real estate projects and financing. It’s been great chatting with you today.
