The FORT Podcast: Nick Huber + Chris Powers Vol. 1
Part 1 of the 2-part exciting webinar session that Nick Huber had with Chris Powers on The Nick Huber Show. They talk about current events, highlights of our acquisition process, the market for GP, and many more!
(04:50) – Thoughts on Interest Rate Hikes & Covid-19 Learnings
(09:04) – Inflation & Deflation
(15:16) – Industrial & Storage Rent Rates
(20:40) – Outdoor Storage Needs
(22:50) – Wealthy vs. Middle Class Consumer Behavior
(24:18) – Bitcoin, Crypto & Web3
(29:57) – BREIT
(32:41) – Population Growth & Migration
(37:36) – In-office vs. Remote work
(46:30) – Building a Sustainable RE Private Equity Company
(48:48) – Inflation Prredictions
(49:58) – Can normies still get into self-storage?
(52:39) – Wrap Up
Nick Huber, acclaimed for his profound understanding of the real estate landscape, graced Chris Powers’ podcast to dissect the multifaceted world of property investment and management. Huber’s expertise is not merely academic; it’s founded on years of hands-on involvement in the sector, making him a voice of authority on the subject.
The episode commenced with an exploration of the current state of real estate. Huber and Powers delved into the significant influence of debt costs on the industry’s dynamics. When debt is affordably priced, real estate thrives. Conversely, when debt becomes costly, the attractiveness and value of real estate diminish. This relationship underscores the symbiotic interplay between economic mechanisms and the property market.
A notable concern raised was the escalating costs of construction, currently acting as a deterrent to building endeavors. This rise in expenditure has led to a marked decrease in the development of houses and storage facilities. Such challenges aren’t just fiscal; they have profound implications for housing availability and infrastructure development.
The intricacies of industrial buildings also took center stage. Huber pointed out that while industries grow exponentially, the same cannot be said for the construction of industrial buildings. He cited historical benchmarks like the Empire State Building, which was erected in just 18 months in the early 1900s, exemplifying the evolution of construction timelines. However, the crux of the discussion was the role of last-mile delivery costs in shaping industrial real estate valuations. With a significant proportion of last-mile costs and only a fraction attributed to real estate, the sector’s dynamics become intriguingly complex.
Juniper Square’s mention, an all-in-one investment management software tailor-made for real estate owners, highlighted the digital transformation sweeping across property management. Fort Capital’s adoption of this platform illustrates the tech-driven paradigm shift in managing investments, streamlining operations, and ensuring efficient capital allocation.
In a world increasingly driven by crowdfunding, the real estate sector is not an exception. Huber noted the burgeoning trend of tier-one firms resorting to crowdfunding to pool capital. This method’s growing prominence underscores its potential to democratize investment processes, making them accessible to a broader investor base.
One of the standout segments of the conversation revolved around the tenets of building a sustainable real estate private equity firm. The dialogue underscored the importance of robust operations and the challenges tied to human capital acquisition. As Huber pointed out, the equilibrium between investment and operations is a delicate one, with the latter currently presenting more formidable challenges than capital itself.
As the discussion progressed to construction’s current state, Huber emphasized the acute housing shortage in the U.S. The rising costs of construction materials and the consequent implications for building projects were spotlighted. Huber’s insights underscored the imperative for real estate operators to adapt, innovate, and stay ahead of these challenges to remain viable and profitable.
The Fort is produced by Johnny Podcasts