welcomia/iStock via Getty Images As I mentioned in my Net Lease article last week , before I became a real estate developer, I was a broker, and like most brokers starting out, I learned the business from the ground up, one deal at a time. One of the first properties I cut my teeth on was a 50,000-square-foot industrial flex building in Spartanburg, South Carolina. It was a spec building developed...
welcomia/iStock via Getty Images As I mentioned in my Net Lease article last week , before I became a real estate developer, I was a broker, and like most brokers starting out, I learned the business from the ground up, one deal at a time. One of the first properties I cut my teeth on was a 50,000-square-foot industrial flex building in Spartanburg, South Carolina. It was a spec building developed by one of my wealthy clients who owned similar properties in the southeastern US. Over the next 12 months, I leased that building to 100% occupancy, and that experience taught me an early and lasting lesson: demand for well-located industrial space is a great way to create and preserve wealth. Not long after, the owner of that building (who also controlled a food manufacturing facility next door) provided me with the opportunity to structure a sale-leaseback transaction. This was the biggest deal of my career at the time (I was just 23 years old), and it gave me the motivation to do more deals. A few years later, I sold another building across the street that was leased to Owens Corning. This was the third deal in my real estate career that inspired me to pivot from brokerage to ownership. I went on to co-develop an industrial park (with 10 buildings), purchase two large warehouses leased to Goodyear Tire, and, most notably, structure a build-to-suit for a Tier 1 supplier to BMW. What started as a single building… became a network of industrial demand… little did I know that I would also become a research analyst covering the Industrial REIT sector, which now boasts a market capitalization of over $170 billion. A Sector That Has Delivered Those early experiences as both a broker and investor shaped how I think about industrial real estate today. Because over the last 15 years, particularly in the period following the Global Financial Crisis, the industrial sector has been one of the best-performing property types in the REIT universe. As the chart below illustrates, over t...
India’s efforts to shield consumers from a historic oil shock are reverberating through the refining sector, squeezing margins, stretching balance sheets and forcing companies into costly workarounds. Since US and Israeli strikes on Iran began at the end of February, refiners in the world’s third-largest crude importer have had to contend with the effects of a sharp rise in prices, freight and ins...
India’s efforts to shield consumers from a historic oil shock are reverberating through the refining sector, squeezing margins, stretching balance sheets and forcing companies into costly workarounds. Since US and Israeli strikes on Iran began at the end of February, refiners in the world’s third-largest crude importer have had to contend with the effects of a sharp rise in prices, freight and insurance costs, all compounded by a weaker rupee. They have also had to scramble to find alternatives to Middle East cargoes. The government, with an eye on price-sensitive voters, has instead prioritized fuel availability and accessibility. It has kept pump prices frozen through the war — limiting state processors’ ability to pass on costs — while imposing crippling taxes to curb exports. Refiners have also been pushed to maintain run rates and to crank up production of low-margin liquefied petroleum gas, to help resolve an acute shortage of the cooking fuel. The result, refiners say, is unprecedented strain. “We have never seen such a situation earlier,” Srinivas Tuttagunta, chief operating officer of private behemoth Reliance Industries Ltd. , told analysts late on Friday. Freight rates have jumped 10–15 times, crude premiums have surged to $20–$30 a barrel from just a few dollars pre-conflict, and war-risk insurance has ballooned from thousands to near million dollars, he added. India’s integrated processors need crude prices around $80–$85 a barrel to break even, according to analysts at Macquarie — a level the market has far exceeded in recent weeks. Brent touched $108 a barrel Monday as efforts to resume peace talks over the Iran war stalled, adding to pressure on the government to consider raising prices for the first time in four years. Oil refining and retailing companies are currently losing revenue worth about 100 rupees ($1.1) per liter on diesel and 20 rupees on gasoline, according to the oil ministry. Based on India’s crude import cost and low fixed margins, ga...