Industrial developer LPC Desert West has not changed its acquisition and expansion strategy this year. At the start of the year, LPC Desert West set out regional expansion plans—which includes acquiring properties in Phoenix, Las Vegas and Salt Lake City—and it hasn’t made any adjustments to those plans. In fact, the firm has seen market drivers accelerate as a result of the pandemic, strengthening its acquisition goals.
“We planned to roll out a regional expansion in 2020, and the pandemic has not changed that.” David Krumwiede, EVP of LPC Desert West. “We have had to operate differently in some ways, like completing initial scouting tours on our phones or having limited time to be in-market and boots-on-the-ground for in-person tours. But overall we’ve been able to move forward without major hurdles.”
The firm’s strategy is focused on ecommerce-servicing real estate and logistics properties, which have benefitted from the pandemic, but it has also targeted manufacturing buildings. “The pandemic has accelerated what we had already predicted would be a strong industrial market,” says Krumwiede. “That just makes us even more laser-focused on modern logistics and manufacturing buildings.”
The firm’s industrial strategy is on track, but the firm’s office strategy has paused as companies have transitioned to remote work policies. “Companies will need to reoccupy their office space before we’ll see that sector recover to its full potential, but we believe that is coming,” says Krumwiede. “A lot of folks came out early on saying that working from home is great, but companies are beginning to walk back those statements, replacing them with return-to-work messages.”
Krumwiede expects that companies will permanently adopt some form of a work-from-home strategy; however, social distancing could have a positive impact on office. “In the long term, we may see employees work from home one or two days a week, but in general people are recognizing the value of collaborating in person,” says Krumwiede. “When companies do return, the days of 6 or 9 employees per 1,000 square feet is probably gone. People are going to want more space per person, which at the end of the day will likely balance out overall space needs to near what we’re at now.”
For this reason, LPC is exploring acquisition strategies in office. “Firing up an office building is a bit more challenging right now but we are positioning ourselves to also buy and build in that sector,” says Krumwiede. “Like we’ve done in Phoenix, we would consider building if it’s what is right for the market – maybe with a build-to-suit or a major pre-lease commitment.”
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October 01, 2020 at 03:00PM
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LPC’s Industrial Strategy Unaffected By the Pandemic - GlobeSt.com
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