SIOR Hosts Member Networking Event at Ferry Building

Commercial Real Estate Panel Shares Insights Into What’s Ahead for Final Quarters of 2024

SAN FRANCISCO – March 7, 2024 – The Northern California chapter of the Society of Industrial and Office Realtors® (SIOR) held its annual kick-off meeting at the Ferry Building last month. Panelists included Travis Durfee, senior vice president, head of operations, Prologis; Bryan McKrell, managing director, West Region, Link Logistics; Paul Stein, co-founder and principal, SKS Partners; Abbie Wertheim, development manager, Panattoni Development Company Inc.; and Heather Belfor, U.S. research director, Prologis. The event was moderated by Jordan Schnitzer, president and CEO of Schnitzer Properties.

Here are some of the highlights from the panel:

Belfor started out the discussion with optimism, pointing out that the Bay Area market is in equilibrium, business confidence is improving and “2025 will be a great year”.

“During the dot-com bust, job losses were worse than now,” she said. “Home prices in the Bay Area are increasing. It is not doom and gloom.” Belfor also mentioned that rent growth remains steady because renters want to be here.

“We will probably never see that rent growth again,” she predicted. “Moreover, the need for resilient supply chain product is still there so the demand for warehouse continues.”

McKrell said industrial demand is narrowing in terms of geography and tenant type.
“It used to come from all tenants and areas, but the finished product is nearer the consumer in terms of food and beverage cold storage,” he said. “And (the requirements for) clear height are not as big. In addition, power is a topic that comes up a lot.”

Wertheim said interest rates, not fully absorbed by cap rates thus far, have affected what Panattoni is doing, i.e., more build-to-suits. She and Durfee both pointed out that the entitlement/permitting process is more demanding and requires more community outreach.
“We are optimistic that things will get moving,” she said. In that regard, Wertheim said Panattoni is working more closely with brokers to create opportunities.

Stein agreed that higher interest rates and office vacancies are a factor in San Francisco, which has “historically been a small tenant town”. Despite those headwinds, SKS Partners is doubling down on the city’s prospects.
“We’re making a big bet on San Francisco,” he concluded.

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