Real Estate Strategy
WREN Capital’s real estate strategy is focused on small-bay, single-tenant industrial and industrial outdoor storage (IOS) properties in Phoenix and strategic growth markets across the Southwest. These properties are in demand by tenants, while institutional investors seek portfolios that allow for efficient capital deployment. WREN Capital’s approach to aggregating these asset types helps fulfill the need of users as well as larger investors seeking to capitalize on this growing demand in a typically fragmented market.
Demand is growing...
while supply is diminishing
The industrial real estate sector, and our targeted asset types specifically, is experiencing unprecedented demand due to:
E-Commerce Growth
The continued rise of e-commerce has heightened demand for last-mile delivery hubs and facilities that cater to small- and mid-sized tenants
Population and Economic Growth in the Southwest
Cities like Phoenix, Dallas, Salt Lake City, Denver and Las Vegas are experiencing population and business growth, spurring demand for industrial real estate.
Supply Constraints
Limited supply of small-bay industrial assets, combined with high land value appreciation and rising construction costs, enhances the potential for capital appreciation.
Infrastructure and Distribution Focus
The Southwest region serves as a critical logistics and distribution hub due to its proximity to ports, major interstates, and neighboring markets such as California and Mexico.
Supply/Demand Imbalance
Limited availability and ever-growing demand from users has created a supply-constrained market with exceptional upside for disciplined owners and aggregators.
Analysts estimate the small bay sector makes up ~41% of the overall US industrial market with a remarkably low vacancy rate of 4% and institutional investors are seeking their market share.
Small-bay industrial is integral in today’s business economy given ecommerce demands and a return to U.S. business manufacturing and production. These facilities are primarily used by businesses requiring smaller warehouse and office combinations, including fulfillment centers, small distributors, satellite operations for larger companies, light manufacturing, local contractors and mechanics; essentially any operation that requires under 100,000 square feet of flexible space. They are often found near transportation hubs, small business parks or convenient urban in-fill locations.
Common Uses
Logistics & Fulfillment
Smaller distribution centers focused on last-mile delivery, particularly for online retailers and small businesses.
Light Manufacturing
Suitable for smaller-scale manufacturing processes, including assembly and on-demand production, where large spaces aren’t necessary.Specialized Trades / Flex Space
Ideal for small businesses like local contractors, HVAC companies, and delivery services with a need to store inventory and conduct operations.The Case for Industrial
Outdoor Storage
Analysts estimate the fragmented IOS market to be worth about $200B in the U.S. and institutional investors are seeking their market share.
Chances are, you’ve driven by hundreds of IOS properties and never thought twice about the inherent value of these primarily open-air commercial storage yards. Often referred to as contractor or lay-down yards, these properties typically range in size from 1-10 acres with basic improvements such as small buildings, pavement, security and lighting. They are often found in infill locations with convenient freeway access and near industrial corridors, airports and rail facilities. They are integral and necessary for construction, logistics, parking, maintenance and even equipment rental.