COMPETENCE
Our team comprises industry experts with extensive knowledge in risk management and earthquake insurance. We understand the nuances of seismic risks and are adept at crafting strategies to mitigate them.
EXPERIENCE
We believe in demystifying insurance jargon. Our communication is straightforward, making complex concepts accessible and understandable. We empower you with all the necessary information, allowing you to make decisions with clarify and confidence.
CLARITY
We're constantly seeking innovative ways to enhance our services and solutions, ensuring they are effective and efficient. In a world where risks evolve rapidly, our team is flexible and quick to adapt, ensuring that your needs are met with the most current and effective strategies.
EXPERTISE
We hold ourselves to the highest standards of ethical conduct, ensuring that your trust in us is well-placed. We are accountable for delivering results that meet your needs and exceed your expectations.
OUR STRATEGY
Target Asset Profile
• Sub-Institutional Deal Size: $5-$25 million
• 1980’s vintage or newer, Class B
• No metal, concrete tilt or masonry
• Multi-Tenant with WALT of 2-4.5 years
• Dock-high and grade-level loading
Leverage
•Positive leverage day one
•50-60% LTV (moderate leverage)
•5-7 year loan terms
•Regional Bank, LifeCo or Credit Union
•Prepayment flexibility (Year 3 or sooner)
Geography
•Primary and Secondary MSA’s across the Southwest US (population 2mil+)
•Southwest focus, preference for major Texas markets & Phoenix
Preferred Metrics
•ROC 7.50%+ by Year 5
•Existing Cash Flow + Upside
•20’+ clear height, 1.5+/1,000 SF parking
•Excess Land
Sourcing
•Brokered and non-broadly marketed
•Private, non-institutional Sellers
•Direct Sourced
•Buyer Broker Finders Fee
Property Types
•Shallow-bay industrial
•Flex/R&D
•Manufacturing / Production
•Light Distribution / Light Assembly
•Single-Story Office with conversion potential
•Low-rise, low coverage office sites with redevelopment potential
Target Returns
•13%-15% Net IRR
•1.6x-1.8x Net MOIC
•Avg. C-o-C of 6%+
•Development
•20-25% Net IRR, 1.5x-1.75x Net MOIC, Stabilized Untrended ROC of 7.00%+ (targeting ~150+ bps of ROC spread)
Exit Strategy
•5-7 year anticipated hold period
•Aggregate 500k-1mil SF portfolio per market, thoughtful portfolio construction
•Operational scale and efficiency, residual scale for an institutional exit
•Diversified tenant credit and industry exposure, lease roll risk, and geographical and market industry drivers
We target primarily shallow-bay and light industrial opportunities in high-growth Primary and Secondary MSA's across the Southwest and Mountain West that can be repositioned or recapitalized to enhance value. The management team has extensive institutional experience owning, operating, repositioning, developing, and disposing of industrial assets.
Hammond Capital is a private real estate investment management firm headquartered in Dallas, TX with a primary focus on industrial value-add acquisitions and infill development.
The firm seeks attractive risk-adjusted returns for its investors by acquiring lower middle-market assets from private non-institutional sellers below their inherent value and below replacement cost and sourcing either directly or via brokered and non-broadly marketed processes, as well as opportunistically developing assets in select infill locations with robust demand fundamentals and high barriers to entry mitigating the risk of new competitive supply.
OUR STRATEGY
Limited Supply
•High barriers to entry, replacement costs for this product profile in target markets often exceed $200+ PSF
•New supply concentrated in larger bulk product (250k+ SF equates for 60%+ of U/C), limited new shallow-bay supply
•Very tight availability, current occupancy for <100k SF is _% nationally
Outsized Demand
•__% of 2021-2023 absorption in Phoenix was for transactions <100k SF,
•__% of 2021-2023 absorption in DFW was for transactions <100k SF
•Vast majority of user demand in target markets remains in the smaller 20k-50k SF range
Fundamental Tailwinds
•Onshoring/nearshoring and the resurgence of domestic high-tech manufacturing driven by global geopolitical risk, the CHIPS act, and improper IP regulation and enforcement in China
•Evolving inventory management practices driven by the growth in e-commerce, last mile and omnichannel distribution, and same-day consumer delivery demands
Limited Competition
•Less deal exposure leads to thinner bid sheets and less competition
•Smaller transactions equate to same amount of work but less gross $’s
•Less investor focus and competition for non-pure logistics light industrial product
Outsized Rent Appreciation
•%__ avg annual rent growth the past 5 years for light industrial, --% projected rent growth next 5 years
•Rapid rise in interest rates curtailed new construction, infill land costs & scale inefficiencies to construct smaller shallow-bay product has led to supply constraints that continue to drive outsized rent growth
Inefficient Space
•Private, less sophisticated non-institutional Sellers
•Less sophisticated intermediaries with shallower networks and less efficient marketing processes
•Assets are unloved and undercapitalized; they are not institutionally managed and maintained
•Inefficiencies lead to higher likelihood of sourcing assets that can be acquired below inherent value
3
CAPEX + REPOSITIONING
• Address deferred maintenance needs
• Renovation of interiors
• Exterior improvements, aesthetic enhancement
• Make value-additive spec improvements
• Reposition and rebrand
• Institutionalize management & leasing
1
TARGET MARKET SELECTION
• Long-term population growth
• Employment growth & corporate relocations
• Pro-business tax & regulatory environment
• Robust STEM & manufacturing labor
• Relative affordability
• Quality of life
2
BUILD ROBUST PIPELINE
• Establish depth of broker relationships
• Build direct & off-market deal flow
• Underwrite multiple properties extensively
• Selectively invest in attractive assets
• Aggregate with focus on portfolio construction
5
STRATEGICALLY EXIT
• 5-7 year anticipated hold period
• Increased liquidity due to portfolio scale
• Target institutional buyers, PE or REIT
• Run an efficient broadly marketed process to maximize exposure & competitive pricing
4
STABILIZE PORTFOLIO
• Lease-up vacancies, stabilize occupancy
• Mark rents to market upon lease rollover
• Renew tenancy and enhance WALT
• Re-tenant for optimal use and credit
• Improve operational efficiencies & systems
Limited Supply
• High barriers to entry, replacement costs for this product profile in target markets often exceed $200+ PSF
• New supply concentrated in larger bulk product (250k+ SF = 65% of U/C, while <100k SF = 5%), limited new shallow-bay supply with only ~100mil SF added since 2020.
• Industrial <100k SF represents 42.5% of inventory with a vacancy rate of just 3.8% (compared to 6.4% overall)
Outsized Demand
• Bldgs. 100k SF & under = 35% of total leasing activity for 2024 YTD, 300k SF & under = 65%
• Target markets disproportionate 2024 YTD absorbed SF (DFW 9.7m, PHX 12.6m, HTX 6.7m, SLC 5.5m, ATX 4.4m)
• Vast majority of user demand in target markets remains in the smaller 20k-50k SF range
Fundamental Tailwinds
• Onshoring/nearshoring and the resurgence of domestic high-tech manufacturing driven by global geopolitical risk, the CHIPS act, and improper IP regulation and enforcement in China
• Evolving inventory management practices driven by the growth in e-commerce, last mile and omnichannel distribution, and same-day consumer delivery demands
Limited Competition
• Less deal exposure leads to thinner bid sheets and less competition
• Smaller transactions equate to same amount of work but less gross $’s
• Less investor focus and competition for non-pure logistics light industrial product
Outsized Rent Appreciation
• CBRE reports the light-industrial space (70k SF and under) has the lowest avg availability, the highest average rents, and the greatest rent growth over the previous 5 yrs
• Rapid rise in interest rates curtailed new construction, infill land costs & scale inefficiencies to construct smaller shallow-bay product has led to supply constraints that continue to drive outsized rent growth
Inefficient Space
• Private, non-institutional Sellers
• Intermediaries with shallower capital market networks and less efficient marketing processes
• Assets that are unloved and undercapitalized; and not institutionally managed and maintained
• Inefficiencies lead to higher likelihood of sourcing assets that can be acquired below inherent value and generate alpha
OUR PROCESS
DFW METRO
PHOENIX
AUSTIN
HOUSTON
DENVER
SALT LAKE CITY
DELIVERING Q1 2025
INDUSTRIAL WAREHOUSE
123 Main St. | Dallas, TX 75204
4 BUILDINGS | 156,000 SF
DELIVERING Q1 2025
INDUSTRIAL WAREHOUSE
123 Main St. | Dallas, TX 75204
4 BUILDINGS | 156,000 SF
DELIVERING Q1 2025
INDUSTRIAL WAREHOUSE
123 Main St. | Dallas, TX 75204
4 BUILDINGS | 156,000 SF
DELIVERING Q1 2025
INDUSTRIAL WAREHOUSE
123 Main St. | Dallas, TX 75204
4 BUILDINGS | 156,000 SF
DELIVERING Q1 2025
INDUSTRIAL WAREHOUSE
123 Main St. | Dallas, TX 75204
4 BUILDINGS | 156,000 SF
DELIVERING Q1 2025
INDUSTRIAL WAREHOUSE
123 Main St. | Dallas, TX 75204
4 BUILDINGS | 156,000 SF
TRANSACTIONAL EXPERIENCE
CRE LENDING
Construction and Acquisition, Land Acquisition, Due Diligence, Project Design, and Entitlements
ASSET TYPES
Industrial, Flex/R&D, Manufacturing, Land, Office, Retail, Mixed-Use, Multifamily
MARKETS
Texas, Arizona, Utah, Colorado,
Indiana, North Carolina
ACQUISTIONS + DEVELOPMENT
ASSET MANAGING + LEASING
DUE DILIGENCE + DISPOSITIONS
DIRECT INVESTING + JOINT VENTURES
ASSET-LEVEL + SYNDICATE FINANCING
CONSTRUCTION FINANCING
BROKERAGES TRANSACTED WITH
OUR THESIS
We strive to generate alpha by capitalizing on inefficiencies within the lower middle-market that arise from special situations or unique circumstances where assets are mispriced. We have a preference to buy from Private non-institutional Sellers who are often occupancy driven to the detriment of maximizing income potential and asset value, creating operational upside. We avoid full broadly marketed processes which drive significant competition and in turn drive valuations and materially reduces risk premiums. We look for aligned incentives with entrepreneurial broker intermediaries and motivated Sellers that results in achieving attractive risk-adjusted opportunities.
There is an inherent barrier to entry for new shallow-bay and light industrial construction given rapidly rising construction costs and economies of scale which has resulted in very limited availability and outsized rent growth. This has led to an ability to acquire functional infill assets at valuations well below replacement cost with significant income growth potential. Many fundamental secular shifts are underway including the onshoring and nearshoring of goods, evolving inventory management practices and same-day delivery consumer demands which has led to robust fundamental tailwinds that continue to drive compelling user demand for infill industrial. There is substantial institutional appetite for this sector and asset profile, yet it is very difficult for them to access and very inefficient for them to deploy capital at this scale, providing an aggregation opportunity for a larger middle-market institutional exit that will result in cost of capital arbitrage and the capacity for yield compression.