🗞️ News & Moves 🏠

Trump meme coin doubles again, stake worth $58 billion or more. (Axios)

On the Friday prior, Trump dropped his official meme coin, $TRUMP, during a "Crypto Ball" in DC.

By Sunday morning, it hit a $72 billion valuation.

Trump was now one of the 25 richest people.

The Trump Organization holds 80% of the supply, locked for three years.

$MELANIA, launched Sunday, added $5 billion to the family's crypto vault.

The crypto world’s jaw?

On the floor.

Never has a politician turned influence into currency so literally.

Trump wants to lead the Fed, and he's making louder demands. (ABC)

In a virtual address at Davos, Trump demanded lower interest rates.

He linked it to his plan to pressure OPEC into cutting oil prices.

His pitch?

Cheaper oil means the Fed can ease up on inflation, dropping rates "immediately."

But here’s the kicker: the Fed doesn't answer to the White House.

Chair Jerome Powell's November "no" to resignation made that crystal clear.

Critics say letting presidents set monetary policy is a fast track to chaos.

But Trump’s making waves—and the Fed’s decision next week just got a lot more interesting.

🚨 The Fed Pulse 🚨

January 2025 marks a turning point for the U.S. economy, shifting from turmoil to stability.

The M2 money supply, now growing 1% year-over-year, signals a return to pre-pandemic norms.

The Fed's cautious normalization strategy is on track.

It will give investors clarity in 2025.

Housing offers its own glimmer of hope.

Single-family permits edged up 0.1% in Q4—a slim margin but a welcome shift from stagnation.

Add to that a surge in December's architectural billing index.

You can feel the early rumblings of a Phase B trend.

The labor market tells a more nuanced story.

Job openings fell 13.8% year-over-year and unemployment claims rose.

But, hourly wages climbed 4%.

This has fueled a wage-price cycle that keeps inflation high.

As for rates?

The 10-year bond yield is 4.64%.

Mortgage rates are near 7%.

They aren't game-changers, but they allow for modest economic growth.

2025 looks busier—and brighter.

Rate cuts?

Consider them a bonus.

Want to see my buying criteria for Small Bay Industrial?

Today, I’m tackling an insightful question from Liz that deserves a deep dive

"What criteria do you consider when evaluating a small bay industrial deal? Specifically, things like ceiling height, electrical voltage, cement thickness, location, year built, price per square foot, and more."

Let's dive in.

1. Start with Size and Pricing

The size of the property I target will depend on how well I know the market.

Here’s my approach:

🏬 In markets I know well, like Chicagoland or Florida, I would consider properties as small as 20,000 square feet.

🏬 In new markets, I want to be at least 100,000 square feet to make sure I have enough scale to hire boots on the ground.

Pricing is $50 to $100 per square foot.

It depends on three key factors.

💰Turnaround Time: Can I reposition and stabilize this property within 12 months (ideal) or 24 months (max)?

💰What are market rents? If post-renovation rents are $11–$12 (NNN) per square foot, I will pay up to $100/ sq ft all-in for the property.

For example, if I purchase a property at $85 per square foot, invest $15 per square foot in improvements, and lease it at $11 per square foot annually (NNN), the property would be valued at approximately $137.50 per square foot based on an 8% cap rate.

💰Construction. How heavy it is. If it needs $35 per square foot in CAPEX and a 3-year turnaround, I might only be able to pay $30 per square foot.

2. Location

Here’s my rule of thumb:

👍 Population Density:

• 1 mile: 10,000+ people

• 3 miles: 30,000+ people

• 5 miles: 50,000+ people

👍 Income Levels: Household incomes should be $60,000+, though I’ve made exceptions for case-by-case deals.

👍 Accessibility: I Look for properties near major highways, intersections, and business roads. Proximity to industrial zones and retail-like locations (on busy roads) adds value. Tenants with showroom needs can pay a premium for these hybrid spaces.

3. Building Specs

Let’s talk about the property itself.

🏗️ Clear Height: This is the single most important spec in small bay industrial.

• 14 feet: Minimum

• 18 feet+: Ideal

• 12 feet: Only acceptable in dense areas with super high demand.

🏗️ Drive-in Doors:

• 14 feet high: Best for accommodating most tenants.

• 12 feet: Good.

• Anything less than 10 feet and you’ll lose a significant portion of the tenant pool.

🏗️ Unit Sizes:

• Ideal: 5,000 sq. ft. space with 1 dock, 14-ft drive-in door, 500 sq. ft. office, and a bathroom.

• If no dock: 3,000 square feet with the same office and bathroom setup.

🏗️ Sprinkler Systems: This often-overlooked detail can derail your plans.

For instance, in Fort Myers, buildings over 10,000 square feet may require sprinklers.

Retrofitting a 50,000-square-foot building with new sprinkler system could cost $250,000 or more.

You don't want to absorb that expense.

4. Zoning

Zoning is one of the most complex aspects of evaluating small bay industrial properties.

Every municipality has its own codes, naming conventions, and restrictions.

Here’s how I navigate the maze:

• Research Uses: Identify allowed uses, prohibited uses, and conditionally approved uses.

• Automotive Tenants: Many municipalities are wary of automotive uses.

  Common requirements include: triple catch basins ($20K–$30K each unit) or make-up air systems ($30K+ each unit).

  If thats what requited and you have automotive, budget these expenses for new tenants.

• Always check occupancy permits and confirm automotive approval with the city.

I also evaluate zoning for tenants in service-based industries, like plumbers, HVAC techs, landscapers, cleaners etc.

These contractors often form the backbone of small bay industrial spaces.

Pro Tip: When buying in a new municipality, I always talk to three people:

1. Planning and Zoning Official

2. Fire Chief

3. Inspector for the Area

These talks help me gauge the "temperature" for different tenant uses.

5. Utilities and Layout

💡 Utilities: Ideal properties have separately metered gas and electric for each unit.

💡 Water can be shared and billed through CAM (common area maintenance) charges.

💡Power: I like each unit to have 100 amps minimum.

💡Office-to-Warehouse Ratio: Most of the space should be warehouse.

Each unit can have under 500 square feet of office and one bathroom.

6. Age, Lot Ratio, and Parking

🧱 Year Built: The younger, the better. I avoid buildings constructed before 1980, but older properties in strong markets can still be great deals.

🧱 Lot Ratio: I prefer a 1:4 building-to-lot ratio to ensure adequate parking.

• Minimum parking: 2 spots per 1,000 square feet, ideally 3–4 spots.

• Outside Storage: Ensure units with docks have 1-2 parking spots for box trucks or trailers.

7. Leases

The final piece of the puzzle is the existing leases. Here’s what I look for:

• Short-Term Leases: Gross leases or month-to-month terms are a huge opportunity. Properties owned by the same landlord for 10–15 years often have below-market rents.

• Repositioning Strategy: I aim to improve the property with modest fixes—painting, asphalt repairs, and roof maintenance.

  When leases come up for renewal, I negotiate market rents as NNN leases with 3–5 year terms.

This is the easiest and most immediate way to increase a property’s value and cash flow.

Takeaways

1️⃣ Short-Term Leases = Opportunity: Seek properties with below-market rents on short-term leases. They should need light renovation also.

2️⃣ Clear Height is king: demand drops sharply for spaces with ceilings below 12 feet.

3️⃣ Zoning Requires Homework: Study allowed and prohibited uses, plus conditionally approved ones.

That's it for today.

Hope it provides some value or expands your horizons.

As you see, this ain't rocket science.

Have any questions, hit reply (I read every email)!

Till next Sunday @ 9:07 am.

Be Well,