*From the Colliers website: With more than 25 years of commercial real estate experience, Dwight Hotchkiss is an innovative leader who heads Colliers’ Brokerage Services platform, which includes 23 practice groups with more than 600 brokers across the U.S. Drawing on years of on-the-ground experience as well as senior leadership, Dwight also develops strategies on an executive level as the National Director of Industrial Services. In his role, Hotchkiss is focused on the ongoing development of these specialty focus areas by increasing company connectivity and broker productivity, as well as expanding the Industrial Services client base for leasing, management and capital markets opportunities. He is an expert in national industrial trends.
Hotchkiss also supports Colliers’ recruitment and development, and has formed the Next Gen Network, which focuses on fostering the advancement of Colliers professionals who have been in the business five years or less.
Colliers International is one of the leading publicly traded real estate firms in the world - trading on the NASDAQ as “CIGI”. Primarily, Colliers International provides brokerage, advisory and research services to its clients from its over 500 offices worldwide. So, in turn, we at the Trojan Real Estate Association are extremely excited to be talking to Mr. Dwight Hotchkiss today.
Why did you gravitate towards the Industrial product type as you were beginning your career Mr. Hotchkiss?
Easy enough. Industrial has never been sexy, but it is hot right now.
I was really attracted to the kind of people in my space as well as the clients we served. My peers were more collaborative and more down-to-earth. Our clients were primarily blue-collared individuals who represented companies which drove our national economy. Their people were great to spend time with and still are at conferences we (Colliers) host around the United States. So in essence, everyone is competing; but it is not as cutthroat as it is with a few other product types.
We seem to be seeing a revolution within Industrial CRE. What is fueling this growth and what does the future hold?
US Industrial is now attracting institutional capital in certain markets because of the booming Asian economies, the American E-commerce boom, our already developed infrastructure, our insatiable consumer appetite as a nation, and the low vacancies in important markets like greater Los Angeles and greater Chicago.
Los Angeles alone holds the two busiest ports in the world, Long Beach and the port of LA. The vacancy rate for the Los Angeles Basin, including the Inland Empire, is 2.6%. The level of demand in this region is phenomenally high because LA is the primary offloading point for all Asian goods entering the United States. Los Angeles has excellent infrastructure for shipping goods east as well as a wealthy local consumption base. Developers are now scrambling to deliver more product like distribution centers or reverse logistics facilities in an attempt to keep up with demand.
Are similar trends being seen in other markets outside the United States?
You have to remember that industrial real estate is the foundation of any economy. With developed economies, everything must be stored, organized and shipped at one point. So yes, Europe especially is experiencing a similar boom with e-commerce leading growth but the United States is still many years ahead in terms of growth.
When comparing the US to other countries, let’s say, in Latin America. The real issue is less consumer appetite but more of an infrastructure problem. North American infrastructure is 20 years ahead of infrastructure in most Central and South American countries. That alone really inhibits growth in the industrial Real Estate sector.
So, back to American markets, can you talk about the rise of Inland Ports and what they are in general?
So, inland ports are ports which are connected to a waterway, like a river, or are connected to major ports by rail or other form of infrastructure. Inland Ports have always been present but they are especially relevant now as the United States has begun importing more and manufacturing less. Secondary cities and tertiary cities are consuming more and inland ports are necessary to meet their demand in an efficient manner. Inland ports, like Chicago, usually have lower labor costs than gateway coastal markets, possess the necessary infrastructure to process the imported goods, and in turn are great hubs for intercity transport.
Chicago is great example because of its location at the convergence of 6 class-A railroads and perfect proximity to not only primary markets nationwide, but also secondary markets in the Midwest as well. The city also has a population of around 9.7 million which acts as its own significant local consumption base. These characteristics make it an industrial hub with global connectivity.
With all of this growth in the sector, how does Colliers’ plan to outshine its competition and capture more market share?
We really focus on developing talent within our company and providing the most value to clients. Colliers’ professionals bring Thought Leadership to deals which helps unlock value for clients and help them understand their project in the great context. Colliers provides research and local expertise to help clients see trends. We provide insider market knowledge and always focus on furthering their goals. The client is always paramount.
What can current students and aspiring Real Estate professionals do to best prepare for their careers? What does Colliers and Industry need?
Our business needs a new generation who can understand technology on a native level and be forward-thinking enough to see the importance of trends like sustainability. I think technology, integrated with buildings, and sustainability initiatives are the future of our industry.