Industrial Real Estate Growth Strategies for 2025 and Beyond With Scott Robinson, Real Finds Podcast #55 Transcript
Scott Robinson: People are looking at making investment decisions, whether they’re occupiers or property owners. Combine that with where certain owners are in their investor life cycle and their building life cycle, and you’re going to see more transactions this year. There’s definitely appetite to start buying again after what you might call a nuclear winter for the past two and a half years. Real estate people are acquisition-minded, and we want to get back to work. There’s now interest to get something done.
Gordon Lamphere: Hi, I’m Gordon Lamphere, and welcome to the Real Finds Podcast, the podcast that interviews key entrepreneurs, activists, and researchers shaping real estate and, as a result, our world. On today’s podcast, we speak with Scott Robinson. Scott is Senior Vice President of Corporate Development at Plymouth Industrial REIT and a professor at NYU’s Schack Institute. Today you’re in for both an intellectually and financially enriching conversation about the state of industrial real estate in 2025, how investors are navigating liquidity crunches, how e-commerce growth continues to drive logistics, the effect of potential tariffs, and how energy costs are a sneakily important line item for investors. If you’re interested in industrial, this is a must-listen. Scott, thank you so much for hopping on the podcast today.
Scott Robinson: My pleasure. Thanks for having me. I know it’s been tough to get me scheduled, so I appreciate it.
Macro Trends and the Nuclear Winter
Gordon Lamphere: The best ones are always tough to schedule. We’re talking about what I’d say is the best market in real estate these days, industrial. What are the biggest macro trends you’re seeing?
Scott Robinson: It’s been a very interesting year, probably two and a half years, for real estate in general, and probably more so for industrial, because we’re coming off such a sugar high during and immediately after COVID. We’ve taken a bit more heat than other sectors in the capital markets, though fundamentals have still been great, and I think that’s starting to temper. I was at a fundraising seminar this morning, and one of the big allocators was debating whether we’ve been through a nuclear winter the past two years or just somewhere north of the Wall, a Game of Thrones analogy. It’s been tough. But from an industrial perspective, a lot of the macro trends we were looking at before, during, and after COVID haven’t really changed. From an academic point of view, I’d argue some haven’t come to fruition at the velocity we anticipated, but it’s hard to tell coming off that sugar rush.
Gordon Lamphere: The markets were high on a tremendous amount of liquid capital. In the Chicago market, Illinois and Wisconsin, we’re seeing a lot of sellers who think it’s 2022 and buyers who realize we’re in a very different liquidity market. How do you see that buyer-seller gap playing out, and is it narrowing?
Scott Robinson: That’s the question, and my answer is, it depends. It depends on geography; Chicago and the lower Midwest and Southeast industrial markets have been doing well. It depends on property type; industrial and data centers particularly, and retail has been crushing it. More importantly, it depends on each owner’s situation, where they are in their asset life cycle and their capital partners’ life cycle. There’s been more enthusiasm generally since the election, for a number of reasons. Maybe your candidate won, maybe not, but having clarity on an outcome loosened up sentiment, both in the capital markets and in business investment decisions. Some indices have tempered in the past month, but generally, people are looking at making investment decisions, whether occupiers or owners. Combine that with where owners are in their life cycles, and you’ll see more transactions this year. Real estate people are acquisition-minded and want to get back to work. But your point is spot on: the bid-ask gap is still pretty wide, and depending on the pressure of the situation, people are transacting. I was looking at industrial cap rate spreads to Treasuries: the 2010-to-2020 average spread was something like 340 basis points. Pre-COVID industrial was a different market. That came down to about 100 or 105 basis points in early 2024, even during the nuclear winter. It’s probably gapped up a little as things loosen, but that’s still a pretty good spread, and it demonstrates the appetite. Cap rates have gapped up more for Class B than Class A, but deals are getting done.
Plymouth’s Footprint and the Bifurcation by Size
Gordon Lamphere: Where is your portfolio primarily located, so listeners have context?
Scott Robinson: Quick background: I’m SVP of corporate development for Plymouth Industrial REIT, a NYSE-listed REIT with about thirty-four million square feet, primarily in the Southeast and lower Midwest: Chicago, Columbus, Memphis, Nashville, Atlanta, Jacksonville, good longer-term growth markets for jobs and employment. I’m also an adjunct professor in NYU’s master of science program in real estate. Today I’ll keep my commentary more academic, since the REIT is in a blackout period with earnings coming up. Coming off the COVID demand, we’re still dealing with two things. One was a significant increase in construction activity to meet e-commerce demand, mostly 500,000-square-foot-plus product, nationally but concentrated in top-fifty and coastal markets. The other was occupiers’ supply chain concerns, which caused them to grab a lot of space before rents ticked up and vacancy got tight. Today we have a dual overhang: too many deliveries in the past year or so in the bigger-box space, and occupiers with a little more capacity than they need. So the larger segment is feeling more pressure, with vacancy probably closer to ten percent. National averages are around eight percent, which we haven’t seen since 2016. But shallow-bay or smaller-footprint product, call it 100,000 to 300,000 square feet, is probably closer to six percent vacancy, performing better. There’s a definite bifurcation.
Gordon Lamphere: Where do you see the most slowdown by product size? In our market, five thousand square feet and under is absolutely the best, there’s a slowdown around 25,000, and a big gap starts around 100,000. Where are the patterns that help people think about risk allocation by size?
Scott Robinson: There are many ways to carve up the industrial ecosystem. The academic in me likes what NAIOP does with eleven categories, but the world doesn’t function that way. It’s probably three: small-bay flex, sub-75,000 or sub-100,000 square feet; 100,000 to 300,000, maybe 400,000; and larger bulk distribution above that. Another way is tenants per building and average tenant size. Under 100,000 square feet, you’re probably talking four to ten tenants, and smaller as you go down. From both a fundamentals and capital markets point of view, the upper size range is where the slowdown has been. I don’t play much in the sub-100,000 space, but I know there’s a lot more interest there, including at this morning’s symposium. I don’t know whether it’s pushback from overexposure to single-tenant million-square-foot buildings and a desire for tenant diversification, but that diversification is a real benefit. Some owner-operators push back on managing a portfolio with so many tenants. You have shorter WALTs, which I think is good, since you get a quicker mark-to-market, assuming rents are moving the right direction, but it’s more labor-intensive. In the right Sun Belt markets, you have a huge array of tenants to backfill, versus a million-square-foot building in Jersey somewhere. A side note for listeners: research PS Business Parks, ticker PSB, which was bought eight to ten years ago. They were early in flex space when it was under-loved, and they touted that their average tenant was roughly 2,800 square feet. Not investment-grade tenants, but you can backfill, and losing a few doesn’t matter. So you’re seeing more investor appetite for that product. One challenge is deal size. You have to think about capital markets differently: a 50,000-square-foot building won’t attract large pension funds. It’s a more granular capital market, which longer term could result in cap rate compression as it institutionalizes and certain players bulk up portfolios that can be sold into that larger capital market.
Gordon Lamphere: We’ve seen that too. When we put sub-institutional space on the market, 25,000 to 50,000-square-foot multi-tenant buildings, we get a flurry of private equity trying to acquire it, people trying to allocate smaller-size capital away from traditional capital markets. It’ll be fascinating when larger funds get into that space.
Tariffs
Gordon Lamphere: You mentioned more certainty post-election, but one thing I hear about all the time from buyers and sellers is the potential threat of tariffs. How is that playing out in the capital markets, and what do you foresee?
Scott Robinson: Good investors are generally a little more cautious, surveying the landscape and waiting a few minutes before jumping, rather than moving very quickly. You still get an outsized return and generate alpha with a little less risk, and that’s where the landscape is today. There’s no clear answer on what tariffs do, how they flow through the economy and price structures. It’s different for every product, depending on who in the supply chain can do what, where their margins are, and who they sell to. There’s no blanket answer, which may not be a politically happy answer for either side, but it’s reality. So it’s tough to say how it impacts property markets, capital markets, or industrial specifically. I was talking with a manufacturer with operations in Canada and the US, and they can flex production into the US, so it shouldn’t harm their business. Weirdly, that’s one of the academic points of tariffs: bring manufacturing closer to home. But that’s one case. Not everybody can do that, and if you don’t already have capacity here, it takes a long time to move it. You weigh transport costs and tariffs against higher labor costs and the time to get factories running. Harry Moser has an index through his Reshoring Initiative, and over the past ten or twelve years it’s been close to neutral for bringing production in from Asia without tariffs. While we’ve all been talking about reshoring, nearshoring, and onshoring, there’s been a little here and there, moving in the right direction. If tariffs become a definitive, longer-term feature, you’ll see more production come to the US. We’ve seen some in the past four or five years because of supply chain issues, which has benefited Texas and other border markets. So I think it’s a net positive for the US industrial property market. I don’t see the case for a negative impact.
One caveat: earlier this week I spoke with the head of real estate for a large retailer with a couple of big e-commerce bulk facilities. They spent a significant amount modernizing one to reduce exposure to permanently higher US labor costs. They’re investing in technology and infrastructure inside the building, which makes them a stickier tenant if they don’t own it, but it also shows they’re thinking about cost of occupancy. Property owners have been pretty good at saying we’re a small component of an occupier’s expense structure. I’m not sure that’s always true once you look at energy, utility charges, and especially property taxes, and think holistically about the cost of the space. It’s gone up. That doesn’t mean there’s no room for rent growth, but there’s going to be more thinking about the occupier’s total expense. So it’s not a fait accompli that everybody moves manufacturing to the US, but net-net the tariff impact is probably neutral to positive.
E-Commerce and the Last Mile
Gordon Lamphere: One thing that’s likely to keep growing is e-commerce. Go by anybody’s porch in New York, Chicago, or LA and you’ll see an Amazon package. How do you see e-commerce and same-day delivery evolving, from a portfolio perspective and as a professor?
Scott Robinson: E-commerce hit about twenty-three percent of total retail sales last year and is expected to hit twenty-five or more. Those stats speak to where the absorption of the big-box product delivered in the past eighteen months is going to come from. It might take a year and a half, but you see the tailwind over the medium term. But your point is more interesting, because you’re talking about our experience of e-commerce. As somebody who lives in the city, and my students are the same, I care about having it now, not in a few days. Why? I don’t need the toothpaste today; I could go downstairs to CVS. But it’s more convenient, and the supply chain keeps working toward more convenience. From an investor point of view, do I want the million-square-foot bulk facility, or more of that last mile, a phrase I don’t love, and everything related to it from a logistics standpoint? I think I might. But it’s difficult, because now you’re paying up with lower cap rates for infill locations. You theoretically get better rent growth, but at a lower cap rate you’re already paying for a lot of that growth, especially with a longer lease term. I’m not arguing for big box, but you pay for some of that future growth up front. That’s where the focus is going to be; I just don’t know if that’s where you deliver alpha.
Gordon Lamphere: We’re looking with investors at dark stores and retrofitting traditional retail or 1950s and 1960s industrial. Is that a potential advantage, or case by case?
Scott Robinson: Probably case by case, but I really love that segment. There was a group called Fabric that fully automated much of the interior warehouse operation. I toured their facility in the depth of COVID, and we had a great conversation about replicating that as a 3PL in small, call it 10,000-square-foot spaces throughout Manhattan. They’d love to be at Sixth Avenue and 43rd or Broadway and Prince to service that micro-market. They’re displacing the Amazon truck parked on the street with guys walking packages within a three- or five-block radius, which is annoying if you live there. But it’s expensive. They said it doesn’t make economic sense; retail rents would have to come way down. Where you might see it more is embedded in an operator’s own locations, like Amazon and Whole Foods, so they can do both store sales and delivery from the same space. Otherwise retail rents need to adjust dramatically.
Gordon Lamphere: Amazon’s not the only one. Walmart and Target are doing it, and we’ve worked on deals with them.
Energy as a Line Item
Gordon Lamphere: Another factor pushing things is energy prices. How can landlords and investors be more resilient to energy fluctuations?
Scott Robinson: I love that topic. At this morning’s symposium, an intermediary said they’re fundraising for what he called high-tech industrial. I asked, do you mean data centers, or industrial buildings with a lot of robotics and energy utilization? He said the latter, more robotics and automation. So does energy come up? He said it’s a bullet point in the deck. When you get into it, are they talking about the building’s power, the local block, or the municipality’s and state’s regulatory outlook? Definitely just the building level. I get it, but fast-forward a couple of years, five years, and it’s a state and municipal issue far more than a building issue. I’m gathering thoughts around a research project on state-level energy policy, and if any listeners want to support my students on it, I’d love to talk. I’m a big fan of nuclear, especially small-scale, which we’re not at yet but getting there. I want to look at regulatory environments supportive of cheaper energy, because it’s going to be an issue, not just for a given building’s usage but for utilization across the grid and what that does to any user’s cost. It came up in that retailer conversation. How big an issue it becomes, I don’t know.
Gordon Lamphere: We’re looking at potential opportunities around the quantum development on the South Side of Chicago and projects in Lake County that need a tremendous amount of power. How is that playing out for funds and investors? Those corridors have tremendous opportunity but also tremendous capital expenditure.
Scott Robinson: It’s still somewhat theoretical. I don’t think anybody has good ideas yet, so it’s more conversational. But I know an infrastructure investor whose mandate has expanded to include things that smell like real estate to us, and one item he’s focused on is concurrency development. As an infrastructure investor, he wants to build and pay for utilities, electricity, roads, and logistics in support of larger data center, manufacturing, or warehouse development. Not a property-level focus but a municipal focus on holistic infrastructure needs, working hand in hand with real estate. That’s exciting, and there’s obviously an energy component.
Gordon Lamphere: One more before the Final Four. How can investors, landlords, and occupiers future-proof for robotics? We were looking at a building for an e-commerce group and realized the floor wasn’t flat enough. At thirty-two-foot clear with robotics, a flat floor is a necessity.
Scott Robinson: It’s tough, because there’s no single vector in the building ecosystem, investor, developer, or occupier, where automation is the be-all and end-all, and it’s not just automation, it’s AI too. It comes down to the cost of utilizing tech and energy, which I’m starting to treat as one and the same, and creative thinking about what they can do with it. A manufacturer with $150 to $200 million in revenue, what can they afford in high-tech equipment? If it costs millions to buy a piece of equipment, I don’t know if they get an ROI. So I don’t know how much it impacts a lot of the industrial market. It’ll be the larger tenants doing more redundant things, and on the manufacturing side, the million-to-two-million-square-foot pharma and chip facilities, which are completely different beasts. So it circles back to energy and having the most fungible, rectangular space. Maybe thicker flooring becomes more important, but it’s fungible space with good access to energy. On the cost side, I had a conversation last week about finding more FF&E lenders to provide staple financing with a lease package. I’m a landlord offering a lease for X years at X rate; you need significant, often high-tech fit-out; where does that money come from? Maybe the landlord, but if I’m a private equity fund or a smaller group, my cost of capital isn’t necessarily better than yours. So bring in a third party. There’s a space for FF&E lenders to get more creative.
The Final Four
Gordon Lamphere: This podcast is very future driven. First question: where do you see real estate, particularly industrial, going over the next ten years?
Scott Robinson: With my futurist hat on, I’m incredibly bullish on the energy outlook. If we crack the code on small modular reactors, energy costs can get really low, and once that happens, think about everything you can do with AI and LLMs. I don’t know how it plays into physical manufacturing and space utilization, but it has to translate positively. There’s a river to cross to get there, and I don’t know how fast, deep, or cold the water is, but I’m bullish. I also think the real estate participant space has gotten very professional and smart. People like you communicating granular knowledge, more graduate programs, more institutionalization. This conversation wouldn’t have happened fifteen years ago. It’s incremental, but it’s changing how space is capitalized, built, and fit out, and I’m bullish on that too.
Gordon Lamphere: We’re seeing consolidation and a shift. I’m fourth generation, working in the business on and off for about twenty years, and it’s shifted so much in that short time. Twenty to thirty percent of our listeners are on the younger end. What advice would you give someone entering commercial real estate?
Scott Robinson: Pretty much the same advice given to me that I didn’t appreciate at the time: try a lot of different things. Play as many roles as you can early on. Brokerage, leasing, sales. You see and experience a lot more. I didn’t like that answer back then, but what I’ve discovered as a competitive amateur athlete is that you have to focus on the strengths you enjoy to be successful, and you don’t know what you enjoy or what strengths you have until you try different things. Don’t be afraid of being pigeonholed, but have a rationale for each exploratory move, piece them together, and build from it. That’s the power of compounding.
Gordon Lamphere: One way we compound knowledge is books. Is there one related to commercial real estate you’d recommend?
Scott Robinson: I’m not a voracious reader, but I was lecturing over the summer and fall on the history of the REIT structure and vehicle, and somebody recommended Watch That Rat Hole by Ken Campbell, an old hand in the REIT space. The book is hard to find, and it’s not a page-turner. You have to want to learn the history of the REIT structure. But it goes into great detail on the sixties, seventies, and into the eighties: the economy, interest rates, home building, the structure, mortgage lending, and all those relationships. I’m a bit of a nerd, and it was a page-turner for me over the holidays. It’s forty-to-sixty-year-old information, but I found it motivating and found things I can repurpose today.
Gordon Lamphere: Sometimes history is the best predictor of the future in this industry. I’ve been surprised seeing situations in our market echo things from almost a century ago. Last and most important question, the whole reason we started the podcast: who should we talk to next?
Scott Robinson: That one’s hard. At NYU I get to bring in guest speakers all the time, and little nuggets here and there add up to a lot of information. One guest speaker I have often, who has a lot of energy, is incredibly bright, and brings a different, very sharp quantitative lens with a punchy wit: Hunter Hopcroft. Highly recommend him.
Gordon Lamphere: We’d love to have him on. Last question: what’s the best way to get in contact with you?
Scott Robinson: Pretty much any way. Social media is easy: LinkedIn, and I’m on X. You can email me at NYU. I take the time to respond to everything I get, because it’s worthwhile.
Gordon Lamphere: Scott, thank you so much for hopping on, and we’ll have to have you on in the future.
Scott Robinson: Love it, Gordon. Appreciate it.
Gordon Lamphere: Thanks again to Scott. We appreciate his insights. If you enjoyed the podcast, please give us a like, a five-star rating, and a review. Your comments, interactions, and subscriptions truly matter and help us continue to provide quality guests. You can find us on YouTube, Spotify, or wherever you get your podcasts. I’m Gordon Lamphere with the Real Finds Podcast. Thank you for listening.
Van Vlissingen and Co. has been the Midwest’s oldest commercial real estate brokerage, development, and management firm since 1879, and today is independently ranked the #1 commercial real estate agency in Chicagoland, home to the #1 independently ranked agent, Gordon Lamphere, and the region’s #1 ranked commercial property management team. If you own, manage, or invest in energy-adjacent, mixed-use, or transit-oriented property across Lake County, the North Shore, the Northwest and O’Hare corridors, DuPage and the I-88 corridor, Will County, or southern Wisconsin’s Pleasant Prairie, Kenosha, and Racine markets, contact Van Vlissingen and Co. at 📞 847-634-2300 or 🌐 vvco.com. For a market-wide view of where these dynamics sit today, see our State of the Chicagoland Commercial Real Estate Market for Q3 2026.