Core concepts
Operations simplicity
Minimal tenant interaction; web-based management increasingly standard.
Compounding rates
Existing tenant rate increases (ECRI) deliver above-market rent growth.
Examples
- 50,000sqft facility at $1.20/sqft generating $720k revenue, 50%+ NOI margin.
Practical applications
- Operators seeking inflation hedge.
- Conversion of existing flex space.
Common mistakes
- Overbuilding into saturated markets.
- Ignoring climate-controlled vs drive-up mix.
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