At Phoenix Industrial Redevelopment (PIR), we’ve spent years studying the forces driving the resurgence of U.S. manufacturing. We’ve seen firsthand how advanced technologies and changing global economic conditions are fueling a wave of reshoring and domestic production growth. And we’ve identified what we believe is one of the most compelling opportunities in the industrial real estate market today: multi-tenant properties that cater to the needs of small and midsize manufacturers.
If you’re an accredited investor looking to capitalize on the exciting changes happening in U.S. manufacturing, we believe our FixedFunds Program® offers a unique way to gain exposure to this opportunity. In this post, we’ll share our perspective on why we focus on multi-tenant industrial properties and how our investment strategy is designed to create value for our investors while supporting the growth of this vital segment of the economy.
The Rise of Small Manufacturing
When most people think of manufacturing, they often picture sprawling factories churning out cars, appliances, or other large consumer goods. But the reality is that the vast majority of manufacturers in the U.S. are small and midsize enterprises (SMEs). According to the National Association of Manufacturers, SMEs account for nearly 99% of all manufacturing firms in the country and employ almost half of the manufacturing workforce.
These smaller manufacturers play a critical role in the industrial ecosystem. They are the specialized suppliers, contract manufacturers, and service providers that form the backbone of many supply chains. They are the innovators and problem-solvers that help larger companies bring new products to market quickly and efficiently. And they are the job creators and community builders that drive economic growth in regions across the country.
In recent years, the role of SMEs in the manufacturing landscape has only grown in importance. As large companies have looked to streamline their operations and focus on their core competencies, they’ve increasingly relied on networks of smaller suppliers to provide the specialized components, materials, and services they need. This has created a virtuous cycle of growth, as SMEs have expanded to meet the needs of their larger customers, creating new jobs and driving innovation in the process.
The COVID-19 pandemic has only accelerated these trends. The disruptions to global supply chains caused by the pandemic have highlighted the risks of overreliance on overseas production and the importance of having more localized, resilient supply chains. This has led many companies to reevaluate their manufacturing strategies and look for ways to bring production closer to home. For SMEs, this represents a significant opportunity to capture new business and grow their operations.
The Workspace Challenge
But for small manufacturers to thrive in this new environment, they need access to the right kind of space. They need facilities that are affordable, flexible, and well-located. They need spaces that can accommodate their unique production requirements and support their growth over time. And they need properties that offer the amenities and services that can help them attract and retain skilled workers in an increasingly competitive labor market.
This is where multi-tenant industrial properties come in. These properties, which typically range in size from 20,000 to 100,000 square feet, are designed to accommodate multiple smaller tenants in a single building or complex. They offer a range of space options, from 1,000 to 5,000 square feet, that can be easily customized to meet the specific needs of each tenant. And they provide amenities like loading docks, ample parking, and modern office spaces that can help tenants operate more efficiently and cost-effectively.
For small manufacturers, these properties offer a number of compelling benefits. They provide the flexibility to scale up or down as business needs change, without the long-term commitments and capital expenditures associated with owning or leasing a standalone facility. They offer access to a community of like-minded businesses that can provide opportunities for collaboration, resource sharing, and supply chain integration. And they are often located in established industrial areas with strong transportation networks and proximity to customers and suppliers.
The PIR Approach
At PIR, we’ve built our investment strategy around acquiring and repositioning multi-tenant industrial properties that cater to the needs of small and midsize manufacturers. We focus on properties in the 20,000 to 100,000 square foot range in select markets across the country that have strong manufacturing ecosystems and robust demand drivers. We look for properties that are well-located, functionally obsolete, and in need of capital improvements that can unlock value for tenants and investors alike.
Our value-add approach involves making targeted investments in these properties to enhance their appeal to small manufacturing tenants. This could include upgrading building systems, improving site layout and accessibility, and adding modern amenities like high-speed internet. By creating spaces that are tailored to the unique needs of small manufacturers, we believe we can attract and retain high-quality tenants and drive long-term cash flow and appreciation.
But our approach goes beyond just physical improvements. We also take a hands-on approach to property management and leasing, with a focus on building long-term relationships with our tenants. We work closely with our tenants to understand their business needs and help them navigate the challenges and opportunities of the current manufacturing landscape. We strive to create a sense of community within our properties, with events and programming designed to foster collaboration and knowledge sharing among tenants.
The FixedFunds Program Opportunity
For accredited investors, our FixedFunds Program® offers a unique way to participate in the potential of our multi-tenant industrial strategy. Through the FixedFunds Program, investors can gain exposure to a diversified portfolio of properties that are strategically positioned to benefit from the growth of small and midsize manufacturing, while enjoying the stability of fixed returns.
The FixedFunds Program offers two investment options:
- Income Notes: 8% annual return, paid monthly
- Growth Notes: 8% annual return, compounded monthly
Both options have a 5-year term with a 2-year extension option and a minimum investment of $50,000. This structure provides investors with either a reliable stream of monthly income or the potential for compounded growth, depending on their financial goals.
But the FixedFunds Program is about more than just financial returns. It’s also about supporting the growth of a vital segment of the U.S. economy and driving positive change in communities across the country. By investing in the spaces that small manufacturers need to thrive, we believe we can help create jobs, spur innovation, and contribute to a more resilient and sustainable economic future.
We are excited about the opportunities ahead in the multi-tenant industrial space and we believe our focus on small and midsize manufacturers sets us apart in the market. If you share our passion for U.S. manufacturing and are looking for a unique investment opportunity with the potential for attractive fixed returns and meaningful impact, we encourage you to learn more about the PIR FixedFunds Program®.
