The Rise of Industrial and NNN
Fueled by the explosive growth of e-commerce, industrial real estate has been thriving for years, and 2022 is set to be another record-breaking year for the sector. According to NAIOP, a staggering total of 401.4 million square feet of industrial space is forecasted to be absorbed this year. Pandemic-era trends like the e-commerce boom and the switch to remote work have caused already strong demand to skyrocket, and even as supply chain bottlenecks eventually subside, the overarching market trends that have driven industrial success are here to stay.
As more and more players enter the thriving sector, there is a growing need for purpose-built technology solutions that support the management of industrial properties. Particularly complex are the net-leasing structures that dominate the industrial sector; because most maintenance items are ostensibly managed by tenants, owners and asset managers of NNN facilities have extremely limited visibility into the upkeep and day to day condition of their properties.
Bridging the Gap Between Owners and Tenants
As the industrial asset class continues to overperform and attract mass amounts of capital, RET Ventures has kept its pulse on the quickly evolving market. We are constantly on the lookout for emerging solutions that address common friction points felt across the industry, which led us to our most recent investment in Fyxt.
A cloud-based commercial real estate platform supporting the management and operation of commercial properties, Fyxt is uniquely capable of bridging the disconnect between NNN owners, managers, tenants, and service providers. The platform facilitates increased transparency surrounding building performance by allowing all stakeholders to efficiently communicate through one system – eliminating the frequent confusion often felt by NNN owners with limited visibility into building maintenance.
By building the platform from the bottom up to digitize lease contracts and integrate with accounting, data visualization, vendor compliance, and insurance software, Fyxt streamlines operations dramatically, allowing warehouse owners and operators to efficiently run true capital cost analyses and manage operations through a NNN lens.
Although we typically focus on value-add investments for the single and multifamily space, RET always seeks to identify solutions that make an impact on the real estate industry as a whole. Fyxt’s ability to solve a real problem for the industry — and the ease of use it provides landlords, tenants, and vendors — has driven the company’s significant traction, and, and we consider Fyxt a natural addition to the RET portfolio of companies.
While the proliferation of NNN industrial assets — and national portfolios — has made Fyxt a valuable tool for operators of warehouses and logistics facilities, the technology transcends the industrial sector. The pain points felt by these industrial owners mirror those of NNN operators of healthcare, retail, office and other historically net-lease asset classes, and, with features like a vendor procurement platform, Fyxt can benefit stakeholders in any lease structure.
The Future of NNN Asset Management
Many of the macroeconomic tailwinds that support multifamily are bolstering the industrial asset class as well, causing increased attention and capital to flow into the market. Fyxt’s ability to modernize NNN asset management and increase line of sight into operations for warehouse owners with national portfolios will be extremely beneficial as the market continues to grow.
As energy costs rise and ESG mandates grow more prevalent across a growing number of markets, portfolio visibility has never been more imperative for property owners. Fyxt’s ability to address this need has already streamlined operations for its early clients. As the company refines its integration strategy and partners with more NNN owners, it will continue to play an outsized role in helping landlords address operational inefficiencies enabling better tenant experience and increased NOIs.