In the fallout of the global financial crisis, commercial real estate experienced highly distressed capital markets and depressed leasing demand. With sidelined capital, no meaningful new supply being built, and quality assets available at steep discounts, the Comunale team capitalized on this unique opportunity by acquiring corporate excess real estate, asset notes, and buildings at auction. The key to this strategy was a patient, long-term approach combined with conviction behind the industrial market’s rebound, enabling excellent returns upon market re-stabilization.

As the industrial market began recovering from the financial crisis, the capital markets remained largely illiquid despite a backdrop of recovering businesses and growing tenant demand. At this stage, many unsophisticated owners did not see value in their increasingly in-demand assets, creating an environment for the team to aggregate a light industrial portfolio via value-add acquisitions, acquiring quality, well-located, highly functional assets that required leasing expertise or minor capital improvements to achieve strong investor returns.

With economic recovery in full swing, capital markets activity heightened while available industrial supply diminished. This inflated existing asset pricing, greatly decreasing the investor returns spread between buying core assets and value-add assets. With high acquisition pricing, tenant demand rapidly growing, and limited supply availability, the Comunale team believed the market was ripe for significant rent growth and identified speculative development as an excellent strategy for achieving strong risk-adjusted returns. As such, the team developed eight Class A buildings in three metro areas, outperforming underwriting in all projects. During this development strategy, the platform also sought selective acquisitions that were available below replacement cost and in high-density submarkets.