Look around you. What are you sitting on? What are you holding in your hand? Odds are, unless you are holding your cat, it was once in a warehouse. So what exactly is a warehouse? A warehouse is a building made for shipping, manufacturing, and logistics. My name is Aviva Sonenreich and I run a large portfolio of warehouses in Colorado. We have tenants that range from gyms to blanket companies to construction contractors.
My family came to America in 1950. They lived comfortably in Poland until Hilter’s reign. After the terror of Nazi Germany took the lives they once knew and that of their family members, my grandparents found themselves in a displaced persons camp. After two years they were placed for the final time, in Denver, Colorado.
With $40 in my grandparent’s pocket, they came to America to find a new life for themselves and for their family’s future. After years of just scraping by, my grandfather bought his first duplex, 1425 Julian St. My family lived in one side and rented out the other. A few years later they bought their next duplex and although it was humble, my family’s real estate portfolio was born. The duplexes soon became motels in seedy neighborhoods, housing truck drivers and transparent somebodies passing through.
In 1984 my grandfather bought his first warehouse. Little did he know, this fateful transaction would change the course of history to my family, once again.
Between 1984 – 2009 the warehouse market in the United States was less than glamorous. Rental rates were small but slow and steady. The late 2000s were a difficult time for Americans but little did we know, everything was about to change. Simultaneously, e-commerce was on the rise. Mom and Pop websites like eBay and Amazon started to infiltrate our culture, providing a value to society that was unimaginable by most. In conjunction with e-commerce, emerging industries like computer systems and medicinal cannabis only propelled the change forward expeditiously.
With such drastic changes in the landscape of our economy, the real estate industry could not conceptualize the changes that we were about to see.
Cue January 1st, 2014 as Colorado’s Amendment 64 was passed, unleashing a soon to be a billion-dollar industry in Colorado. The recreational legalization of Cannabis was a basic lesson in economics in and of itself. Demand skyrocketed, supply was low and prices reflected such. Vacancies dropped to historic lows and rental rates soared.
Industrial facilities, once seen as the stepchild of commercial real estate started to garner respect. But it wasn’t just the Cannabis industry to thank for the massive shift in the industrial real estate industry. Brick and mortar stores sought refuge from high retail storefront prices behind websites and warehouses and the results were a success.
The shift was colossal. Then came 2020. The Covid-19 pandemic effortlessly pushed the industrial market 10 years into the future. The global pandemic pushed the e-commerce market forward at a pace most companies could have never imagined.
And just like that, the investment landscape of our generation has shifted. Industrial real estate, once the ugly stepchild of real estate is now the favorite child. Real estate investors worldwide are seeking industrial investments and the market is adjusting accordingly.
We never sold the warehouse my grandfather bought in 1984 and I still lease and manage it to this day. The legacy I feel walking the ground he once walked is palpable. The sense of pride is unreal. It’s like he knew what the future held. Industrial real estate.