Building Relationships in a Shifting Industrial Market

Written by:

Steve Marcinuk

Date:

23 Sep 2025

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The commercial real estate landscape has changed over the past year, with industrial properties emerging as a bright spot amid broader market uncertainty. While institutional capital has largely remained on the sidelines, local investors with ready capital are finding opportunities in select asset classes, particularly small bay industrial flex and outdoor storage facilities.

Matthew Antonis, Commercial Salesperson at Friend Commercial Real Estate, has witnessed this evolution firsthand. Operating primarily in the DC, Maryland, and Virginia markets, Antonis has built his practice around a client-first approach that has yielded consistent results even as market conditions have shifted.

“I’m noticing a lot more product coming on the market, especially in the industrial space,” Antonis observes. “That being said, for industrial outdoor storage and small bay flex, if I had it right now, I’d feel like I have a handful of buyers to send it to.”

The Appeal of Small Bay Industrial

The strong demand for small bay industrial and outdoor storage reflects several market fundamentals that have remained steady despite economic headwinds. These asset types offer investors attractive characteristics that align with current market preferences.

“It comes back to supply and demand, there’s just not a lot of that product available, and there’s still a need for it,” Antonis explains. “For an investor, it’s a very attractive asset because there’s not a lot of maintenance. It’s very low fuss. It’s triple net, single user tenant. If you can secure that property and secure the ideal tenant, it’s just a perfect situation.”

This combination of limited supply and strong fundamentals has created opportunities for creative deal structuring. In one recent example, Antonis worked on repositioning an underperforming small bay flex property by restructuring lease terms and improving tenant quality, ultimately enabling a successful sale at a higher valuation.

Local Capital Drives Activity

While much attention has focused on institutional investors sitting on the sidelines, local and regional players continue to drive transaction activity in the mid-Atlantic industrial market. These buyers bring advantages that have become increasingly valuable.

“Most of the clients I work with are local and well-capitalized, looking for deals, but they’re very smart and patient,” Antonis notes. “When the right opportunities come along, they can make quick moves because they have the capital ready to go.”

This dynamic has created a two-tier market. The ability to move quickly and make decisions locally has proven particularly valuable for off-market transactions, which have become an increasingly important part of the deal flow.

Off-Market Opportunities Emerge

The shift toward off-market transactions reflects both market conditions and relationship-driven business practices. Rather than relying solely on broadly marketed listings, successful brokers are finding value in connecting specific buyers with specific opportunities based on deep knowledge of client needs.

“Some of the best deals I have under contract right now are off market,” Antonis explains. “They’re unique, they’re nuanced, a little more difficult to wrap your arms around, but definitely for sellers and buyers, there’s advantages.”

This approach requires consistent relationship building and market knowledge. Success comes from understanding client portfolios, family dynamics, and long-term strategies rather than simply matching buyers to available listings.

Pricing Reality and Deal Structure

Market participants are gradually adjusting expectations to reflect current interest rate and financing environments. While some sellers initially maintained pre-2022 pricing expectations, successful transactions increasingly require realistic pricing and creative structuring.

“If people are willing to accommodate the market and the interest rates and have a reasonable ask on the price, you’ll get deals done,” Antonis observes. “There was a little bit of higher expectation for so long, but they’re starting to come together.”

This adjustment has created opportunities for buyers who can move quickly and for sellers who price properties appropriately. The key has been finding the intersection between buyer capabilities and seller expectations in a higher interest rate environment.

Operational Focus Amid Market Noise

While market reports and economic forecasts generate attention, successful practitioners are focusing on controllable factors rather than external market forces. This operational approach emphasizes consistent prospecting, relationship building, and creative problem-solving over market timing.

“One day it’s a good outlook, the next day it’s tragic,” Antonis says. “But I focus on what’s in front of me—my routine, how I dial in my prospecting, having conversations. No matter if interest rates are super low or super high, we’re still creatively getting deals done.”

This philosophy extends to the broader approach at Friend Commercial Real Estate, where the emphasis is on direct communication and proactive deal-making. As the firm’s leadership puts it, success comes from “constant communication, just talking about it, making calls, being proactive.”

Looking Forward

The industrial market’s resilience, particularly in small bay flex and outdoor storage, suggests these asset classes will continue attracting investor interest. The combination of limited supply, operational simplicity, and steady demand fundamentals provides a foundation for continued activity.

For market participants, the current environment rewards relationship-driven approaches, realistic pricing, and operational focus over market timing. Local investors with ready capital and the ability to move quickly are finding opportunities, while brokers who emphasize client relationships and creative deal structuring are successfully navigating the shifting landscape.

The key appears to be maintaining focus on fundamentals, supply and demand dynamics, client needs, and operational execution, rather than getting caught up in broader market volatility. In an environment where institutional capital remains cautious, this approach is creating opportunities for those willing to do the work of building relationships and understanding local market dynamics.