Acquisition focus
Small-bay industrial. Boring buildings that pay every month.
Residential renovation produces large one-time gains. Industrial does the opposite job: it pays every month, holds value through cycles, and carries tax treatment that residential flipping does not. I am acquiring 10,000 to 50,000 square foot industrial buildings in metro Phoenix to build a portfolio that compounds into long-term wealth rather than a series of individual wins — and I have already worked this asset class from the brokerage and construction sides before putting my own capital into it. The same filter applies here as everywhere else: I look at a great many buildings and expect to buy very few of them.
Thesis
Why this asset class, and why here
I have worked this asset class from both sides
I am a licensed agent and have represented warehouse sales, which means I have sat in these negotiations and watched how industrial deals get priced, argued over, and killed. I have also performed tenant improvement work on commercial buildings — the office build-outs, power, and door work that decide whether a space leases at all. I am not entering a new asset class. I am buying into one I have already been paid to understand.
Phoenix is absorbing industrial demand
The Valley has spent the last decade converting from a housing economy into a manufacturing, logistics, and distribution economy. Semiconductor, battery, and advanced manufacturing investment brings suppliers, contractors, and service businesses with it — and every one of them needs a building.
The small-bay segment is underserved
Institutional capital chases big-box distribution above 100,000 square feet. The 10,000 to 50,000 square foot range is where local contractors, fabricators, suppliers, and trade businesses actually operate, and it is chronically under-built. That is a supply-demand gap, and it is too small for the large funds to bother with.
Large buildings are often worth more divided
A single 40,000 square foot building serving one tenant frequently produces less income, and carries more risk, than the same building demised into four or five smaller bays. Small-bay space commands higher rent per foot, draws from a far deeper tenant pool, and spreads vacancy risk across several leases instead of concentrating it in one. Executing that conversion is a construction problem — demising walls, power, plumbing, separate entries and doors — which is precisely the work I already do.
I can improve the buildings myself
Most of the value-add in small-bay industrial is physical: office build-out, dock and grade-level door work, power upgrades, yard and parking improvements, roof and mechanical. I own a construction business and build this work myself. The crews I use are on my projects daily, which earns preferential pricing and preferential scheduling — tenant improvements get delivered economically and fast, and a space that is ready sooner starts paying sooner.
The tax treatment is favorable
Income-producing commercial real estate carries depreciation benefits that can shelter a meaningful portion of the cash it produces, and cost segregation studies can accelerate that treatment. Exchanges under Section 1031 can defer gain on disposition. How any of this applies depends entirely on your own situation, so treat it as a reason to talk to your CPA rather than as advice from me.
Buy box
What I am looking for
A defined buy box is how you avoid buying the wrong building because it was available. These are the parameters I screen against.
Single tenant or multi-bay. Divisible is a plus.
Established industrial corridors with freeway access and a labor draw.
Adequate clear height, power, and truck access. Cosmetics I can fix.
Deferred maintenance, below-market rents, vacancy, or a plan worth redrawing.
Fenced yard and parking are increasingly scarce and increasingly valuable.
Trades, suppliers, fabricators, service businesses with real balance sheets.
Bought to own and operate, not to trade.
On-market distress and stale listings count as much as off-market outreach.
If you own a building that fits this description, I am a direct buyer — reach me at colby@colbil.com.
If you have been interested in investing in real estate
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