2026 Industrial Outlook
- BKM Capital Partners
- 1 day ago
- 8 min read
We took the time to ask our Executive Team their thoughts on the upcoming year in addition to their reflections from 2025.
What accomplishment were you most proud of in 2025? How did you achieve those results?
"In 2025, I’m most proud of the meaningful strategic partnerships we secured and the continued strengthening of BKM’s operating platform. These accomplishments position the firm for long-term growth and directly support our multi-year strategic plan. We achieved these results through disciplined execution across the organization, enhancing our financial infrastructure, improving data transparency, and fostering deeper collaboration across departments. The collective effort of our team allowed us to build stronger alignment, sharpen our competitive edge, and reinforce BKM’s foundation for the next phase of expansion."
-Mike Valdes, Senior Managing Director, Finance and Accounting
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"BKM’s national expansion into new markets (Texas, Florida, and Georgia) was a significant accomplishment and important milestone for the company. These high growth markets are poised to continue to expand and benefit from the macroeconomic and population trends that are fueling growth in America. BKM took a long-term perspective to analyzing these markets before making our initial approach to ensure we understood the micro submarkets and tenant drivers to ensure success. BKM grew the team in advance of these acquisitions to ensure local knowledge and expertise so we can provide consistent quality execution across our vertically integrated platform."
-Dave Jensen, Managing Director, Strategic Partnerships
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"In 2025, I’m most proud of how BKM successfully transitioned from a Western-U.S. specialist into a scaled, nationally relevant small-bay logistics operator. We demonstrated that our vertically integrated model—built on disciplined execution, local operating expertise, and rigorous underwriting—can maintain performance while expanding into new geographies.
This was achieved through three key efforts:
Deepening our data and operating systems, particularly the build-out of BKM Intel and portfolio-wide BI dashboards that improved decision-making speed and accuracy.
Strengthening our capital partnerships, including the formation of strategic institutional relationships that position us for long-term growth.
Elevating operational excellence, with measurable gains in tenant satisfaction, absorption, and retention across the portfolio despite macro volatility.
This year validated that our platform is both durable and scalable—and that our team can execute at a high level through complex market conditions."
-Emily Pollard, Senior Director, Marketing and Communications
What concerns do you see becoming pressing issues in 2026 and how will BKM adapt to combat these challenges?
"We are seeing new entrants into the small-bay space, trying to build a position without the infrastructure it takes to operate this product type effectively. Some of these fly-by-night players are bidding up asset pricing to compensate for their lack of experience. BKM is committed to maintaining the same discipline it always has and protecting its track record of success."
-Brett Turner, Senior Managing Director, Acquisitions and Dispositions
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"We had an extremely heavy acquisition year in 2025, so my biggest challenge will be to meet or exceed our first year business plan objectives across these new assets. We also grew our BKM team by over 30 people over the year, so making sure these new hires understand the 'BKM way' is imperative to their first-year success as well."
-Mason Waite, Senior Managing Director, Asset and Portfolio Management
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"In 2026, construction cost volatility and longer lead times will continue to create pressure on project planning and budgeting. These challenges make predictability more difficult for both owners and tenants. BKM will adapt by tightening scopes, standardizing design packages, and leveraging stronger vendor partnerships that allow us to lock pricing earlier. We will also continue refining internal processes that improve transparency and speed, ensuring we stay ahead of delays and maintain competitive delivery timelines."
-C.E. Kaiser, Senior Director, Construction Management
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"My primary concern is scaling the BKM platform at a rapid pace. We have an excellent foundation in place with decades of experience in this product type to help support our expansion into new markets. It will be critical to source and hire new team members that share our unified vision for the company and have the necessary skillsets to develop into the future leaders of BKM. Standardizing our work product across all markets will also be an extremely important process to focus on to help mitigate this challenge."
-Ted Tobiasz, Director, Asset Management
What macroeconomic or policy trends do you think will have the biggest influence on industrial demand next year?
"BKM expects to see interest rates continue to fall, compressing cap rates and enhancing cash yields. Industrial net absorption saw a tremendous third quarter which we expect to continue as business owners adjust to tariffs and American manufacturing continues to thrive."
-Brett Turner, Senior Managing Director, Acquisitions and Dispositions
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"Reduced interest rates should spur growth for small- to medium-sized businesses that benefit from a lower cost of capital and additional access to credit. The buildout of data centers should spur demand for the entire supply chain associated with constructing, powering, and supporting data center expansion."
-Dave Jensen, Managing Director, Strategic Partnerships
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"Moderating interest rates and improving capital markets activity will likely support renewed transaction and development momentum in 2026. Continued investment in reshoring and nearshoring will maintain strong demand for functional industrial space in key logistics markets. Policy incentives that support manufacturing expansion should also reinforce growth. These factors position industrial real estate to remain one of the most resilient asset classes going into next year."
-C.E. Kaiser, Senior Director, Construction Management
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"Several trends will shape demand:
Onshoring and nearshoring continue to drive growth in light manufacturing, trade services, and specialty production—all core small-bay tenants.
Infrastructure and federal investment incentives (IIJA, IRA, CHIPS) will accelerate activity in sectors tied to transportation, energy, and technology.
E-commerce normalization will lead to more stable but still elevated demand for last-mile facilities.
Interest-rate stabilization is expected to unlock pent-up leasing and transaction activity as business owners regain confidence.
Population and business migration patterns continue to shift toward affordable metros with strong workforce availability—aligning directly with BKM’s target markets.
Industrial fundamentals remain resilient, but demand will increasingly favor highly functional, well-located small-bay assets."
-Emily Pollard, Senior Director, Marketing and Communications
What do you predict will be the most important factors for investors going into 2026?
"I think investors will be attracted to operators who have a surer path to returns than a speculative one. Groups who can prove they aren’t relying on the most optimistic and aggressive assumptions where all the stars have to align to hit their target returns will be rewarded for their discipline. We try and approach this through an embedded mark-to-market opportunity on the buy, that we further enhance with our proven capex and operating platform."
-Mason Waite, Senior Managing Director, Asset and Portfolio Management
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"I believe investors are entering 2026 with a sharper focus on risk management and capital efficiency. The factors I see rising to the top include:
Prudent leverage and downside protection, as the industry moves away from the pre-2022 “bond-substitute” mentality.
Manager selection and operational value creation, not just market timing, especially in multi-tenant industrial, where hands-on repositioning drives returns.
Portfolio diversification and durability of income, with investors seeking assets and strategies less sensitive to macro shocks.
Transparent reporting and sustainability-minded operations, which increasingly affect capital flows, particularly among institutional LPs."
-Mike Valdes, Senior Managing Director, Finance and Accounting
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"Investors will be increasingly focused on generating investment alpha to provide differentiated and uncorrelated returns. A key focus will be on operational execution in alternative asset classes with return profiles that exceed that of traditional asset types."
-Dave Jensen, Managing Director, Strategic Partnerships
Which markets are poised for continued growth and success in the coming 12 months based on demographic, economic, and geographic trends?
"I’ve been very happy with our progress YTD in our new markets (Orlando, Houston, and soon-to-be Atlanta). These cities have strong fundamentals that we’re leaning into and I’m optimistic we will be successful. We have fantastic partners on the ground there and new team members who are excited to roll up their sleeves and get to work."
-Mason Waite, Senior Managing Director, Asset and Portfolio Management
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"We are bullish on Texas and Sunbelt markets. We’ve also been heavily active in Northern California with the current AI boom providing a boost to the light industrial real estate market. I am also confident Southern California will begin to rebound in 2026."
-Ted Tobiasz, Director, Asset Management
What piece of technology will play the most vital role in BKM’s operational strategy going forward?
"AI will be a key component for all real estate and will differentiate small-bay operators’ ability to scale. This product type has uniquely numerous data points. Operators who can ingest, analyze, and make decisions quickly will be the clear winners by 2030."
-Brett Turner, Senior Managing Director, Acquisitions and Dispositions
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"Our proprietary operating and investment data across a 15M+ SF portfolio, 3,500+ tenants, and 13+ years of operations—combined with analytics AI tools. This allows BKM to build greater intelligence that can be utilized to deliver enhanced asset management, property management and investment decisions."
-Dave Jensen, Managing Director, Strategic Partnerships
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"Data and workflow automation will be central to how BKM scales efficiently in 2026 and beyond. Tools that streamline construction tracking, portfolio reporting, and vendor communication will help reduce cycle times and improve decision-making. Our ability to consolidate information across departments will create a more consistent operational framework, allowing us to deliver projects faster and with greater accuracy. This will directly support both asset performance and tenant satisfaction."
-C.E. Kaiser, Senior Director, Construction Management
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"AI-enabled portfolio intelligence will be the most vital component of our strategy. Through BKM Intel and integrated BI platforms, we can:
Predict tenant renewals and retention risk
Model real-time mark-to-market and leasing velocity
Optimize capital expenditures for maximum ROI
Automate reporting, underwriting, and asset-level workflows
Provide institutional-grade transparency to partners
This technology creates a faster, more precise operating loop—exactly what is required when scaling a multi-market platform and managing thousands of small tenants."
-Emily Pollard, Senior Director, Marketing and Communications
What are your goals for BKM in 2026? What would you like to see accomplished?
"We’ve entered several new markets in 2025, so my goal for 2026 is to make sure the BKM brand is well received in those locations. That involves everything from our day-to-day vendors, to our brokerage partners, and ultimately our tenants and investors."
-Mason Waite, Senior Managing Director, Asset and Portfolio Management
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"My goals for 2026 center on continuing to position BKM for long-term scalability by expanding our strategic partnerships, exceeding our capital deployment targets, and elevating operational excellence through technology and data.
Deepen operational excellence across the platform, from property-level data pipelines to corporate finance processes, to ensure we continue operating as a best-in-class institutional manager.
Expand strategic partnerships that strengthen our capital base, enhance our sourcing and operating capabilities, and support BKM’s long-term growth strategy.
Enhance financial reporting and forecasting capabilities by further integrating technology, improving data transparency, and strengthening our budgeting, portfolio analytics, and investor-reporting processes.
Ultimately, 2026 should be a year of thoughtful expansion, scaling our platform while maintaining the discipline and focus that has defined BKM since inception."
-Mike Valdes, Senior Managing Director, Finance and Accounting
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"In 2026, my focus is on strengthening construction efficiency across the portfolio by expanding standardized scopes and tools that support consistent execution. I would like to see further integration between property management, construction, and asset management to improve project visibility and speed. Another key goal is scaling our internal resources in markets where activity continues to grow, ensuring we maintain quality and responsiveness. Ultimately, I want our team to deliver projects faster, reduce cost variability, and create a clearer path to portfolio-wide operational improvements."
-C.E. Kaiser, Senior Director, Construction Management
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"My goals for BKM in 2026 include:
Expanding our national footprint with discipline, focusing on markets that support long-term operating efficiency and tenant resilience.
Raising institutional visibility, positioning BKM as the clear leader in small-bay logistics nationwide.
Expanding our data, AI, and BI capabilities to deliver faster insights, smarter decision-making, and a sustained competitive edge in sourcing, operations, and asset management.
Continuing to elevate tenant experience, driving higher retention, lower downtime, and sustainable NOI growth.
Strengthening our people and culture, ensuring we maintain a high-performance, values-driven team as we scale.
Ultimately, success in 2026 means demonstrating that BKM can grow rapidly while maintaining the precision, consistency, and operational excellence that define our brand."
-Emily Pollard, Senior Director, Marketing and Communications
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"Our goal is to double our AUM by the end of 2026 while continuing to deliver the outstanding performance our investors have come to expect out of BKM. Onboarding new asset and leasing managers and leaning on our incredible team’s experience will be paramount in achieving these goals."
-Ted Tobiasz, Director, Asset Management
