Investor's Strategic Pivot to Industrial Real Estate Captures America's Manufacturing Resurgence

Industrial real estate has transformed from a niche sector to a mainstream investment opportunity over the past two decades, becoming one of the most competitive areas in commercial property. David Ebrahimzadeh, President and Founder of Corniche Capital, has strategically navigated this evolution by shifting his focus from multifamily properties to industrial real estate, positioning himself to benefit from the sector's dramatic growth. His journey illustrates how identifying undervalued assets and adapting to market shifts can create significant investment opportunities.

Ebrahimzadeh initially built his portfolio with B- and C-class multifamily buildings in New York and northern New Jersey, accumulating more than 1,000 units. However, by 2006–2007, he found the management requirements too intensive and began seeking alternative real estate investments. Around 2010, he turned his attention to industrial properties, which were largely overlooked by mainstream investors at the time. This neglect created substantial opportunities for those willing to explore non-traditional asset classes. Ebrahimzadeh recognized significant pricing disparities, noting he could purchase industrial buildings with credit tenants at 10 to 12 cap rates for less than the land value alone, describing industrial real estate as "the ugly duckling of real estate" during that period.

The COVID-19 pandemic marked a pivotal moment for industrial real estate, as e-commerce expansion and supply chain concerns brought mainstream attention and increased capital to the sector. Ebrahimzadeh observed that this heightened interest drove up prices and compressed cap rates, making value-add acquisitions more challenging for individual investors. This competitive environment forced him to adapt his strategy, shifting from acquisitions to development projects. He now focuses on land acquisition in secondary markets where pricing still allows for profitable development, moving away from traditional East Coast markets due to their slow and bureaucratic permitting processes.

Ebrahimzadeh's current development strategy prioritizes markets with efficient permitting and supportive regulatory environments, particularly New Mexico, Texas, and South Carolina. New Mexico stands out for its pro-business approach and economic incentives, with the state's economic development authority offering incentive, abatement, and grant packages to companies establishing manufacturing or distribution facilities. The permitting process in New Mexico is notably efficient, with site plan approval often obtained quickly and permits frequently issued within 30 days for projects not requiring variances, which Ebrahimzadeh describes as "probably one of the best turnaround times in the country."

This strategic focus aligns with the resurgence in U.S. manufacturing driven by federal policies and supply chain concerns. Ebrahimzadeh notes that demand for manufacturing space now surpasses distribution demand in his active markets, with manufacturing tenants driving most leasing activity. This shift reflects broader economic changes as companies seek to relocate or expand production within the United States, creating heightened demand for industrial properties that support manufacturing operations. While industrial development remains his primary focus, Ebrahimzadeh has also encountered unexpected opportunities in the data center sector through properties positioned for large-scale power access, such as a site in Belen, New Mexico capable of securing several hundred megawatts of dedicated power, scalable to 600 megawatts.

Looking forward, Ebrahimzadeh is expanding his New Mexico operations to include large-scale mixed-use developments, planning master-planned communities of 1,000 acres or more in Los Lunas to address housing needs while creating integrated communities that serve workers attracted by new manufacturing and distribution jobs. His investment journey highlights the importance of recognizing overlooked sectors early, adapting to new market realities, and maintaining geographic flexibility. With American manufacturing on the rise and supply chain priorities shifting, industrial real estate remains a key area for growth, demonstrating that the ability to spot value, act decisively, and adapt strategies to new conditions remains essential for success in commercial real estate.