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Naturally Splendid Reports Second Quarter Results for 2021

Naturally Splendid Enterprises Ltd. (“Naturally Splendid“, “NSE” or “the Company”) (FSE:50N)(TSXV:NSP)(OTC PINK:NSPDF) announces its unaudited financial results for the six months ended June 30, 2021. All amounts are in Canadian dollars and…

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Naturally Splendid Enterprises Ltd. (“Naturally Splendid“, “NSE” or “the Company”) (FSE:50N)(TSXV:NSP)(OTC PINK:NSPDF) announces its unaudited financial results for the six months ended June 30, 2021. All amounts are in Canadian dollars and are prepared in accordance with International Financial Reporting Standards

Company CEO Mr. J. Craig Goodwin reports, “The Company continues to execute on our strategic plan developing, manufacturing and distributing plant-based, meat alternative entrees as well as plant-based health and wellness products. We have made significant progress focusing on our NATERATM Plant Based Foods in particular. In this regard, I am pleased to report that we have achieved several significant milestones including securing a ten (10) year exclusive manufacturing and distribution agreement with Australia’s largest plant-based food manufacturer and a Canada-wide launch of selected NATERATM plant-based entrees with Denny’s Restaurants.

The move to manufacturing NATERATM Plant Based Foods in Canada has many advantages. Most notably a significant reduction in cost of goods produced, thus creating additional food service and retail opportunities, as well as increased margins. We will leverage our existing Safe Quality Food (SQF) certified manufacturing facility to produce these popular and delicious plant-based appetizers and entrees here in BC.

Utilizing our existing manufacturing facility by adding additional production lines in has many advantages inherently built in. Advantages includes greatly reduced capital costs building out a manufacturing facility when compared to building out a completely new facility. Having an experienced production team, familiar with advanced SOPs related in part to certifications such as Safe Quality Food (SQF), also brings many advantages and built in efficiencies.

We are thrilled to launch selected NATERATM plant-based products with the iconic Denny’s Restaurant brand across Canada, as well as Bar One restaurants in Western Canada. The acceptance of our NATERATM products in such a recognizable restaurant as Denny’s is validation of the popularity of our plant-based entrees.

The Company has chosen to reduce its contract manufacturing clientele for bars and bites, which in the short term has affected gross sales, in order to focus on growing the NATERATM Plant Based Foods line. Instead, the Company has put more emphasis on producing our own Company Brands that have greater margins, including NATERATM Plant based Foods.”

Q2 Operational Highlights
10 Year Exclusive Manufacturing and Distributing Agreement With Australia’s Largest Plant-Based Manufacturer
Naturally Splendid has already begun the process of retrofitting its existing Safe Quality Food (SQF) Certified food manufacturing facility. This facility will manufacture a wide range of plant-based alternatives for beef, chicken, pork, fish and shellfish under the guidance of Flexitarian Foods.

NATERATM Plant-Based Entrees Launched at Denny’s Restaurants across Canada
Following this past summer’s menu test of NATERATM products at five (5) Denny’s Restaurants in B.C., guests can look forward to enjoying NATERATM Seasoned Chick-Un Tenders and NATERATM Chick-Un Nuggets at seventy-one (71) Denny’s across Canada starting later this fall. Naturally Splendid is also excited to announce that Bar One, a restaurant under the Denny’s Canada brand, will be offering these same NATERATM plant-based, meat-alternative entrees at all thirteen (13) locations in B.C. and Alberta.

Expanding Distribution Network
A comprehensive distribution network that covers Canada coast to coast has been established. Distributors include CANEX Foods, Sysco, Gordon Food Service, Intercity Packers Meat and Seafood, Georgia Main Food Group, and others. Distributors have been selected for market coverage in retail and food service as well as in regard to geographical coverage.

Naturally Splendid Purchases Packaging Line
Purchase of a state of the art, automated system capable of packaging a wide variety of food products in multiple formats. This packaging system was selected for the array of products and packaging types it is designed to process and will be an integral component to packaging NATERATM Plant Based Foods. This enhanced capability provides the ability to take an already extensive line of products, and through additional packaging options, increase the range of finished goods for retail and food service distribution opportunities.

CavaltinibTM – Health Canada Approved Clinical Trial for COVID-19 Treatment
The clinical trial will be run through Plasm Pharmaceutical, a Joint Venture with Biologic Pharmamedical and Naturally Splendid. Cavaltinib™ has been identified by Health Canada as a drug candidate for the treatment of COVID-19.

CavaltinibTM is the result of over 15 years of research and development that has led to published medical findings and patented technology.

Despite the vaccine successes, infection rates are still on the rise in many regions demonstrating the pandemic is not yet over. Reports indicate the health risk, due in large part to the escalation of variants, is still considered a high alert problem. Treatment options such as Cavaltinib™ will be required as the COVID-19 virus evolves through its inevitable mutations.

Containers of Hemp for South Korea
Naturally Splendid was one of the early movers in the hemp opportunity in South Korea, going back as far as 2016. The relationships forged at that time are paying dividends now with increased orders for hulled hemp seed. These established relationships provide an opportunity to present additional plant-based products for their consideration as well.

Q2 2021 financial overview:
Naturally Splendid recorded a net loss and comprehensive loss of $1,750,988 for the six months ended June 30, 2021, compared to a net loss of $2,428,944 during the six months ended June 30, 2020. The decrease in net loss and comprehensive loss was attributed was attributed to the decrease in selling and distribution expenses. Gross profit margins increased by 5% of sales in the six months ended June 30, 2021, compared to the six months ended June 30, 2020, this is predominately due to the increased profit margins in the new plant-based sales. The Company’s sales decreased by approximately $556,000 from the comparative period. During the six-month period ended June 30, 2021, selling and distribution expense decreased by approximately $426,000 largely due to decreased in production (facility costs, quality assurance and lab testing) and production wages which were offset by the government wage subsidy received during the quarter. Administrative expenses decreased by approximately $294,000 predominantly from office, rent and salaries and corporate promotions. The decrease was attributed to a reduction in investor relations activity due to the pandemic and the reduction of corporate salaries from the government wage subsidy.

Naturally Splendid recorded sales of $470,039 during the six months ended June 30, 2021, compared to $1,025,636 in for six months ended June 30, 2020. The Company’s sales decreased by approximately $556,000 from the comparative period. The Company had decreased sales in its private label bars and bites business by approximately $527,000 and other branded products decreased by approximately $41,000. Branded hemp products decreased by approximately $27,000 and its new Natera Sport products decreased by approximately $64,000. The Company’s new Plant-based products had sales of approximately $74,000 during the quarter ended June 30, 2021. During the six months period ended June 30, 2021, the new Plant-based product sales were approximately $103,000.

Cost of Sales during the six months ended June 30, 2021 and 2020 were $394,812 and $913,074 respectively. The Company gross margin percentage is 16% of sales, during the six months ended June 30, 2021.

The Company continued its sales mix with exports of bulk seed and launching its new plant-based products. The bulk hemp seeds sold at a lower gross margin percentage then compared to the plant-based products and private label sales. The Company is now focused on its higher margin products and new commercial opportunities. Gross profits for the six months ended June 30, 2021, was $75,227 (16% of sales) compared to $112,562 (11% of sales) for six months ended June 30, 2020. The best market opportunities for NSE have been both domestic and new international destinations along with Prosnack Natural Foods Inc. private label products.

For the Three Months Ended June 30, 2021 For the Three Months Ended June 30, 2020 For the Six Months Ended June 30, 2020 For the Six Months Ended June 30, 2020
$ $ $ $
Statements of Loss Data
Revenue
216,661 305,381 470,039 1,025,636
Cost of sales
173,225 319,448 394,812 913,074
Gross Profit
43,436 (14,067) 75,227 112,562
Selling and distribution expenses
(288,502) (251,057) (428,668) (855,478)
Administrative expenses
(756,132) (848,279) (1,403,685) (1,697,707)
Other income(loss) and taxes
(1,007,352) (1,108,183) (1,750,988) (2,428,944)
Net income (loss)
(1,007,352) (1,108,183) (1,750,988) (2,428,944)
Basic and Diluted Earnings (Loss)
Per Share (0.00) (0.01) (0.01) (0.02)

Company Co-founder and CFO Mr. Bryan Carson states, “Naturally Splendid continues to focus on plant-based initiatives. Whether we are developing our NATERATM Plant Based Foods business, or manufacturing bars and bites formulated for the sports and active lifestyle market, advancing the science of CavaltinibTM, for a phase 2 clinical trial for a COVID treatment, or exporting bulk hemp to South Korea, one thing we can assure you is that plant-based is at the forefront of these activities. Although these opportunities may appear to be diverse on the surface, the common denominator amongst these opportunities is that they are all rooted in our plant-based strategy. Our plant-based products are better for you and better for the planet. This is our strategy to building shareholder value”.

Management’s discussion and analysis for the period and the accompanying financial statements and notes are available under the company’s profile on SEDAR.

About Naturally Splendid Enterprises Ltd.

Founded in 2010, NSE operates a Safe Quality Food Level 2 certified food manufacturing facility just outside Vancouver, BC in Canada. The Company has established numerous healthy, functional foods under recognized brands such as Natera Sport™, Natera Hemp Foods, CHII, Elevate Me™ and Woods Wild Bar™, and most recently Natera Plant Based Foods, a line of delicious plant-based meat alternatives for the rapidly growing plant-based market segment. The Company has a myriad of new products and line extensions under development that are approaching launch. NSE, through its joint venture Plasm Pharmaceutical, has been approved for conducting a phase 2 clinical trial approved by Health Canada for treatment of COVID-19. NSE has also developed proprietary technologies for the extraction of high-demand, healthy omega 3 and 6 oils from hemp.

NSE contract manufacturers for healthy, functional food products and ingredients focusing on plant-based ingredients. The Company provides contract manufacturing services for many healthy food companies, private labeling a wide variety of nutritional food products destined for global healthy food markets.

For more information, email info@naturallysplendid.com or call Investor Relations at 604-465-0548 (ext. 105)

On Behalf of the Board of Directors
Mr. J. Craig Goodwin CEO, Director

Contact Information
Naturally Splendid Enterprises Ltd.
(NSP – TSX Venture; NSPDF – OTCQB; 50N – Frankfurt)
#108-19100 Airport Way
Pitt Meadows, BC, V3Y 0E2
Office: (604) 465-0548
Fax: (604) 465-1128
E-mail: info@naturallysplendid.com
Website: www.naturallysplendid.com

Forward-Looking Statements

Information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions and expectations. They are not guarantees of future performance. Naturally Splendid cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Naturally Splendid‘s control including, Naturally Splendid‘s ability to compete with large food and beverage companies; sales of any potential products developed will be profitable; sales of shelled hemp seed will continue at existing rates or increase; the ability to complete the sales of all bulk hemp seed purchase orders; and the risk that any of the potential applications may not receive all required regulatory or legal approval. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, Naturally Splendid undertakes no obligation to publicly update or revise forward-looking information.

SOURCE: Naturally Splendid Enterprises Ltd.

View source version on accesswire.com:
https://www.accesswire.com/662298/Naturally-Splendid-Reports-Second-Quarter-Results-for-2021

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Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and…

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Riley Gaines Explains How Women's Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and bewildering tunnel of social justice cultism?  Global events have been so frenetic that many people might not remember, but only a couple years ago Big Tech companies and numerous governments were openly aligned in favor of mass censorship.  Not just to prevent the public from investigating the facts surrounding the pandemic farce, but to silence anyone questioning the validity of woke concepts like trans ideology. 

From 2020-2022 was the closest the west has come in a long time to a complete erasure of freedom of speech.  Even today there are still countries and Europe and places like Canada or Australia that are charging forward with draconian speech laws.  The phrase "radical speech" is starting to circulate within pro-censorship circles in reference to any platform where people are allowed to talk critically.  What is radical speech?  Basically, it's any discussion that runs contrary to the beliefs of the political left.

Open hatred of moderate or conservative ideals is perfectly acceptable, but don't ever shine a negative light on woke activism, or you might be a terrorist.

Riley Gaines has experienced this double standard first hand.  She was even assaulted and taken hostage at an event in 2023 at San Francisco State University when leftists protester tried to trap her in a room and demanded she "pay them to let her go."  Campus police allegedly witnessed the incident but charges were never filed and surveillance footage from the college was never released.  

It's probably the last thing a champion female swimmer ever expects, but her head-on collision with the trans movement and the institutional conspiracy to push it on the public forced her to become a counter-culture voice of reason rather than just an athlete.

For years the independent media argued that no matter how much we expose the insanity of men posing as women to compete and dominate women's sports, nothing will really change until the real female athletes speak up and fight back.  Riley Gaines and those like her represent that necessary rebellion and a desperately needed return to common sense and reason.

In a recent interview on the Joe Rogan Podcast, Gaines related some interesting information on the inner workings of the NCAA and the subversive schemes surrounding trans athletes.  Not only were women participants essentially strong-armed by colleges and officials into quietly going along with the program, there was also a concerted propaganda effort.  Competition ceremonies were rigged as vehicles for promoting trans athletes over everyone else. 

The bottom line?  The competitions didn't matter.  The real women and their achievements didn't matter.  The only thing that mattered to officials were the photo ops; dudes pretending to be chicks posing with awards for the gushing corporate media.  The agenda took precedence.

Lia Thomas, formerly known as William Thomas, was more than an activist invading female sports, he was also apparently a science project fostered and protected by the athletic establishment.  It's important to understand that the political left does not care about female athletes.  They do not care about women's sports.  They don't care about the integrity of the environments they co-opt.  Their only goal is to identify viable platforms with social impact and take control of them.  Women's sports are seen as a vehicle for public indoctrination, nothing more.

The reasons why they covet women's sports are varied, but a primary motive is the desire to assert the fallacy that men and women are "the same" psychologically as well as physically.  They want the deconstruction of biological sex and identity as nothing more than "social constructs" subject to personal preference.  If they can destroy what it means to be a man or a woman, they can destroy the very foundations of relationships, families and even procreation.  

For now it seems as though the trans agenda is hitting a wall with much of the public aware of it and less afraid to criticize it.  Social media companies might be able to silence some people, but they can't silence everyone.  However, there is still a significant threat as the movement continues to target children through the public education system and women's sports are not out of the woods yet.   

The ultimate solution is for women athletes around the world to organize and widely refuse to participate in any competitions in which biological men are allowed.  The only way to save women's sports is for women to be willing to end them, at least until institutions that put doctrine ahead of logic are made irrelevant.          

Tyler Durden Wed, 03/13/2024 - 17:20

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Congress’ failure so far to deliver on promise of tens of billions in new research spending threatens America’s long-term economic competitiveness

A deal that avoided a shutdown also slashed spending for the National Science Foundation, putting it billions below a congressional target intended to…

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Science is again on the chopping block on Capitol Hill. AP Photo/Sait Serkan Gurbuz

Federal spending on fundamental scientific research is pivotal to America’s long-term economic competitiveness and growth. But less than two years after agreeing the U.S. needed to invest tens of billions of dollars more in basic research than it had been, Congress is already seriously scaling back its plans.

A package of funding bills recently passed by Congress and signed by President Joe Biden on March 9, 2024, cuts the current fiscal year budget for the National Science Foundation, America’s premier basic science research agency, by over 8% relative to last year. That puts the NSF’s current allocation US$6.6 billion below targets Congress set in 2022.

And the president’s budget blueprint for the next fiscal year, released on March 11, doesn’t look much better. Even assuming his request for the NSF is fully funded, it would still, based on my calculations, leave the agency a total of $15 billion behind the plan Congress laid out to help the U.S. keep up with countries such as China that are rapidly increasing their science budgets.

I am a sociologist who studies how research universities contribute to the public good. I’m also the executive director of the Institute for Research on Innovation and Science, a national university consortium whose members share data that helps us understand, explain and work to amplify those benefits.

Our data shows how underfunding basic research, especially in high-priority areas, poses a real threat to the United States’ role as a leader in critical technology areas, forestalls innovation and makes it harder to recruit the skilled workers that high-tech companies need to succeed.

A promised investment

Less than two years ago, in August 2022, university researchers like me had reason to celebrate.

Congress had just passed the bipartisan CHIPS and Science Act. The science part of the law promised one of the biggest federal investments in the National Science Foundation in its 74-year history.

The CHIPS act authorized US$81 billion for the agency, promised to double its budget by 2027 and directed it to “address societal, national, and geostrategic challenges for the benefit of all Americans” by investing in research.

But there was one very big snag. The money still has to be appropriated by Congress every year. Lawmakers haven’t been good at doing that recently. As lawmakers struggle to keep the lights on, fundamental research is quickly becoming a casualty of political dysfunction.

Research’s critical impact

That’s bad because fundamental research matters in more ways than you might expect.

For instance, the basic discoveries that made the COVID-19 vaccine possible stretch back to the early 1960s. Such research investments contribute to the health, wealth and well-being of society, support jobs and regional economies and are vital to the U.S. economy and national security.

Lagging research investment will hurt U.S. leadership in critical technologies such as artificial intelligence, advanced communications, clean energy and biotechnology. Less support means less new research work gets done, fewer new researchers are trained and important new discoveries are made elsewhere.

But disrupting federal research funding also directly affects people’s jobs, lives and the economy.

Businesses nationwide thrive by selling the goods and services – everything from pipettes and biological specimens to notebooks and plane tickets – that are necessary for research. Those vendors include high-tech startups, manufacturers, contractors and even Main Street businesses like your local hardware store. They employ your neighbors and friends and contribute to the economic health of your hometown and the nation.

Nearly a third of the $10 billion in federal research funds that 26 of the universities in our consortium used in 2022 directly supported U.S. employers, including:

  • A Detroit welding shop that sells gases many labs use in experiments funded by the National Institutes of Health, National Science Foundation, Department of Defense and Department of Energy.

  • A Dallas-based construction company that is building an advanced vaccine and drug development facility paid for by the Department of Health and Human Services.

  • More than a dozen Utah businesses, including surveyors, engineers and construction and trucking companies, working on a Department of Energy project to develop breakthroughs in geothermal energy.

When Congress shortchanges basic research, it also damages businesses like these and people you might not usually associate with academic science and engineering. Construction and manufacturing companies earn more than $2 billion each year from federally funded research done by our consortium’s members.

A lag or cut in federal research funding would harm U.S. competitiveness in critical advanced technologies such as artificial intelligence and robotics. Hispanolistic/E+ via Getty Images

Jobs and innovation

Disrupting or decreasing research funding also slows the flow of STEM – science, technology, engineering and math – talent from universities to American businesses. Highly trained people are essential to corporate innovation and to U.S. leadership in key fields, such as AI, where companies depend on hiring to secure research expertise.

In 2022, federal research grants paid wages for about 122,500 people at universities that shared data with my institute. More than half of them were students or trainees. Our data shows that they go on to many types of jobs but are particularly important for leading tech companies such as Google, Amazon, Apple, Facebook and Intel.

That same data lets me estimate that over 300,000 people who worked at U.S. universities in 2022 were paid by federal research funds. Threats to federal research investments put academic jobs at risk. They also hurt private sector innovation because even the most successful companies need to hire people with expert research skills. Most people learn those skills by working on university research projects, and most of those projects are federally funded.

High stakes

If Congress doesn’t move to fund fundamental science research to meet CHIPS and Science Act targets – and make up for the $11.6 billion it’s already behind schedule – the long-term consequences for American competitiveness could be serious.

Over time, companies would see fewer skilled job candidates, and academic and corporate researchers would produce fewer discoveries. Fewer high-tech startups would mean slower economic growth. America would become less competitive in the age of AI. This would turn one of the fears that led lawmakers to pass the CHIPS and Science Act into a reality.

Ultimately, it’s up to lawmakers to decide whether to fulfill their promise to invest more in the research that supports jobs across the economy and in American innovation, competitiveness and economic growth. So far, that promise is looking pretty fragile.

This is an updated version of an article originally published on Jan. 16, 2024.

Jason Owen-Smith receives research support from the National Science Foundation, the National Institutes of Health, the Alfred P. Sloan Foundation and Wellcome Leap.

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What’s Driving Industrial Development in the Southwest U.S.

The post-COVID-19 pandemic pipeline, supply imbalances, investment and construction challenges: these are just a few of the topics address by a powerhouse…

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The post-COVID-19 pandemic pipeline, supply imbalances, investment and construction challenges: these are just a few of the topics address by a powerhouse panel of executives in industrial real estate this week at NAIOP’s I.CON West in Long Beach, California. Led by Dawn McCombs, principal and Denver lead industrial specialist for Avison Young, the panel tackled some of the biggest issues facing the sector in the Western U.S. 

Starting with the pandemic in 2020 and continuing through 2022, McCombs said, the industrial sector experienced a huge surge in demand, resulting in historic vacancies, rent growth and record deliveries. Operating fundamentals began to normalize in 2023 and construction starts declined, certainly impacting vacancy and absorption moving forward.  

“Development starts dropped by 65% year-over-year across the U.S. last year. In Q4, we were down 25% from pre-COVID norms,” began Megan Creecy-Herman, president, U.S. West Region, Prologis, noting that all of that is setting us up to see an improvement of fundamentals in the market. “U.S. vacancy ended 2023 at about 5%, which is very healthy.” 

Vacancies are expected to grow in Q1 and Q2, peaking mid-year at around 7%. Creecy-Herman expects to see an increase in absorption as customers begin to have confidence in the economy, and everyone gets some certainty on what the Fed does with interest rates. 

“It’s an interesting dynamic to see such a great increase in rents, which have almost doubled in some markets,” said Reon Roski, CEO, Majestic Realty Co. “It’s healthy to see a slowing down… before [rents] go back up.” 

Pre-pandemic, a lot of markets were used to 4-5% vacancy, said Brooke Birtcher Gustafson, fifth-generation president of Birtcher Development. “Everyone was a little tepid about where things are headed with a mediocre outlook for 2024, but much of this is normalizing in the Southwest markets.”  

McCombs asked the panel where their companies found themselves in the construction pipeline when the Fed raised rates in 2022.   

In Salt Lake City, said Angela Eldredge, chief operations officer at Price Real Estate, there is a typical 12-18-month lead time on construction materials. “As rates started to rise in 2022, lots of permits had already been pulled and construction starts were beginning, so those project deliveries were in fall 2023. [The slowdown] was good for our market because it kept rates high, vacancies lower and helped normalize the market to a healthy pace.” 

A supply imbalance can stress any market, and Gustafson joked that the current imbalance reminded her of a favorite quote from the movie Super Troopers: “Desperation is a stinky cologne.” “We’re all still a little crazed where this imbalance has put us, but for the patient investor and owner, there will be a rebalancing and opportunity for the good quality real estate to pass the sniff test,” she said.  

At Bircher, Gustafson said that mid-pandemic, there were predictions that one billion square feet of new product would be required to meet tenant demand, e-commerce growth and safety stock. That transition opened a great opportunity for investors to run at the goal. “In California, the entitlement process is lengthy, around 24-36 months to get from the start of an acquisition to the completion of a building,” she said. Fast forward to 2023-2024, a lot of what is being delivered in 2024 is the result of that chase.  

“Being an optimistic developer, there is good news. The supply imbalance helped normalize what was an unsustainable surge in rents and land values,” she said. “It allowed corporate heads of real estate to proactively evaluate growth opportunities, opened the door for contrarian investors to land bank as values drop, and provided tenants with options as there is more product. Investment goals and strategies have shifted, and that’s created opportunity for buyers.” 

“Developers only know how to run and develop as much as we can,” said Roski. “There are certain times in cycles that we are forced to slow down, which is a good thing. In the last few years, Majestic has delivered 12-14 million square feet, and this year we are developing 6-8 million square feet. It’s all part of the cycle.”  

Creecy-Herman noted that compared to the other asset classes and opportunities out there, including office and multifamily, industrial remains much more attractive for investment. “That was absolutely one of the things that underpinned the amount of investment we saw in a relatively short time period,” she said.  

Market rent growth across Los Angeles, Inland Empire and Orange County moved up more than 100% in a 24-month period. That created opportunities for landlords to flexible as they’re filling up their buildings. “Normalizing can be uncomfortable especially after that kind of historic high, but at the same time it’s setting us up for strong years ahead,” she said. 

Issues that owners and landlords are facing with not as much movement in the market is driving a change in strategy, noted Gustafson. “Comps are all over the place,” she said. “You have to dive deep into every single deal that is done to understand it and how investment strategies are changing.” 

Tenants experienced a variety of challenges in the pandemic years, from supply chain to labor shortages on the negative side, to increased demand for products on the positive, McCombs noted.  

“Prologis has about 6,700 customers around the world, from small to large, and the universal lesson [from the pandemic] is taking a more conservative posture on inventories,” Creecy-Herman said. “Customers are beefing up inventories, and that conservatism in the supply chain is a lesson learned that’s going to stick with us for a long time.” She noted that the company has plenty of clients who want to take more space but are waiting on more certainty from the broader economy.  

“E-commerce grew by 8% last year, and we think that’s going to accelerate to 10% this year. This is still less than 25% of all retail sales, so the acceleration we’re going to see in e-commerce… is going to drive the business forward for a long time,” she said. 

Roski noted that customers continually re-evaluate their warehouse locations, expanding during the pandemic and now consolidating but staying within one delivery day of vast consumer bases.  

“This is a generational change,” said Creecy-Herman. “Millions of young consumers have one-day delivery as a baseline for their shopping experience. Think of what this means for our business long term to help our customers meet these expectations.” 

McCombs asked the panelists what kind of leasing activity they are experiencing as a return to normalcy is expected in 2024. 

“During the pandemic, shifts in the ports and supply chain created a build up along the Mexican border,” said Roski, noting border towns’ importance to increased manufacturing in Mexico. A shift of populations out of California and into Arizona, Nevada, Texas and Florida have resulted in an expansion of warehouses in those markets. 

Eldridge said that Salt Lake City’s “sweet spot” is 100-200 million square feet, noting that the market is best described as a mid-box distribution hub that is close to California and Midwest markets. “Our location opens up the entire U.S. to our market, and it’s continuing to grow,” she said.   

The recent supply chain and West Coast port clogs prompted significant investment in nearshoring and port improvements. “Ports are always changing,” said Roski, listing a looming strike at East Coast ports, challenges with pirates in the Suez Canal, and water issues in the Panama Canal. “Companies used to fix on one port and that’s where they’d bring in their imports, but now see they need to be [bring product] in a couple of places.” 

“Laredo, [Texas,] is one of the largest ports in the U.S., and there’s no water. It’s trucks coming across the border. Companies have learned to be nimble and not focused on one area,” she said. 

“All of the markets in the southwest are becoming more interconnected and interdependent than they were previously,” Creecy-Herman said. “In Southern California, there are 10 markets within 500 miles with over 25 million consumers who spend, on average, 10% more than typical U.S. consumers.” Combined with the port complex, those fundamentals aren’t changing. Creecy-Herman noted that it’s less of a California exodus than it is a complementary strategy where customers are taking space in other markets as they grow. In the last 10 years, she noted there has been significant maturation of markets such as Las Vegas and Phoenix. As they’ve become more diversified, customers want to have a presence there. 

In the last decade, Gustafson said, the consumer base has shifted. Tenants continue to change strategies to adapt, such as hub-and-spoke approaches.  From an investment perspective, she said that strategies change weekly in response to market dynamics that are unprecedented.  

McCombs said that construction challenges and utility constraints have been compounded by increased demand for water and power. 

“Those are big issues from the beginning when we’re deciding on whether to buy the dirt, and another decision during construction,” Roski said. “In some markets, we order transformers more than a year before they are needed. Otherwise, the time comes [to use them] and we can’t get them. It’s a new dynamic of how leases are structured because it’s something that’s out of our control.” She noted that it’s becoming a bigger issue with electrification of cars, trucks and real estate, and the U.S. power grid is not prepared to handle it.  

Salt Lake City’s land constraints play a role in site selection, said Eldridge. “Land values of areas near water are skyrocketing.” 

The panelists agreed that a favorable outlook is ahead for 2024, and today’s rebalancing will drive a healthy industry in the future as demand and rates return to normalized levels, creating opportunities for investors, developers and tenants.  


This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s I.CON West 2024. Learn more about JLL at www.us.jll.com or www.jll.ca.

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