Are you feeling nervous in these times of market turmoil? Should you panic, or should you strategize?
That's exactly what Patrick Carroll, CEO of 999 Holdings, has been doing as he navigates a $5 billion real estate portfolio through one of the most volatile markets in years.
Prior to founding 999 Holdings, Carroll founded and subsequently sold his Atlanta, GA, real estate investment firm, Carroll Org. He is currently headquartered in Miami Beach, FL, with a portfolio that extends throughout the Sunbelt.
It's a sector filled with promise, especially for those who know how to play the long game.
His advice to investors? Be ready to pivot, adapt to new technology, and cash in on the shifts others miss. Here's how.
Maintaining Excellence: How to Keep Tenants Happy
In today's high-interest-rate environment, Carroll is outspoken in his message to investors: don't be tempted to cut costs to the bone—instead, invest in upkeep if you want to get through this period.
"Tenants don't care if your interest payments are higher," Carroll contends. "They care about the quality of the space they're renting." This means one thing: if you want tenants to stay, you need to keep your properties in top condition, regardless of rising costs.
Investors who continue to maintain their spaces—making sure everything from repairs to upgrades is handled promptly—will come out ahead.
Timing the Market
Even the most amateur investor has some inkling about the importance of timing the market. But according to Carroll, it's never been more important than right now when the market is so volatile.
"Think about it," he said recently. "There's a lot of debt coming due, and if you're an owner having to come up with tons of cash, even a drop in rates may not save you."
In other words, for smart investors, this could signal an opportunity. As distressed assets begin to hit the market, those with capital in hand will be able to scoop them up at significant discounts.
But with a short window of opportunity, you have to be ready to move quickly. If you have ready capital and spot the properties worth investing in, you could find yourself holding valuable assets as the market corrects.
In Carroll's view, being prepared to move at the right moment is the name of the game.
Technology and Growth: The Future of Industrial Real Estate
While the industrial sector has always been strong, the game has changed—and technology is leading the charge. For Carroll, AI and automation represent the biggest shift in industrial real estate in decades.
"There will be a huge demand for data centers, as well as anything else AI," Carroll says. Investors who can position their properties to serve tech-driven tenants will find themselves at the center of a booming market.
But it's not as simple as retrofitting old spaces for new uses.
Carroll encourages investors to keep an eye on the ground for AI developments that will reshape the future of logistics and distribution. Data centers, robotics, and automation technologies are revolutionizing the landscape, and demand for AI-ready facilities is set to skyrocket.
"Owners should pay close attention to new developments in AI," Carroll advises, "to best serve their current tenants and attract new ones."
Tech-driven tenants need advanced infrastructure, and investors who understand this will secure higher rents.
Strategic Markets: Why Smaller Cities Are a Goldmine
While most investors focus on big cities, Patrick Carroll sees great potential in smaller, secondary markets. "I've always liked smaller secondary cities," he says. These overlooked areas often have a favorable balance of supply and demand, making them ripe for investment.
Secondary markets offer room for growth, lower entry costs, and significant upside for those willing to explore them. "Let the big institutional investors focus on the big cities," he says. "I've found that some of my biggest wins and best long-term growth has often come in smaller markets."
Redevelopment Over New Development: A Smarter Path to Profit
In the current market, with rising construction costs, Carroll cautions investors eager to break ground on new developments. Instead of starting from scratch, he recommends looking at redevelopment or value-add opportunities.
"I always favor redevelopment or value-add over ground-up development," Carroll explains. "The reason is simple: redeveloping an existing property is quicker to market and can keep cash flowing throughout the process."
New builds come with higher risks—especially if construction costs continue to climb. However, if you have a major tenant lined up—like Amazon, for example—Carroll suggests budgeting to incorporate those anticipated higher costs if you can still manage a solid return.
But even then, he warns, you have to be extra cautious. Construction costs can spiral, and the risks increase with every overrun. Carroll's strategy is to mitigate risks by focusing on redevelopment, where success is built on an existing foundation.
The Last Mile: Still the Best Bet
Despite the uncertainty in today's market, one of Carrol's favorite plays is in last-mile distribution. He loves identifying—and acting upon—opportunities with strategic locations.
"In my experience," he says, "the closer a distribution center is to its final destination, the more valuable it becomes. Investors who can identify outstanding last-mile listings can tap into one of the strongest niches in industrial real estate."
Stay Light on Your Feet
Basically, Carroll's strategy is to be ready for anything. Opportunities often crop up without warning, and the prepared investor is the investor most likely to thrive.
"Always be ready to take action," he advises. "Read the market, do the work others won't do to find those incredible investment opportunities. When you uncover one where the numbers make sense, don't hesitate to pounce."
