Industrial Real Estate in 2026: Why Tenants Have More Leverage | Joe Hills & Josh Lipoff

Josh Lipoff and Joe Hills (00:00)

Yeah, I would say big thing for us is the personal touch with our clients to Joe’s point. We weren’t able to do that when we had to service probably what over a hundred clients and now we get to kind of pick and choose who we want to build these long term relationships with. And because of that we’ve already, you know, built and purchased two hundred thousand square feet in our first three years, which we think is a great start to the firm. And we went from the two of us to now ten people here in a short period of time and

yeah, we all have our growing pains and in learning as we go. But you know, it’s been a great journey so far and look forward to the future.

Meghan Escobar (02:05)

Hello everyone. Welcome back to Real Estate Pros Podcast, hosted by Investor Fuel. Today I am your host, Meghan Escobar, and I have the pleasure of sitting down with two fine gentlemen who are in the world of development, recently broke into that industry, coming from a background of brokerage. And they’ve got you know, quite the journey that they want to share here, and I’m excited to bring them onto the show, as I do truly believe that our audience will

Walk away with some great insights from the journey that you are both building here. So Josh and Joe with HLI Partners, welcome to the show.

Josh Lipoff and Joe Hills (02:42)

Thank you very much, Meghan. Appreciate you having us. Good morning.

Meghan Escobar (02:45)

Absolutely. So diving in here for folks that might not be familiar with either of your names or who HLI Partners is, give us a 30,000 foot view of, you know, what the main focus is for HLI investors and what markets you’re operating in.

Josh Lipoff and Joe Hills (03:02)

Sure. So Josh and I met each other about 15 years ago. We were at a major national shop, Jones Lang LaSalle or JLL for short, and we built an industrial practice there representing tenants and owners of buildings and doing new developments. And we left that firm about three years ago to start our own because we got more engaged in development. But really what drove our company and our whole practice was representing tenants that had needs that were not available with property in the marketplace.

So our clients increasingly said, hey, we can’t find size and shape and type of property. Can you help us build that if it didn’t exist? And we continued to have to find and source land and different buildings and reshape them for our clients. And that didn’t align with what the goals were of the Big National Shop in terms of how they wanted us to service the clients.

So now we’ve been at it for about three years now. Together we’ve got about 10 folks working with us, and we have about four or five full-time brokers as well as ourselves. But we’re increasingly on the development side, finding land, sourcing buildings for our clients, and obviously putting deals together. But we’ve always just been deal junkies. We love finding and sourcing.

kind of putting the three together, land tenants and investors and or development capital. So it’s been a been a fun journey and obviously being business owners, as we had talked about before the podcast is fraught with challenges, but also a lot of opportunities as well.

Meghan Escobar (04:28)

Absolutely. I think that’s safe to say for, know, just being an entrepreneur in general, but most certainly real estate, it’s gonna come with the the the rewards, but there’s risks behind those, of course, right? That’s right. Anything that you wanna input there, Josh.

Josh Lipoff and Joe Hills (04:43)

Yeah, I would say the big big thing for us is the personal touch with our clients to Joe’s point. We weren’t able to do that when we had to service probably what over a hundred clients and now we get to kind of pick and choose who we want to build these long term relationships with. And because of that we’ve already, you know, built and purchased two hundred thousand square feet in our first three years, which we think is is a is a great start to the firm. And we went from the two of us to now ten people here in a short period of time and

yeah, we all have our growing pains and in in learning as we go. But you know, it’s been a great journey so far and look forward to the future.

Meghan Escobar (06:04)

Love that. You know, one thing that caught my attention when we were talking earlier, guys, was the pendulum shift opportunity that you mentioned and the you know, being in a tenant market. Do you mind digging into that and kind of like what that means for you guys?

Josh Lipoff and Joe Hills (06:18)

Sure. So having been in business twenty-five and Josh have been I’ve been together about fifteen. We’ve always had a passion for tenants and helping tenants find spaces in the marketplace. And over the last say thirteen or fourteen years, ever since we’ve been together, it’s pretty much been a landlord dominated climate.

had an e-commerce bubble that sort of burst a few years ago. A lot of development occurred to service that marketplace. It changed. The tenants went smaller, smarter, right-sized, a lot of corporate downsizing and reshaping their portfolios. Therefore, a lot of space sat on the marketplace the last couple, two, three years. And I would say the dust has settled at this point, COVID, obviously a lot of people migrated from, you know, say New York and the Northeast into Florida. And a lot of developers

Had to kind of adjust and make their projections on that growth, especially on the home building side, which a lot tenants on the industrial side, that’s kind of what they do where they house a lot of their products. So I think to this point, to Joe’s point, the dust is settling. We’re starting to see kind of that supply and demand pendulum. And for a while, yeah, there was a little bit of oversupply, hence a tenants market. Now a lot of those spaces have been consumed, and we’re probably at the end of it swinging back. So

You know, these tenants are gonna enjoy it while they can, getting more concessions, free rent, better rental rates, but that’s probably gonna change here in the next twenty-four months.

Meghan Escobar (07:43)

Awesome, awesome. And another thing that I that kind of stood out to me was that statement. I think it was Joe that had mentioned it or or it might have been Josh, either way. I thought it was really powerful. you both come from the northeast. Joe, Atlanta, Josh, Philly. you both migrated down here to Central Florida and mentioned that this opportunity being a big fish in a small pond. What does that mean?

Josh Lipoff and Joe Hills (08:07)

Well, I think that Orlando versus in Atlanta or a Jersey, we took a lot of the big market lessons that we had both picked up or learned. And certainly Josh had more time in Jersey than I had in Atlanta. But you learn a lot of the big city metrics. And obviously Orlando has a lot of really talented brokers. There’s a lot of big companies here, but it’s a smaller market, so there’s fewer brokers and it gives you more of an advantage to take

take more of a position in the marketplace and a quicker pace, right? There’s if you go to DC or LA or a lot of these major markets, you could have the bright biggest and brightest education and sit behind 15 guys before you have a chance for 15 years. And here there’s a little bit more of an opportunity to get out there and and shine earlier in your brokerage career and do some larger transactions.

Kind of like I know if you Wayne Gretzky, but he had a saying, you know, you got y he goes where the puck is. And we felt that Central Florida is kind of where the puck was headed, where development opportunities, obviously land that you can purchase at reasonable numbers to make deals work, versus like where I came from, New Jersey, you’re competing with institutions where the small time developer wouldn’t really have as good of an opportunity as we felt here in Orlando.

Meghan Escobar (09:16)

Thank you for breaking that down. And I love the analogy. I think a lot of people can resonate with that. and i where I’d like to pivot to next is kind of talking about maybe some challenges that you guys have faced. And, you know, you’ve been in the game for a long time and we talked about risk and reward and as entrepreneurs or you know, just just kind of being an operator, right? Like every operator I know has had a moment where things got real or

A time where a deal went sideways or you had to pivot really fast. And with the years and experience that you guys have, I’m sure there’s probably quite a few, right? But are there any specifically that kind of stick with you throughout your journey when you’re, you know, taking that golden shovel and finding new development and things like that, something that kind of just like sticks with you?

Josh Lipoff and Joe Hills (10:00)

Well, I’m trying to keep it simplified, but I think we have three different windows of challenges and opportunities. Obviously, we’re growing and developing a business here that has people and HR and AI and all the things that you manage and you have to contend with constantly changing. And then we have the brokerage end, which we love servicing and helping clients with complex, challenging problems. And to Josh’s point, we went from a hundred deals to 20 a year. And the reason for that is because

Obviously, we can do a lot more time and energy and resources for those 20 clients when they have very challenging situations, right? We’ve had a client this past year and wanted to go from four buildings to one and we had to sublease all of his other space, put him in another building and develop it for him, and then obviously buy his existing building and fill that back up. So you know, we’ve done a lot of complex problem solving for clients, and then we have

build the business at the same time, then get buildings up and out of the ground and get those leased up. So we’ve had three different layers from development to running and building the company to then working on complex, challenging problems for our tenant clients and landlords who are trying to fill buildings and or find spaces. while we figure out what’s next.

Meghan Escobar (11:53)

Not an easy thing to do in this climate. And I know you mentioned that, you know, you guys now have a team behind you and do you feel, you know, having other individuals on the team is allowing you guys to

work through these challenges, you know, a I don’t know, easier scale.

Josh Lipoff and Joe Hills (12:08)

Yes. Chad. Yeah, we like any company, they free up our time in other areas as they progress in their own careers. Obviously we’ve trained some of these folks from little to no experience to now, you know, successful brokers. so as they continue to build the brokerage side, that gives Joe and I kind of the time and the opportunity to find new development deals. And then what’s great for you know, what’s unique about HLI is we invite our people that work for us to

obviously invest in the deal so they can literally physically touch and have some pride in what they’re doing every day because they can literally go walk up and touch these buildings which makes everybody more prideful.

Meghan Escobar (12:40)

That’s so beautiful. Yeah, I mean that’s a that’s definitely a unique way to offer what’s the word I’m looking for? Not compensation, but like to feel like they’re part they’re partners as well.

Josh Lipoff and Joe Hills (12:52)

That’s that’s kind of the lingo of of our company. And like I said, it’s it’s something that you know we’re prideful for and that’s kind of gonna be the how we’re gonna continue doing things for years to come.

Meghan Escobar (13:02)

Love it.

So big things coming for the future. And thank you for sharing that, Joe. I think it’s really important to kind of talk about some of that stuff, especially because a lot of people in our audience they might be very green in in looking to get into the game and you didn’t needing to understand and see that like you’re gonna have to go through these risks. You’re going to have to, know, probably fail a couple of times at some things before you might see the full reward.

It and is that something that you guys can resonate with?

Josh Lipoff and Joe Hills (13:30)

Yeah, I think the biggest thing for new people is going from a place of being comfortable in a job where you may have a salary and a bonus or you’re in a typical sales role to go and commission and then going from that to development where you’re putting your own money and time at risk. There is a lot of discomfort that goes along with every day, right? And it think of it in terms of working out. You’ve got to be uncomfortable for a long period of time and a lot of discipline in order to

look and feel the way you want. And in business it’s the same way. If you want to transform into development from brokerage, you have to be uncomfortable learning a new skill and being not great at it for a long period of time in order to get to that next level. And so I think for yeah, for new people coming in, we’ve trained a lot of green people with no experience. have to be coachable. They have to be comfortable being uncomfortable because

you know, getting rejection making calls and knocking on doors and facing the rejection and not knowing anything about the business takes a while for people to get acclimated to. Those

Meghan Escobar (14:29)

One hundred.

Josh Lipoff and Joe Hills (14:29)

are those are the people that we we really give an opportunity that the rest of the market is not going to give an opportunity to. And for worse, we’re starting out, we had to give those type of folks an opportunity to because we were smaller. We didn’t have you know the

the access to the people, you know, the at the time. So we’re playing money ball. We we see opportunities and potential people where others may not see it and we exploit it and it’s worked. But to Joe’s point in, you know, brokerage and or development, yeah, you’re gonna fail a lot, but you’re gonna learn a lot. And if you can, you know, reflect on that and learn, you’ll have a successful career.

Meghan Escobar (15:02)

Yeah. Yeah. Thank you guys for sharing that piece of that those nuggets because it’s it is important for people to understand. I don’t know if either of you know who Gary V is, but he talks about I love Gary V, he’s awesome, right? But like he talks about like you need to be able to face like rejection in in any business. And so, you know, he gives great advice on

go out there and apply for things you know you’re gonna get rejected for, right? Have get yourself into rooms that like you know you’re not supposed to be in and just get the rejection, build that tolerance up because you gotta be able to face it without without looking at yourself in the mirror and saying that like it wasn’t you personally being rejected, right? It’s just like maybe that just wasn’t an opportunity for the person that you offered the opportunity to, and that’s okay.

There’s million more people out there to go, you know, knock on the door. So thank you guys. And so talk to us a little bit about what the next focus is for you guys, next problem that you’re getting ready to solve or scale.

Josh Lipoff and Joe Hills (16:03)

Go first. I was gonna say, I think for us, continuing to grow the company and solving bigger, bigger problems is what we’ve been tasked with by our clients. And so we kind of follow what the clients lead is, and now we’re seeing the market change and adapt, and they’re doing more consolidations and expansions. So like I was saying before, we’ve been able to kind of help people by

buying maybe a an existing bullet that they have and moving them into a larger class A facility that improves their recruiting and retention. And then also our people are graduating up now to where they can handle more and more larger assignments. So I think the next phase for HLI is scaling nationally, meaning we have clients that have several locations around the country. We have a meeting tomorrow with the

a team who has 40 locations around the country and they’re not getting serviced by a larger national company the way that they they feel that they need that level of attention. And so now with the people that we have on board we can focus on more of that national scale and helping people where they need a new building and say a tertiary market and one of these major metros. And so we’re to be helping people across the country as we’ve been doing, we we did two or three this year for

Samsung and some other larger national clients of ours

Meghan Escobar (17:18)

Mm-hmm.

Josh Lipoff and Joe Hills (17:19)

will continue to scale up around the country. Yeah, and we, you know, into what’s unique for us is we’re licensed in multiple states. So we get to travel with our clients and they we get literally hold their hand. we just did a deal in Las Vegas and you know went out there and toured with them and into it with that market and you know we’re continuing to grow from there, which is a nice add on to to HLI Partners.

Meghan Escobar (17:38)

Love to see it. Well, we’ll have to have you guys back on the show a year from now to see where that goes. So that’s exciting. that’s huge. And of course, you know, that’s going to be able to take you guys to the next level and compound things and probably create a little chaos along the way. But, you know, we gotta you gotta play the game, right?

Josh Lipoff and Joe Hills (17:57)

Right. Every small business dies a thousand deaths, they say.

Meghan Escobar (18:01)

Yeah. Yep. That’s the truth. and I we’ll pivot now to we talked a little bit about building relationships, network, and surrounding yourself with the right people. And I think that’s really important for people to understand as well. And so for you guys, what has made the biggest difference when it comes to you know, growing your network?

Josh Lipoff and Joe Hills (18:22)

You know, what I’ve done for my network is it’s like if there’s like a skill that I don’t know that we try to learn a lot as an example, and then but we brought on a tax advisor, which is almost almost like a partner with us. They come to a lot of our meetings and they educate a lot of our clients and business owners and building owners in things like cost segregation analysis. And if you’re not familiar, it’s basically accelerated appreciation.

on a building and you get to capture all that tax savings in that calendar year. And for some folks, I mean that could be six or seven figures of savings that they never maybe understood. Or like maybe they as these people maybe look at their succession plans and maybe selling the company, they can start learning those steps three, four, five years ahead. So when the time comes, they’re fully prepared, they take full advantage and there’s no questions. So granted that may not be real estate brokerage or development,

But having these partners, network tier point relationships, that lends itself. And we have gotten multiple deals because we’ve had certain people in the room with us that we invite to our meetings so that it’s more productive and all around. So they get a lot of the questions answered, not just real estate.

Meghan Escobar (19:27)

Thank you for sharing that, Josh. I you just said something really powerful there. Like, if there’s something that you don’t know, you want to learn about it, right? and maybe that’s not your area of expertise, but to just be knowledgeable of it to know that, okay, I’m not I’m like we started talking and you guys look, we’re deal finders, right? That’s who we are, right? Like that’s what we’re really, really good at. Doesn’t mean that you shouldn’t know how to do the things on the back end of the business.

maybe delegate those tasks to somebody else, but just to understand how things are operating is important, you know?

Josh Lipoff and Joe Hills (19:56)

Pollinating is very important in business. So people that know how to do that well can excel a lot faster you know, you have other people endorsing you and it makes everyone look better and the client, you know, respects and appreciates it. That’s right.

Meghan Escobar (20:08)

Yeah, absolutely. There’s a saying that I heard couple years back from a mentor of mine. The more you learn, the more you earn. Right. Like you gotta you gotta be willing to know that like you you don’t know all things, right? You don’t know all things.

Josh Lipoff and Joe Hills (20:23)

I think the more you build yourself, you know, success finds you. It’s not the other way around, right? So if you don’t continue to develop your skills, can to develop who you are as a person, then the business doesn’t find you as fast. But attitude is the biggest thing I can tell young people. You have to be in our business, you have to go through a lot of opportunities and quickly understand where to spend your time. But if you don’t have a positive outlook on life, if you don’t get up in the morning and

you know, work out hard and get in the office with a good attitude and be ready to breathe that positive energy into the marketplace, you’re not gonna get rewarded. And there’s so many people that want to complain, they want to talk about the market. They just have a negative outlook on life. They can’t find whatever it is that they’re gonna look for in happiness. And you know, the marketplace doesn’t reward them. So I think the biggest thing we tell people is have a good attitude when you show up, be coachable.

Be willing to work hard and learn and continuously develop yourself and then the marketplace will reward you. And we’ve seen that happen time and time again.

Meghan Escobar (21:22)

That’s right.

I can’agree more. And I have been a serial entrepreneur for the last five years in in many different industries. And no matter where I am, I’ll tell you that’s that is something that I always always coach and will state. Like you need to have your mind right before you plan on anything, right? You gotta have an attitude of gratitude. So

Josh Lipoff and Joe Hills (21:51)

Absolutely. The gratitude is case in point every day. You have to remember what you’ve got going for you.

Meghan Escobar (21:57)

That’s right. That’s right. Perfect. Awesome stuff. And yeah, relationships are everything, guys. Like you know, it’s it’s part of business, right? Every business is the people business, even in the digital world that we have, you know, evolving today. businesses don’t run without human connection and relationships. So it’s it’s pretty important too.

Josh Lipoff and Joe Hills (22:17)

Well, and I think I the big thing about relationships that we’ve experienced is so many people don’t solve problems. Yeah. We have a lot of clients come to us that have been through ten, fifteen years of business with different brokers and they said, You guys are the first ones that took the ball, took the risk. We’ll put our commissions at risk to make the client understand we’re a partner, not just a commodity.

And we will pay for due diligence on buildings and land to make sure that the client understands we have their best interests at heart that we’re gonna get somebody under contract that will actually perform and do what they say they’re gonna do because we control the information, not the buyer who may stream you out for six months before they tell you they didn’t do any homework or due diligence as an example. And you know, obviously on our our client side, these people demand a lot of attention.

And if you have to Josh’s point, a hundred transactions versus twenty, you just don’t physically have the time to give these folks the attention that they need in order to get transactions done are this complex. There’s just too many big pieces and they take an extreme amount of focus to get the outcomes. And so what we like to say is we achieve outsized results because we put an outsized amount of you know effort into it, right?

Meghan Escobar (23:31)

Yeah. Like an ATM machine, right? Like what you put into it is what you’re gonna get out of it.

Josh Lipoff and Joe Hills (23:36)

Yes. And so it’s you know, in today’s market there’s so many people who just don’t pick up the phone. You know. And I mean, simple things like returning people’s phone calls, answering calls and questions, big part of the business.

Meghan Escobar (23:48)

goes a long way. It goes a long way for sure. All right. Well, before we wrap up here, guys, if you know, anyone in the audience is looking to connect with you and learn more about what you do, collab with you, partner with you, what is the best way for them to, you know, reach out? Is there a website or social media or or phone?

Josh Lipoff and Joe Hills (24:10)

Yeah, obviously they can they can reach us at hlipartners.com. our contact information is on there. Both of us are on on LinkedIn. And we also have a business page on LinkedIn as well, so they can follow HLI Partners that way. Jim Bush, if anyone has any questions, Joe and I are happy to, you know, help people in the in the real estate investment community, you know, with their careers. And we’re always willing to to go to coffee with folks. We get called fairly routinely to

Yeah, that people are looking to get into business, they want to understand more about what’s there. We’re always happy to give somebody a few minutes.

Meghan Escobar (24:40)

Awesome stuff. And we will be sure to have those links below. So you don’t have to Google in or search in LinkedIn. We can just drop them down below and we’ll get you guys connected directly to you right from the show.

Josh Lipoff and Joe Hills (24:52)

Thank you. Yeah, we appreciate that very much.

Meghan Escobar (24:55)

Absolutely perfect. Well, thank you so much, guys, for your time, your story, more importantly, your perspective and wisdom and experience that you shared here with us today. It’s it’s been a great conversation. And I do believe that there’s someone in the audience that you know needed to hear from you guys today. So sounds like you’re out here doing the right thing, creating the right relationships and

That is something we need more in this space for sure. So thank you so much again, Josh and Joe, for being here with us today on Real Estate Pros Podcast.

Josh Lipoff and Joe Hills (25:28)

Thank you. Thank you. Appreciate it.

Meghan Escobar (25:30)

Absolutely. And for those of you that are tuning in, if you got any value from this, make sure to hit like and subscribe. We’ve got more conversations coming in like this every single day with operators that are building real businesses in real time with real people. We’ll see you on the next episode.