SCF 28 | Industrial Real Estate


The industrial sector of commercial real estate is an underappreciated asset class. But, according to Neil Wahlgren, it is one with great, and even perhaps guaranteed, returns. In this episode, Neil chats with host Dale Corpus to discuss the basics of investing in the industrial space. Neil is the CEO of MAG Capital Partners with 10 years of direct real estate experience as an investor and capital markets expert. He definitely knows what he’s talking about when it comes to investing. Tune in and get expert tips to start expanding your portfolio and go large with your investments.

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An Inside Look On The Industrial Sector Of Commercial Real Estate With Neil Wahlgren

I have an expert in the industrial sector of commercial real estate. It is an asset class that is not as frequently talked about compared to something multifamily. Even for me, it is a foreign concept. People are initially intimidated when they think about industrial assets and triple net leases. My guest, Mr. Neil Wahlgren, is going to break it down for us.

Here is a little bit more info about my guest. Mr. Wahlgren brings years of direct real estate experience as both an investor and Capital Markets Expert at MAG Capital Partners. Having raised equity for over $450 million in real estate and operating companies prior to joining MAG Capital Partners, Mr. Wahlgren led a Bay Area real estate investment firm for four years, growing all aspects of the business to an asset under management exceeding $500 million.

Mr. Wahlgren began his career as a military officer, logged over 2,500 flight hours, piloting the C-130 in the Air Force and Navy, following combat tours to Iraq and then Afghanistan. He concluded his military career as a Lieutenant Commander. Mr. Wahlgren resides with his wife and son in San Francisco and holds a BS from US Air Force Academy and an MBA from Texas A&M University. Without further ado, welcome to the show, Neil. How are you?

I’m doing great, Dale. I appreciate you having me on.

You are based in the Bay Area, and I’m in the East in San Ramon. I did not realize that you were initially from San Ramon. I have been here for many years now, so you had seen it way before I knew all about it. It was probably a lot different back then.

The East Bay was not even officially part of the Bay Area when I lived there. There were about fifteen miles of ranch land separating the Bay Area from the distant suburbs, but now it is all one giant metro.

That is crazy, but you are still in the Bay. We flip-flopped because you are in San Francisco and I grew up over there. Going back to your bio, can you tell me more about yourself, perhaps adding color to it? Tell me more, even your main focus is.

I’m a North Cal native. I grew up there but lived out of state for about fifteen years. I lived in Japan for about four, a couple of years overseas, in the Middle East, Arkansas, Texas, Oklahoma, Arizona, Colorado, all over the US through a lot of the military and flying stations and deployments out there. It is a neat way to see the world and a great way to cut your teeth in your twenties. It set up what I needed.

It was a strong foundation of discipline and structure. Coming from the upbringing I had, that was the right place at the right time and I had a great experience with that. While I was getting near the end, I started going, “Do I stay in the military? Do I do what most pilots do and go to the commercial airlines or do something different?”

In that period, I had met a couple of reserve pilots who were fairly into real estate investing. They were buying single-family homes. They were still flying but they were almost more excited to talk about these real estate things they were doing out of state. I had never seen some of them before, which was wild to me. After a while, I jumped in there and I bought a couple of small single-family and turnkey rental homes in Indiana.

It wet my appetite for this idea that you can put your money to work and start this residual cashflow that requires nothing from your day-to-day. Suddenly, you are like, “I’m only getting a few hundred dollars right now, but what if I bought another 1, 5, or 10 more?” This idea of, “I could scale this in a pretty clear path to eventually offset or even fully eliminate the need for a 9:00 to 5:00.” That was what prompted my full-time move into the real estate world.

You started off with residential. Do you still own a lot of that same residential or do you sell it all off?

You can put your money to work and start this residual cashflow that requires nothing from your day-to-day. Share on X

I have sold off a bunch of it. I took some profits probably a year or two early, but it is what it is. It led me into an opportunity in the Bay Area where before MAG Capital, I was working for a firm that we were effectively investor, equity-focused. We would partner with commercial operators and did a transition over to the commercial real estate. It is the same fundamentals, just on a larger scale. What I viewed to be a more manageable controllable risk was still similar for, if not better, returns. That was what flowed into there.

You are in the industrial space. Can you even break that down? What does that even mean and what is it like? What are the categories of it?

Industrial 101 is an interesting asset class because the majority of people will probably never even walk into an industrial warehouse in their life. It is a foreign concept. It is big, boring buildings, four walls on a roof, or some combination of large square footage buildings. The pretty main categories you are going to have is warehouse/manufacturing. That is going to be those large square footage, typically 50 to 250,000 square feet, high bay, and 40-foot ceilings.

You can have a shipping and receiving base for trucks. It will be storage, distribution, or manufacturing. There are some flexible use inside on how companies want to use that. That is the first. The second is going to be flex industrial and that is going to be more similar to a multi-tenant retail center. Imagine long buildings subdivided into smaller square foot sections.

Each one might be 1,000 to 3,000 square feet. It will still have a truck bay for shipping and receiving. It will be everything from tire shops to storage facilities, for say, a lawn care business to the small manufacturing for a craft business. It is something that maybe is not customer or retail-focused. It is the behind-the-scenes, either storage or manufacturing for smaller, typically mom-and-pop, micro-credit businesses or micro-credit tenants.

The third is going to be specialty industrial and that is going to range custom specific build real estate for a very particular use. That could be cold storage, petrochemicals, smokestacks, concrete yards, or even pharmaceuticals, biotech with pressurized and temperature-controlled rooms. All these are going to be specialty industrial that is going to be its own asset class then.

Over at your current company, do you focus on certain ones or work with all of them?

At MAG Capital, who I’m a principal with, we focus almost exclusively on light manufacturing tenant industrial.

What are the biggest risks in an asset like that?

Especially from a comparison basis to multifamily, you have a more concentrated risk in that you almost always have a single tenant in these buildings. The building is going to be occupied by a much larger, more stabilized tenant. However, the risk from an occupancy standpoint is going to be more binary than multifamily.

When you go into multifamily, you are going to always expect a certain amount of vacancy. You might come in and go, “I’m going to buy this building. I’m going to do some improvements. I will be able to increase the rents. I will be able to increase the occupancy and run this at a high aggregate level of occupancy.” On the flip side, industrial is much more of a defensive play, especially when you come in buying an occupied building. You have full occupancy. Usually, your lease will have built-in rent bumps. You are going to have long-term leases.

We are typically putting new leases on the buildings we buy. Twenty-year term is the norm. It is a very long-term lease, but usually, the tenant has been in place for sometimes 30, 40, or 50 years. They are very much tied to that real estate as they are with their operations. Those two are intertwined in a great way. It makes that tenant super sticky. As an investor, we are largely looking at real estate fundamentals paired with how strong the credit is behind our tenant and how certain are we that tenant is going to be able to stay in business and pay their rent.

SCF 28 | Industrial Real Estate

Industrial Real Estate: As an investor, we are largely looking at real estate fundamentals paired with how strong the credit behind our tenant is, and how certain we are that that tenant’s going to be able to stay in business and pay their rent.


I understand multifamily. You are dealing with tenants and you are leasing to companies. On the multifamily side, I’m familiar with the value add so that you can increase rent and then eventually increase the value. These are twenty-year leases with incremental bumps potentially annually. Is that where the value is coming in because you are built in the rent bumps or is it something else?

The value add component is going to be less on an industrial. You start with a higher amount of cashflow from day one in industrial than you would in multifamily. However, the amount of value you are adding is more contractual in nature rather than physical improvements. To take that a step further, one of the unique advantages of the single-tenant industrial space is the leases tend to be triple net.

This is a quick review. In comparison to multifamily, if you own an apartment building, you are probably paying your own property taxes, almost certainly paying your own property insurance, and going to be paying some combination or some part of the utilities and almost all of the building maintenance. Conversely, in a triple net lease structure in an industrial setup, the tenant pays for all that. They pay their own property tax, insurance, utilities, and most of all, building maintenance.

On a twenty-year lease, if that roof is going to need replacing in ten years, the tenant pays for it. If the HVAC has a twelve-year service life, the tenant is going to pay for it. That includes even pavement repairs and new paint. It is as if they own the building from an expense standpoint, but we own the building, and they are renters, paying us reliable rent with that expense line removed out of our underwriting performer.

Is there a property manager involved or are the tenants their own property manager?

It is essentially self-managed. We will send an inspector in maybe every 2 or 3 years to take a look at it and will identify maybe this repair needs to be done, but the tenant is contractually required to both do the repair and pay for it.

It is interesting to hear that because a lot of the headaches in multifamily are from all of the maintenance, the calls, and dealing with that. It sounds so foreign to me that type of stuff doesn’t exist with what you are talking about. I have to wrap my head around it.

On the triple net side, we call them sleepy easy investments. Do not get me wrong, surprises happen, but they are not our surprises. There are tenant surprises when unexpected repairs come up. With bathroom stocks up, I do not get a call. They handle it themselves. That is the joy and the advantage of a triple net lease structure as a landlord.

I’m doing the analogy with multifamily because I understand it. When you have an applicant that wants to be a tenant, you run their credit report, do a background check, and see if they have any criminal activity. On your side, when you are doing a check on a tenant, how do you check on the company’s credit? Is there a special scoring system or how does it work over there?

In general, you can divide tenants into public and private credit. Public credit would be, say, you have Amazon as your tenant. Their financials are very public. They have underwriters. They have Moody’s and S&P will give them a very objective credit rating. You know the high degree of certainty what their credit worthiness is.

Conversely, you have privately held companies. The majority of what we buy have privately held tenants. We go in and it is a little harder to figure out what their financials are. When something is a little more difficult, that also creates opportunity. We have built up a very strong internal credit department. We have three effective business credit underwriters who, when we go in on every potential deal, are building out typically a 15- to 20-page credit memo.

That is looking at audited financial statements. Sometimes they sell us the building and then lease it back. If that happens, how are they using the cash from that sale? We work with their management to build out a forward-looking projection that will benchmark where we think their future performance will look like. One unique thing on a single-tenant model is we will get quarterly financial statements required from our tenant.

Imagine being a multifamily landlord and telling your renters they got to give their pay statements every three months. It would be unheard of, but when you have more concentration with a single-tenant, you can demand that. Every quarter, we get a full set of financial statements, balance sheets and look at their debt load. We are looking for trends and how does this compare to our benchmark growth projections, and how certain are we that they are going to be able to continue to pay their rent?

Protect investor capital. That should be always be your number one priority as an investment sponsor. Share on X

What happens when you are looking at the financials and it does not look like it is on track where they can pay their rent? Does it cause some initial alarm? Do you guys have to do anything at that point or do you wait it out to see how things progress?

Before I answer that, I will say your typical tenant profile is going to be much stronger than what you might find in a retail tenant or especially a multifamily tenant. Just to paint a picture, our average company profile has been a business 70 to 80 years. Most of them do close to $100 million in a year in revenues. These are very established companies that are filling a large amount of square footage.

Because of that, they typically run themselves in a professional manner. They keep reserves. They have shown the historical ability to weather recessionary storms. Most of them probably have seen a dozen recessions and made it through. That is where we start from. To your point, we watch the ongoing credit history after we buy, and the ebb and flow.

What our MO is as an investment group is, if we saw 3 or 4 declining quarters and maybe the credit scenario has shifted to a point where this is not as compelling of a credit play as what we might have wanted, by requiring those quarterly statements early, we can be proactive. Our move is simply to sell early. We will maybe give up some profits.

If we can sell early, usually at a level where we can return capital, maybe have a little bit of profits generated through the whole period there and ultimately redeploy to a different project. You live to fight another day and you protect investor capital. That should always be your number one priority as an investment sponsor. As long as you do that, you will have successful investment relationships that will follow you from deal-to-deal.

For MAG Capital, what is a typical deal look like? Can we talk about that?

Yes. Our sweet spot bread and butter is going to be light manufacturing, B2B-focused industrial tenants. Usually, what happens is it is family-owned. They have been around 50 to 60 years either the founder or the founder’s children run it. They have been acquired by a private equity group. That private equity group loves what they have seen. They are coming in and think they can apply that private equity expertise to continue the growth of this company exponentially.

However, if that company owns its own real estate, that private equity group is laser focused on growing the operations. They are less interested in being real estate owners or investors. When that happens, they will often come straight to us and say, “We bought a company. It came with the real estate. We want to do a sale-leaseback.” They will sell us the real estate, lease it back, and then they will take the money that was tied in that real estate and basically redirect it toward the operational side because that is how they make money.

They are reinvesting back into the business. They don’t want to be property managers anymore, but the money they make will grow the ops and that is what they are good at.

Exactly. From an operational standpoint, nothing changes. They operate and the manufacturing lines continue day-to-day. On paper, they simply go from an owner of that real estate to a renter of that real estate. They basically get a capital infusion that came from the sale of that building. They can redeploy it into more growth-oriented parts of their business.

Going back to what has been happening because of COVID, how has this space been affected, if any at all?

We have been fortunate. One nice thing of the out industrial exceptionally focused in the Midwest, a lot of that is geographic. Most of our tenants ship products nationwide, everything from auto parts, aerospace parts, or industrial mixers and dryers. We have got contracts, white-label food manufacturers, and skin and hair care manufacturers. It is a number of different B2B types of industries.

SCF 28 | Industrial Real Estate

Industrial Real Estate: In a triple net lease structure in an industrial setup, the tenant pays their own property tax, insurance, utilities and most of all, building maintenance.


They tend to be from Texas to Michigan. If you could draw a straight line between the two, that is our sweet spot of where we buy. The advantage of those is they tend to be very business-friendly states. When COVID hit, we had 24 properties under management, and 23 of them were deemed essential industries, allowed to continue operations, and never missed a beat. Most of them had some of their best years in the back half of 2020 and 2021.

The only exception to that is we had a single-tenant health club. They were in Iowa. They were forced closed for 42 days then allowed to reopen, but within two weeks later, they were back on. All the long-term gym memberships, they didn’t miss a beat from a revenue and business standpoint. It was a fortunate business class to be in being one step away from the consumer-facing side and more business-to-business side. We find those industries tend to have a little more resiliency, a little less affected from the day-to-day changes of the economy and new laws and trends that are hitting.

You said the Midwest. Is that the main market that you are focused on? Are you doing other deals or are you doing deals nationwide, even outside that area?

We are opportunistic. Sometimes, if we feel there is exceptional pricing, we will buy in coastal markets. We’re under contract right looking at a deal outside of West Palm Beach. That deal is more enticing, less so from a cashflow perspective, but more so getting great faces on the real estate. When you feel we are buying at a good basis and that the market, probably from day one, can support a higher price for the square foot than what we are paying, then we will pursue non-Midwest markets.

Is that niche of the sale and the leaseback? Is that the main focus of what you guys do?

That is a niche within a niche. A single-tenant net lease industrial is our niche and then buying through a leaseback is our niche within a niche, which I like. We are hyper-focused experts in a very small percentage of real estate transactions. However, we do it probably equal or better than all the limited players in other states.

Correct me if I’m wrong, but it seems that mitigates the risk even more so. They are getting cash infusion to help them even pay their lease for an even longer term. That is amazing.

One thing I like about it, too, is we, as an ownership group, have options. Our typical horizon is about five years, but we are putting a 20-year lease on, and we are usually putting on a 10-year fixed rate debt. Come year 4 or 5, my tenant is in place. They are paying rent. I’m paying my investors. Everyone is happy. We come to win and I would sell. I can’t tell you what is going to happen in five years.

Let’s say the industrial market is in the tank. If nobody is buying or you are buying at a heavy discount, we can say, “We will hold a few years. It is fine.” We got fifteen years left to lease at this point. We have got five years left a term on our debt. We could sit on this thing for another five years. Having options like that puts us in an opportunistic zone of being owners and managers of these pieces of real estate, where we can read the markets and decide when is the best time to sell and hold.

How are you guys mainly getting the leads for that setup? You mentioned private equity. Is it mainly from that? Are you guys actively finding another way?

It is a mix from direct deal flow from private equity groups largely that we have done prior business with. If they go to buy their next portfolio company, they will often go straight to us and go, “We had a great experience. Let’s do another one.” They are more interested in moving quickly. They do not always want to do a year-long mass marketing and campaign. They just want to get the money out of the building redeployed into the business start growing that piece fast because that’s how they make money.

The other way is through, again, the niche level. You have commercial real estate brokers, industrial brokers, and then industrial sales-leaseback brokers, so it is a very focused subset of real estate brokers. Our founder is one of those specialists. We probably worked with less than two dozen people nationwide in terms of buying and selling within that category.

Worst case scenario, what would happen if the tenant goes out of business? What is the solution to that if the tenant has to leave an empty building?

Industrial is as consistent mailbox monies as you can have. Share on X

The other founder at MAG is a commercial real estate appraiser by trade. He is our evaluation specialist. He is making sure that at the end of the day, are we buying defensible real estate? One term that is helpful to know in general is called dark value. If we are buying occupied real estate, there is a certain value of that, but you want to say, “If I lose a tenant or if I end up with an empty building, where is my dark value?”

I want it to be pretty darn close to what I paid for it. If there is a big spread between what I’m paying for it and what it is worth empty, I’m exposed. First, “I want a near basis level dark value.” I’m very close to the basis that I have on the property. The second is we are looking to buy in tight industrial markets. The majority of what we buy in the submarkets will have less than 4% industrial vacancy.

We are buying 30 to 40-year-old products and that is okay. It is four walls in a roof and it is not exceptionally hard to maintain, but we are buying $50 to $70 a square foot, sometimes even better. A new build is around $200 a square foot. There is a finite amount of supply of this 30 to 40-year-old product. That is less than the replacement value. For that reason, even if you are out in the middle of nowhere, the demand is so high for this type of industrial product that you are usually fairly well protected from downside risk.

Constructing something from scratch would cost more than buying what you guys have access to, right?


In multifamily, a lot of people do cost segregation for bonus appreciation. Is that something that is even applicable for these industrial types of buildings?

We love it. I say we are depreciation junkies. As much as we can get under the current tax rolls, 99 times out of 100, massively advantageous for our investors for us as a sponsor team and full advantage.

I keep talking about multifamily because there is so much information about it everywhere, like podcasts, books, and whatnot. If people were interested in learning more or participating in this space, where do they go and how would you direct them?

We have some resources on our website on There are some larger players in our space that are REITs, like Store Capital or STAG Industrial. Those are similar business models but publicly-traded REITs and they have a lot of public disclosures and information on the space there. Those are good starting points.

Don’t take someone’s word at it. Go to your network, find other investors and go, “Who have you invested within this space? Do you know someone who might have?” Referrals are always the best way to go to get that early, at least a baseline level of trust, then you can build your own due diligence, get to know the sponsor, and learn more about the space and the product that way.

I’m digging that sale and leaseback idea because you are mitigating that risk. Since the risk is going down, so does your cashflow. How does that work in the industrial space? What does a typical cashflow look like on your guys’ syndications then?

It varies. Across the board, we are seeing some compression and cap rates that are stifling cashflow across all commercial segments. In the world, even our tightest cashflow projects will yield at 7.5% cash-on-cash from day one. Most are 8% to 9%. We are able to hit that because we are fully 100% occupied. With that, every year, the lease will include built-in rent bumps.

SCF 28 | Industrial Real Estate

Industrial Real Estate: In our world, even our tightest cashflow projects will yield at 7.5% cash on cash from day one. Most are 8% to 9%.


We know the cashflow is going to increase every year. There is no expense line because of the triple net lease. Cashflow comes in and we pay the mortgage. We always get a real estate loan and then pretty much everything else gets flows to investors. It’s fairly high, consistent and predictable cashflow, which is what these triple net single tenant deals are based around. We will hold 4 to 5 years, do monthly distributions, and then at the end, similar to multifamily, when we sell, we will do return of capital and do a profit split of all remaining proceeds.

If you work with a lot of investors, do the investors you work with find you? Did they come from multifamily first, explore this, and then find this? Do they migrate everything over the triple net lease type of space or do they stay in multifamily and other stuff as well? You see it all, so I’m curious.

It is human nature to resist change and take baby steps and invest in what you know. From what we see, people own a house. What makes sense for your first four into real estate? It is a single-family investment. I know this because I have lived in a house. The second piece might be either actively or passively investing in multifamily.

Most people have either lived in an apartment or known someone who is lived in an apartment. It is a familiar space. Most of our investors will have some exposure in multifamily. As they grow there, they go, “Maybe I’m heavily concentrated in this asset type that tends to be value-add focused. How can I maybe diversify this with a non-correlated segment of commercial real estate?”

That is where industrial is a great way to compliment that. I have a lot of my personal funds in industrial because I know it. I’m close to it, but I complement with multifamily. I like the two spaces. Multifamily are more risky but have a higher upset potential with that big value-add play and industrial is as consistent mailbox monies you can have.

I could tell you down to the penny what our operating account will look even three years from now because there is no expense. I know exactly the money coming in for the rent. I know what the mortgage looks like. That cashflow is hyper predictable and that is an advantageous settling part of the industrial model.

Going back to the types of assets that you acquire, what is a typical price point that you go after and how do you determine what an attorney would get?

We have been able to grow as an investment group as we have brought on more investment partners and grown as a team. Years ago, we were buying $5 million to $6 million properties, but now it is close to $15 million to $20 million is the norm. With industrial, if you hit am upper limit, roughly $15 million to $20 million usually correlates to about 500,000 square feet. There are not that many buildings bigger than that. Very few people need a million square feet. That is a high-specialized building.

If you do want bigger, you tend to start looking at portfolios of industrial buildings. What is nice is you can chop those up in a way that makes sense for your buying power. That is where we are at there. We have plans. Probably in the next quarter, we are going to launch our first fund. We have built up a long enough track record, done enough exits, and streamlined the type of product that we specialize in. We’ll be transitioning over from a deal-to-deal basis to building a fund that will probably hold about 10 to 15 properties. It is all exciting progressions on the space.

Approximately how many deals have you done? Can you elaborate on what you can on the best deal so far?

People love talking about their wins. As an investment group since 2015, we bought about 50 investments. We have gone full cycle on about seventeen of those, so we own a few over 30. One real exciting one is we bought this aerospace tenanted piece of real estate in Mansfield, Texas, South of Dallas. It was our bread and butter transaction.

They were a family-owned business. They were being acquired by a private equity backer and we were buying the real estate at the same time. It was a simultaneous three-way transaction there. We ended up with a private equity-backed tenant, brand new twenty-year lease, and triple net. Our bread and butter cashflow is great from day one.

One cool way that we can build value, we never underwrite for it because it’s out of our control. In this case, we saw a private equity group that was hyper-successful at what they sought to do and grow the tenant. They grew from $15 million a year in sales. Three years later, they were at $70 million a year. They had dramatically grown this company, which adds value to real estate ironically. Now I have a stronger tenant. That means a lower risk of default, I can sell my real estate with that tenant attached at a premium to the next buyer. In that process, they needed more room. We were able to develop and add an additional 30,000 or 40,000 square feet to the square footage on the property.

Quick cap rate lesson: high cap rate typically means more risk. You got to pay less for the same amount of cashflow. Lower cap rate means lower risk. You're going to pay a little more for the real estate. Share on X

We were able to increase rents and dramatically add value for both them, for us, and our investors. It was a big win. We exited that deal and held it for about three. All the checkboxes of interesting ways to build value, limited downside from industrial, consistent cashflow, and paid out monthly are the best parts of this particular asset class.

The stars aligned for that deal. The value of the real estate went up because the tenants’ business became even more successful. That caught me off guard because it has nothing to even do with the real estate, but it does in your space. I have to get my head around that as well.

The quick cap rate, less than high cap rate, typically means more risk. You got to pay less for the same amount of cashflow. A lower cap rate means lower risk you are going to pay a little more for the real estate. When you go to sell, you want to lower cap rate. When the strength of credit of your tenant increases, when it gets to be a better tenant, you’re able to sell at a lower cap rate correspondingly.

To use an extreme example, let’s say I had Joe’s Hardware Supplies when I bought this building and then they got bought out by Amazon. I have Amazon as a guarantor on my lease. That’s about as watertight as you can imagine. That deal might go from a 6% cap to a 3% cap with an Amazon tenant. That is the power of having a very strong tenant. In most cases, it is not that extreme, but when you are able to grow your tenant company and improve their financials, or if those financials improve while you are on the real estate, it drives value to the building as well.

What is your opinion on the space over the next 5 to 10 years?

We have seen a crazy amount of capital in the market in every segment. Multifamily and industrial are no different. We have found we are less competitive in central markets. The Dallas, Phoenix, and Chicago areas, where we used to find opportunity, there is so much institutional capital in there that we get priced out.

The good news is we are able to, especially with our own in-house credit team, find a nice pairing opportunity in the seams. We will find secondary locations outside of 50,000 or 100,000 population cities in the Midwest where you have good quality real estate, strong credit, and privately held tenants, and we are able to still find good opportunity and yield-pairing those two together for our center investors.

The next question is because you are also an investor as well and you started off doing single-family homes because of your military buddies. Knowing what about multifamily, triple net leases, and industrial space, would you start off as single-families again first or would you have done it differently?

I would probably done it differently. I went single-family because that is all I knew. I like the commercial space because, frankly, there are less players in the market. If you invest with the right sponsor who is demonstrated they have a true skillset in it, that still has more value-adding potential and more overall return potential than the single-family space.

Single-family space is a little more commoditized and a little more based on luck at this point that your area appreciates. It is hard to get a good cashflowing asset in the single-family space based on how prices are raised compared to rents, whereas, comparatively, in the commercial space, you are still able to find a more blend of skill and luck when it comes to generating returns.

I have some final questions for you. First one, what are you excited about in your business?

I mentioned that fund. We have been working on that for a few years now. I’m super excited to realize that. It will be a nice blend of maybe taking out the binary risk of a single-tenant property by adding 8 or 10 of them all under an umbrella fund there, still able to generate similar returns from a single deal-by-deal basis. That is probably the biggest move that we are excited about and it has been a long lead up to this transition.

SCF 28 | Industrial Real Estate

Industrial Real Estate: In the commercial space, you’re still able to find a more blend of skill and luck when it comes to generating returns.


This next question is related because you are also a real estate investor. What has real estate investing done for your life?

There are two reasons. One, I’m not tied to an office. I’m in San Francisco, but I have worked from the ski slopes, beach in Puerto Rico, and Munich, where my wife is from. It allows me flexibility. We put boots on the ground on our property for due diligence but by and large, the day-to-day, I’m free to be anywhere.

That opens up my headspace to be creative and efficient in a way that I could not if I was stuck in an office every day. The other piece is I’m building a residual cashflow. Personally, I would like to see myself in a few years where I work because I want to and not because I have to. This investment portfolio is generating my life nugget. I’m paying my bills and I have discretionary income. Anything you do beyond is up to you because you want to. To me, that is freedom.

Are there any big goals that you are working on, either business or even personal?

It is supposed to be a 2021 goal, but don’t tell me. I’m going to publish my first book. I have been working on it for a while. It is more about education but talking about the industrial space, single-tenant markets, and sales leasebacks. They are the underrepresented asset class in commercial real estate investing that we have nice expertise on, and we have a lot to share there.

I’m glad that you are doing that. There is so much in multifamily. I was excited to bring you on as a guest because I don’t know anybody that can talk about your niche. My next question is, “What does success mean to you?”

To me, success means living your life. It is pairing work and life as opposed to slaving away in an office with this hope that when you turn 60, everything is going to flip a switch and be great. COVID opened a lot of people’s eyes. I could get hit by a bus tomorrow or I fly recreationally. Let’s face it. My plane could crash in five years. I don’t know, but if I’m able to pair my personal and work life, I’m doing it in a way that I enjoy it, and I’m good for the people that I work with, to me, that is my success metric.

What is your superpower and what contributed to all your success?

When I was a little, it was because I was tall and I could reach things then. I have accumulated a decent amount of life experience. I would say my superpower is I have been to 112 countries. From a flying background, from a military side, I have accumulated a diversified assortment of life experiences that I can relate to almost everyone on some level. That is something that I could not do 10 or 15 years ago, but something that I have worked for to create a sense of roundedness where you can find something in common with anyone you talk with. I would say that is my superpower.

My last question is, how can somebody get ahold of you?

That is a little easier. You can reach out directly. Check out our website. We have got some great stuff on there. Drop me a line. I love to get feedback on podcasts, talk more, answer questions, or include you in our investment group. You can reach me at

Thank you, Neil, for joining me on this episode. This conversation was like Commercial Real Estate 101. The industrial space was amazing. To my readers, thanks for joining and reading. Reach out to Neil directly if you have any questions for him. Thanks for checking out this episode and also remember to leave a review on iTunes as it helps me attract even more great guests like Neil. Until next time, live life abundantly.


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About Neil Wahlgreen

CRE Sponsor. Raising capital for direct investments into cash flowing NNN operational industrial real estate. Emphasis on mid-market, creditworthy manufacturing tenants. Sale leaseback transactions creating value through institutional leases and long-term alignment with proven tenants.

Core values of integrity, punctuality, and attention to detail derived through background as a commissioned officer and pilot in the US Air Force & Navy.

Specialties: Securitized commercial real estate investments with credit tenants through industrial sale leaseback acquisitions.