Matt Wetzel - Senior Vice President at Bradley Company

Today, we're joined by Matt Wetzel, Senior Vice President at Bradley Company. Matt brings extensive experience in commercial real estate, economic development, and regional growth initiatives across Northern Indiana and Southwest Michigan.

In this episode, we'll discuss the current state of the commercial real estate market, emerging development opportunities, the factors attracting investment to our region, and what business leaders should be watching as our communities continue to evolve and grow.

Matt's insights and perspective make him a valuable voice in understanding the trends influencing our regional economy, and we're excited to have him with us today.

Transcript

SPEAKER_01 0:01

Welcome to Inside the Region, the podcast that explores the forces shaping our local economy. Being brought to you by Old National Bank, where relationships and results matter. Discover what Old National Bank can do for you at OldNational.com. In each episode, we dive into the conversations driving business growth, investment, and innovation across the region. From major development projects and capital investments to workforce strategies, market trends, and data insights, we unpack what matters most to business and community leaders. Now here's your host, Director of Economic Development at the South Bend Regional Chamber, Alison Herzing.

SPEAKER_00 0:37

Welcome to Inside the Region, where we explore the issues shaping our economy and communities. Today we're joined by Matt Wetzel, Senior Vice President at Bradley Company. Matt, thanks for being here.

SPEAKER_02 0:47

Hey, thanks a lot for having me.

SPEAKER_00 0:49

Well, as I I mentioned, uh, you know, pre I always ask, how did you get in to real estate? What was, you know, how did you start? Did you start in 2013 with Bradley? What what's the way you got?

SPEAKER_02 1:02

So I actually grew up in uh the commercial construction industry, uh, my family, and kind of fell in love with buildings and how they kind of fit the puzzle of of growing businesses and community building. And so when I went off to college at Western Michigan, uh studied finance. There we go. Um, studied finance and kind of found an interest in real estate. Uh, I had an opportunity to intern with Bradley Company in 2013 and have been here ever since.

SPEAKER_00 1:31

Yeah. I gotta give my shout out to Western because my daughter's a cheerleader over there. So I, you know, there we go. Yeah, gotta root for him at least for one more year and then she graduates. Always a Bronco fan, though.

SPEAKER_02 1:42

Awesome.

SPEAKER_00 1:43

So you've had a lot going on lately. I want to highlight this. Um, you just received well-earned 40 under 40 recognition. It's a really big deal. You know, can you talk a little bit about that?

SPEAKER_02 1:56

Yeah, so it it was uh awesome and uh accomplishment and uh it felt good and it's like uh a lifetime achievement award. Obviously, I'm not not a lifetime, but that's what it felt like. And you know, 10 plus years of working in the community, building the community, um, you know, it was it was an awesome feeling.

SPEAKER_00 2:14

It's a really nice recomm, you know, recognition, I have to say. The there's you know, hundreds of applications that come in and they're weighted and everything, and it's just you know, to get through all that and you're given that recognition at the very end is really kind of um, you know, an accomplishment, like you said. It's it's a nice opportunity to spend to be with your peers in the community, but also really to kind of showcase and and to congratulate you on that well-earned uh recognition. Another well-earned recognition, you've also just got your SIOR. Uh so can you give us a little information about that?

SPEAKER_02 2:51

Yeah, so SIOR is the Society of Industrial and Office Relators. Um, it's a a small, less than 4,000 uh folks have earned the designation across the world. Um, and so I finally finished that up in April. So that was exciting. It was a kind of a another uh accomplishment over a long period of time in production and in those things. So it was exciting to get both of those done in in 30 days.

SPEAKER_00 3:16

So yeah, you had a big April, I'll tell you.

SPEAKER_02 3:18

It was very busy, yes.

SPEAKER_00 3:19

Yeah, and and it's you know, you kind of you said it's 4,000 people, but it's like really a small number if you think of how many brokers there are out there and to have gotten to that achievement. So congratulations on both of those. Uh, I'm sure you're very happy that April is over, but I hope you took a moment to enjoy those um recognitions.

SPEAKER_02 3:40

I did. And uh uh April was busy, but it it's awesome to look back and and accomplish both of those.

SPEAKER_00 3:46

Yeah, that's great. Well, it'll it's a nice way to kind of jump into what you're here for is to talk about commercial real estate. And so just kind of, you know, do you want to just kind of give us an overview? What's going on in the market right now?

SPEAKER_02 4:00

So I'll start with the industrial markets. Um, you know, our industrial market has been very strong over the last, you know, five or six years. You know, vacancy still remains below 5%. You know, the one thing we did see through the AWS buildup is a lot of suppliers and vendors and subcontractors kind of gobbled up all of the uh available uh vacancy. And so I think we're starting to see a kind of a return to normal. Um, you know, we're seeing more, you know, mid-size inventory, large inventory coming to the market and and and staying for probably what what we would consider you know average days on market prior to the AWS project. The one thing that I think is the big question in in the room is with Microsoft kicking off, do we see that same trend? I think probably a little bit, but on a much smaller level because it's just a different project. Um and then, you know, I do think we have, you know, a lot of good going on. A couple challenges is you know, we're running out of industrial land entitled utilities and in that. And so I think it's something as a community we need to look, you know, forward to is where is growth and what that looks like in the future.

SPEAKER_00 5:16

Yeah, and I'm gonna jump in on that because I do the RFIs for our county as the lead economic development organization. And the percentage of RFIs I cannot respond to because we don't have a building or a site has doubled since I started doing this um five years ago. And so it it's not getting better.

SPEAKER_02 5:37

Yeah, and it's uh it's a serious problem and and something that we think about a lot is um, you know, where is there excess utility capacity? Where could you you know expand capacity and and what direction wants growth, right? And so I think we need to continue to keep pushing forward. Um you know, you don't want to slow down here while we have momentum, but it's definitely an issue.

SPEAKER_00 6:00

Well, and you think of like the inventory sum that we have is kind of older stock and it's a little bit different, you know, 12, 16 foot uh ceilings used to be more of the norm. Now, if you have a 16-foot building, you're not gonna get very far in um that RFI uh competition. And they're really looking for, what would you say?

SPEAKER_02 6:19

They're kind of looking for Yeah, 36 foot plus, you know. Um, you know, you got heavy power, you got, you know, ESR sprinkling, you know, you you're looking for that class A uh in institutional grade building, which you know, we don't have much, if any, inventory of right now.

SPEAKER_00 6:35

Yeah, we get so excited when a building comes online. It's it's a little ridiculous. And apparently we also need a little bit more excitement in our life. But I have to say, I mean, it's true that, you know, the the inventory that we have, a lot of it is older, good for a startup, maybe, as they're starting to kind of you know figure out where they're gonna be in the market. And we have some of those opportunities around South Bend, but um as we look at the broader need, it is uh time and again, we just do not have that inventory. What would you say was the sweet spot for square footage?

SPEAKER_02 7:08

You know, right now, um I think we're seeing a lot more activity in that 50 to 100,000 square foot range. Um, you know, there were a couple larger facilities, 200,000 plus, that sat on the market for a little bit of time or more time than expected. And, you know, there are those users out there, but I think we're seeing most of our local activity in that 50 to 100. And then, you know, your kind of regional or state leads are coming in on those bigger projects.

SPEAKER_00 7:36

Yeah, and you look at the business size in our area, and it really does kind of lean towards that smaller business. Um, I read something that, you know, the average number of business um business size in Indiana was something like 99.4% or something was under 50 employees, under 100 employees. And so they're not gonna probably be getting a 200,000 square foot facility. They're gonna be getting that 50,000 square foot facility with hopes to build out, to um, you know, grow, but initially coming in in that 50 to 100. And what I'm seeing a lot is individual uh RFI is coming over looking for single tenant. And so we do not have a lot of single tenant, 100,000 square foot or 50,000 square foot. We have multi-tenant, but you know, is that something that you see maybe will be developed or how you know?

SPEAKER_02 8:27

I think that is a huge kind of gap in our market. One of the bigger issues uh right now are construction costs and the ability to build that size building and be able to offer it at a competitive rate. And so that has been a challenge probably since I was in this industry or started in the industry. But definitely you see that now that we have raise rising uh per square foot rates, we're starting to close that gap, but we still definitely have a gap there.

SPEAKER_00 8:57

Yeah, and you know, when you talk about some of the suppliers um that came on for AWS, you know, not often are they looking for 200,000 square feet. And so any available that we had was more is more challenging right now. We might see some of that come back on the market, but um, you know, sometimes just sitting around crossing your fingers isn't really a marketing space. Yeah, it's not a solution, right?

SPEAKER_02 9:19

Um, and it is it is amazing, you know, um, there are a lot of electrical subcontractors, vendors, and those folks that took 50 or 100,000 square feet at the in and that is kind of our prime, you know, business unit growth uh space as as well. So um I do think we'll see some of that space back. It's just a matter of if those folks stay on for for for Microsoft and what that looks like and moving forward.

SPEAKER_00 9:44

Yeah, AWS, you know, coming in at probably about 14, 15 billion dollars. They were initially were 16 billion buildings that were gonna be 11 billion. We're gonna potentially have 30. So doing the math on that, you know, they're still working on the south side of that project, which is a significant um, you know, build out that's still required. But Microsoft coming on, um, don't have the final numbers on that, but it's gonna be eight buildings. So that's gonna be still um a good size project, and we're gonna probably, what do you think, still have a tight inventory?

SPEAKER_02 10:16

Yeah, I I think definitely in that the smaller size range. Um and it'll be interesting to see if if they have their own suppliers or different suppliers than the other project, or if some of those people, now that they're in the market, have a competitive advantage and are able to continue and stay on longer term.

SPEAKER_00 10:32

Yeah, that's a great point. Something I hadn't thought about. So, you know, we talked about industrial. Let's pivot over to office space. We heard a lot about office, you know, with COVID. Everybody's kind of you know, worked from home. What are you seeing? How is is office starting to stabilize or yeah?

SPEAKER_02 10:49

So uh I took a little poll around the office today to get uh everyone's take of where the office market is here in 2026. And I think we still see a challenge in downtown South Bend. Um you you saw a huge flight to quality and maybe flight to where people live to Edison Lakes uh during COVID and and even since. And so I think that submarket in Edison Lakes is nearly, you know, maybe 10 or 15% vacancy and and strong and and where you'd consider a strong, healthy office market. Downtown South Bend still struggles. I do think you see a lot of multifamily projects coming along, as well as the city being proactive with the RFP to uh demo the Prescani campus and take some office inventory out of the market. And I think that will that's good and will help kind of uh solve some of those uh large vacancy issues.

SPEAKER_00 11:47

Yeah, we have JC Hart um, you know, purchase the Crow building. And so they're doing uh 290 unit luxury units over um right next to Prescani. So that's gonna be a nice area once that's uh you know, in five years or so when that's kind of all comes to fruition. I think parking too is some of the challenges. And really, South Bend is um right now putting up, you know, if you look around Madison Lifestyle, there's gonna be some parking there. They did parking over by um the hospital to address some of the kind of shifting of spaces to make it work for Madison Lifestyle. Um, you know, what do you think? Is that is that part of the issue?

SPEAKER_02 12:24

So I think everyone talks about parking, but in reality, I think having a parking problem is actually a good thing for a city. Yeah, it means that it's alive and there's people there. You know, we're gonna see a huge change in the dynamic of the north side of downtown with uh Beacons Tower, uh Madison Lifestyle, as you said, JC Hart, Notre Dame Tech and Talent, as well as the Colfax Corners, you know, kind of high-tech office building. And then if the um Seven Diamonds and their uh Morris Performing Arts project comes out of the ground, that will have parking too. But so I think that that that landscape's gonna change quickly. And parking potentially could become an issue and constrained if all of those things come out and are successful and are running. But I I do think parking is a good problem for a city to have.

SPEAKER_00 13:15

Yeah, that's a great perspective and something, you know, you often kind of it's when you go on that interview and they ask you what your greatest um weakness is and you really give them your strength. Um, it's you know, kind of, you know, not having enough parking is potentially saying we have a lot of people coming down and experiencing downtown. We have some really great restaurants and different things that go on downtown to try to bring people down into the area. Now you add this different multi-um-family housing, which is really gonna add to it. And I think there's uh, you know, with the Notre Dame um investment over at the former Tribune building, you mentioned it, the Tech and Talent Colfax Avenue project. That was um, I think they're projecting 400 uh jobs for that will be um added in there. And I think that's really gonna transform downtown.

SPEAKER_02 14:00

Yeah, I think the you know, as much as going as on downtown on the north side is as you have a huge investment on the south side of downtown too, as well, with the ballpark and um Diamond View, which is another 150 units, and then uh you have the project at the corner of Western and South Michigan, which is another 60 units. And I think if you actually go through the numbers, I think it's probably close to a thousand units are in the pipeline, which should really transform downtown from you know north to south, east to west, you know, and it should be an awesome, you know, next couple years to see.

SPEAKER_00 14:35

And it's not just South Bend. I I I want to make sure we highlight some of the great stuff going on in other areas of the county. Um, you know, South Bend has a lot of industrial as well as multifamily, but Mishawaka has quite a few projects that are coming on as well.

SPEAKER_02 14:48

Yeah. So, you know, the uh the big headline project is Microsoft, but also if you think about kind of that north side of Mishawaka and and connection to Granger, Gurly Leap just broke ground on a you know $200 million project, which should kind of transform that northern edge of of uh of Mishawaka. Great Lakes Capital just broke ground on Grandview Phase Three, which is another 250 units in uh 50 townhouses and a hotel. Um, and then I think you'll see a couple more multifamily announcements up in that neighborhood, you know, relatively quickly here. So lots of activity going on, you know, all across the county for sure.

SPEAKER_00 15:29

So you mentioned Girly Leap. I want to just kind of say, so what is your thought on Grape Road? We're gonna have some anchor um establishments, you know, being consolidated over to the new Girly Leap facility. I do want to mention that that is not property that they own. Um, and the new site is uh gonna be owned by the Girly Leap organization. So um what do you see there? You see some redevelopment opportunities?

SPEAKER_02 15:53

Yeah, I think it's gonna be a combination of um adaptive reuse of some of the facilities as well as you know, uh redevelopment of others. You know, I actually worked on a project just like this in Fort Wayne five or six years ago of another automotive campus. And the concern was what backfills it. And it was backfilled by, you know, any and every industry. And and I don't so I don't view that as a concern. I actually think that is an awesome opportunity for the city of Mishawaka to kind of reimagine what that corridor looks like at really what their main and main of their retail corridor is.

SPEAKER_00 16:29

Yeah, and expand their um revenues, their tax revenues, because they're still now they have the Girly Lee project that's as you mentioned going to be substantial. And now have a new um organization or you know, different, uh multiple come in. And so um any way you can start expanding the revenues for your um city is really going to make a difference for your residents and your community overall. So I'm I'm really kind of buoyed about that. You've got a lot going on around the river, too. There is a few um uh a multifamily that came on down there. There's the mill, and then there is the mill phase two and some other stuff.

SPEAKER_02 17:06

Yeah, and uh as as you go down the river, I think there's two or three other multifamily projects with you know the the mill phase two and um oh I know Avalon, the Avalon. Yeah, Avalon and uh trying to look at my notes here. There's so many different projects to talk about. What a great problem it is. I know it's crazy, isn't it?

SPEAKER_00 17:23

Four years ago, we never would have had this problem. It would have been like, Matt, let's talk about the four projects we have going on, and we'd be done in three minutes and have nothing going on. There's so many different things. And you know, Bradley is really part of a lot of that.

SPEAKER_02 17:37

Yeah, you know, the the cool thing is uh all of these projects are have such long lead times and uh you know it it feels like it you take years and years to get from you know a vision to reality. And you know, over the last five or six years, it it feels like the you know, we're just on the gas pedal. And if we go a week or two without another announcement, it feels like what happened, we're slowing down. And in reality, the pipeline of projects is is stronger than ever.

SPEAKER_00 18:03

Yeah, Jeff and I joke about it sometimes that you know we get a project that's looking at our area and they're you know 40 million and we're like, oh, you know, yay, you know, a smaller project. We're excited because we keep having these higher value ones come in that are just to your point, multi-year. They take a um a long time to get over the finish line. Those smaller projects are kind of nice because they they come in, they get done real quick, and you can see that um, you know, end result relatively soon after the project begins. So it really kind of is a nice like boost after being on projects that take years to get across the finish line. Yeah, definitely. Yeah. So um gonna pivot back over to kind of the industrial side of stuff. What, you know, when you guys are working with site selectors, what what are you hearing? Because it used to be do you have the acreage? And I'm sure you're still hearing that, but are you hearing anything else?

SPEAKER_02 18:55

So as you talk to site selectors, it seems like everyone else or everyone is in a accelerated time frame now, right? And so you need to have all of your environmental answered, all of your uh, you know, what city water, sewer, your your gas, your electric, all of these things answered, where, you know, historically, you know, a site selector would come to town, would like a site, and you'd spend uh a year and a half in due diligence working through all these things. I just don't think that's what what we're gonna see, you know, going forward.

SPEAKER_00 19:27

Yeah, we're seeing it too. It's kind of the um, you know, one of the first questions I get uh interestingly now is how receptive is your community to economic development? And it it doesn't have to be a data center, it just has to be just a general question because there's a lot going on in the news. Um, not to say I don't get that question about acreage and utilities right away. Labor force is always something as well. And so I know um our team and uh you know the Bradley team have worked on a few projects where we kind of have to highlight all those different things that are going on. We're fortunate we have great partners in the uh community between our utilities, um, able to come in and have those conversations. And, you know, we've had um some really good successes.

SPEAKER_02 20:09

Yeah, definitely.

SPEAKER_00 20:11

So I gotta say, is there is there one you drive by that you're like, yeah, I was part of that.

SPEAKER_02 20:17

So I was actually thinking about that on my way here today of what what project that had recently been completed that is gonna be cool or transformational. Uh and I'll give you one big and one small. And I guess the small is not really small, but in you know, in perspective, you know, we do I I spent five or six years doing the land assembly on the Grid Elite project and the road and and all these other things. And so it's very cool to see that project finally break ground and come to fruition. The other other one that we're really excited about is as a team, we we helped Habitat acquire the trailer park at the corner of McKinley and Fur, which has finally been vacated and and we assisted um with the relocation of those resident residents. Um and to see that neighbor, a new neighborhood come out of what was you know, blight to a community will be really, really cool and and how that, as well as Habitat's new office on McKinley and new construction building and all this will kind of transform that corridor.

SPEAKER_00 21:21

I love that. I didn't realize your team was working on that, but I'm not surprised that you were. Um, you know, it's so great because those individuals that live there, the few they they were all able to find um new housing, better housing, a better situation for themselves. And so um, you know, now we're gonna have a great um new development, as you mentioned, there for additional individuals to move in and and really kind of have the homes that they deserve. So thank you for for working on projects like that. That's really um interesting to see that you guys did Girly Leap and that one as well. So he's more than just industrial folks. He also does land assembly.

SPEAKER_02 22:02

So yeah, the land ones are just more exciting to talk about, right? The the industrial ones are actually uh, you know, I get more, you know, into the weeds and and are are cooler to me, but you know, just not not as exciting, probably to talk about.

SPEAKER_00 22:15

It's hard to get excited about 36-foot ceilings with eight-inch reinforced concrete behind.

SPEAKER_02 22:19

Hey, I'm there.

SPEAKER_00 22:20

Yeah, I'm I'm often, you know, Matt and his team must love me because they're my go-to when I have questions about certain things. Hey, do you know? Could this happen? And I have to give you all credit. Thank you very much. You're you're all very good about getting back to me. So I do appreciate that. I would say looking forward, here's our last question. You know, what do you see? Like what, you know, are you excited about in the next year or two?

SPEAKER_02 22:43

You know, I think we're we're excited to continue to see, I think we'll see a lot, um, you know, continue to see project announcements of, you know, multifamily and all these things and in all across the community in South Bend and Mishawaka and Granger. So I I think we just continue to to pick up the momentum and push it forward. I don't think there's going to be any, you know, blockbuster. I think we're back to block and tackle and and pushing things forward, but we're really excited of where we're at for a community and and what's to come.

SPEAKER_00 23:12

Yeah, I agree a hundred percent. Well, Matt, thank you for coming in today. Thank you for spending some time talking about what's going on in the commercial, industrial market. We really appreciate your insight.

SPEAKER_01 23:22

Well, thank you very much for having me. It was a great time. To learn more about the South Bund Regional Chamber and explore our interactive data dashboard where local economic and labor market data comes alive, visit sbrchamber.com. A special thank you to our sponsor, Old National Bank, where relationships and results matter. Discover what Old National Bank can do for you at Oldnational.com.