Developing Small Bay Industrial Flex Space in Dallas | Carrie Moore

In episode 3 of the Flex Space Network Podcast, host Hamza Ali sits down with Carrie Moore, a developer and member of FSN (Flex Space Network) who is currently developing a 70,000+ square foot office warehouse and small bay industrial project in the Dallas–Fort Worth market.

Carrie shares her journey from working as an oil and gas engineer to becoming a flex space developer, and explains why she shifted away from single-family rentals to focus on flex industrial real estate. She breaks down how she identified the opportunity, purchased land, and began developing a multi-phase small bay industrial project designed to serve local service businesses and contractors.

In this conversation, you'll learn:

• Why flex space and office warehouse properties are outperforming many traditional real estate investments
• How Carrie transitioned from single-family rentals to small bay industrial development
• The strategy behind phased flex space development and how it reduces risk
• How to identify the right tenant profile for flex industrial properties
• Ways to validate demand using simple marketing tactics like Facebook ads
• How developers finance flex space projects with debt and equity partners
• Why the Dallas / DFW market is one of the fastest-growing hubs for flex industrial real estate

Carrie also shares practical advice for investors who want to break into flex space development, including building your network, working with cities and municipalities, and developing the capital relationships needed to fund projects.

If you're interested in flex space investing, office warehouses, or small bay industrial real estate, this episode offers a real-world look at how developers are finding opportunities and building projects in one of the fastest-growing sectors of commercial real estate.

About the Podcast:
The Flex Space Network Podcast with Hamza Ali explores the rapidly growing world of flex space, office warehouse, and small bay industrial real estate. Each episode features investors, developers, brokers, and operators sharing strategies, deals, and insights into this high-demand asset class.

Subscribe to stay up to date on the people and opportunities shaping the future of flex industrial real estate. 🚀

Transcript

SPEAKER_01 0:01

Hey guys, welcome to the Flex Space Network podcast. Today is episode three. Very exciting. I'm here with Carrie Moore. She is once again a member of the Flex Space Network. She's actually been around with us uh for a while. Welcome Carrie, thank you for being on. Really appreciate it.

SPEAKER_00 0:18

Thanks for having me on. Excited for it.

SPEAKER_01 0:27

Yeah, absolutely. Alright, um, so Carrie Moore is a developer. She's currently working on a project in Dallas, Texas. And we're gonna discuss it. We're gonna, we're definitely gonna get there, we're gonna talk about it. Uh, but really, what I really want to get started with, Carrie, is just give us a little bit of background, who you are, where you like, what is your professional background, where did you come from, and how did you get started in the world of flex?

SPEAKER_00 0:52

Sure, sounds good. Um, hi there again. Uh Carrie Moore, I actually have a background in oil and gas as an engineer. Uh and we actually, uh, being an engineer in oil and gas, we work in we get the unique opportunity to work on a lot of economics, development optimization, acquisition into vestiture. So, how did I get into real estate? Is that we had a side business for years with single family residential, not from the ground up, rentals. And about five years ago, I started looking at other real estate vehicles that would have a better return and a better return on time. And uh at that point looked into some midterm rentals and got into that a little bit and had an opportunity to take a property and uh you know kind of 1031 into land and talking with a some you know local broker and developer, they brought up Flexpace. And I thought I really took a deep dive into FlexSpace, and we started developing and looking into develop the land that we had purchased, and realized a lot there was a lot um I didn't know what I didn't know, and uh found your network and uh the the wide range of backgrounds and information that can be shared within the network, and here I am.

SPEAKER_01 2:19

Alright, well, you know, that's uh we've been having conversations for so long. This is the first time I find out that you you were actually an oil and gas uh uh person prior to getting into real estate. So, I mean, okay. So you've dabbled a little bit in single family, um, and then you made your way into land. Give us the and and obviously you also mentioned that you know it was a time thing. Give us your honest feedback. You know, I obviously preach a lot about get away from residential, do flex space, and people look at me, and you know, some people are like, yes, you're right, but the bulk of still, the bulk of my audience is like, you're wrong, this is the worst thing ever, right? So, like, walk me through your journey from single family to flex space, and then walk me through how I I would personally counter like argue for residential real estate or against real residential real estate.

SPEAKER_00 3:11

Okay. Well that's a great question. And I think it's you know, know yourself too, right? I mean, you need to know what what things are you willing to take on, um, what what time things and what headaches are you willing to take on, and what risk are you willing to take on within each of those. And I think it comes down right now, uh, you know, looking at single family right now, I definitely, of course, there's opportunities everywhere in every real estate. It goes back to can you buy it right? It goes back to oil and gas too, right? Can you buy it right and what's your commodity price? Meaning, or what can you rent it for? And so, yeah, there's opportunities in single family, but I just see the higher returns right now being in development and being in flex space and going back to the time portion of, hey, I can get into flex space, I can develop this, we can make good and higher returns, and not sacrifice, you know, I'm willing to put in the hard time and work, but but being able to do that and having you know the same or less time on the single family residential side.

SPEAKER_01 4:19

Yeah, I mean that's real I think a few things that resonate here is also I think there's a tax consequence that you get with flex that you may not be able to get with single family, and I think that's a big one for a lot of us.

SPEAKER_00 4:32

That's true, that's true. Good point and good reminder.

SPEAKER_01 4:37

Yes, of course. So, I mean, okay. Um walk us through your development. Tell us what you're doing, what you're you know, what are you currently building, and walk us through the land specifically. Like, is this the land that you had bought specifically for Flexpace or um the one that we discussed within the network, or was the land that you 1031 into a separate thing and then you somehow acquired this deal?

SPEAKER_00 5:02

Right. So this is the original land we purchased, and the land we purchased to do flexpace on. And you know, we were fortunate uh learning afterwards a lot of your metrics. Fortunately, we checked the boxes as far as price and different aspects of the land. It's 5.4 acres, and it is um it is within a small city, and there's pros and cons to that. We have sewer available, uh, we have no issues with utilities, but you go through some it takes more time than if you were saying in the county. Now there's a trade-off, of course, depending on where you are, on what you can get for rents. Um and so we are building 28,000, it's gonna be a phase development, a two to three phase development. We're doing phase one, it's 28,000 square feet. Um we it's all metal, and we do have glass door front. Um, and we will have uh within each of that what it'll be three buildings of six units each, um each being um divided down as uh small as 1,500 square feet.

SPEAKER_01 6:16

Okay, walk us through what you mean by phase development exactly for someone who's just hearing this for the first time.

SPEAKER_00 6:21

Right, sure. So we have this large, you know, I won't say large, but uh, you know, uh a piece of land that we can build somewhere to 78 that 70,000 to 80,000 square feet total, but not wanting to build that all at once. And again, there's pros and cons of each of that those approaches. Our approach was let's do phase one, um, which is three buildings again at 28,000 square feet, um, let's get that stabilized, and then we can also use that equity then into turning into going into phase two and possibly then a phase three, depending on how we want to split up and how rapidly.

SPEAKER_01 6:55

Okay, and what are some advantages of of like having a phase out development versus building it all at once?

SPEAKER_00 7:02

Sure, I mean you're it's you know less less upfront capital and you will, you know, less upfront capital. Um also you can, you know, one of the advantages too is that you have, you know, yes, you have a plan going into it, but you have flexibility learning from phase one as well, saying, hey, a lot of people are now asking for this type of a product, and do we want to change a little bit with sizing? Um, do we need to add some outdoor storage yards with it? Um, and you know, in subsequent phases if there's opportunities for that. Um, and so just having more of that flexibility there, and again, just not having the whole upfront capital cost where you where you're sitting there having, you know, taking a little bit longer time to lease.

SPEAKER_01 7:43

Yeah, totally makes sense. Um, so basically what you're saying is you build out a little bit, lease it, stabilize it, get that taken care of, and then you move on to the next one, and that way you're sort of de-risking yourself.

SPEAKER_00 7:55

Right. Yes.

SPEAKER_01 7:57

In all different terms. Well, that's pretty good. By the way, 70,000 square feet of flex is considered a large, uh large flex space development. So for sure, you are in the larger, like, you know, um player or larger, you know, development game for sure, compared to a lot of uh a lot of people who are gonna be listening to this podcast. So um, you know, I mean, obviously, let's just assume, I don't know, a hundred bucks a foot just to like, you know, keep things, keep the math easy. You're talking seven million dollars of flex space development, um, and this is in one site, right? Um, what a lot of people, I guess what a lot of people would question here is that, well, I could buy, I don't know how many single-family homes you could buy with that. Uh probably, I don't know, hundreds, maybe, I don't know, fifty at least, maybe, depending on, you know, the price point. Um, why would you concentrate that much capital in one development versus like spreading it out uh into these like you know smaller sort of other types of real estate?

SPEAKER_00 9:00

Sure. Um, I mean in any real estate you can manage your time with good processes and everything, but at the end of the day, if you have hundreds and hundreds of doors versus I'm going to have, you know, less than, you know, at max 60, you know, and perhaps less if people lease out more of that. And a lot of and really you're gonna have just a lot less phone calls. You know, a lot of these times you're having triple net leases, meaning that they're taking care of a lot of their own uh maintenance. Um and and again, that's an agreement and the lease as far as there's some things you know you don't want them to take care of, but they're you're not getting the phone calls. These guys are professionals, they have businesses to run, they need a space, and they're not you know, they're not gonna call you to change a light bulb.

SPEAKER_01 9:47

Um so it's it's a very in many cases that's on them, right? Um so walk us through the higher return. And the higher return, obviously, those are both things that are important. Um walk us through who your tenant profile is. Like when a lot, you know, a lot of people who don't know what Flexpace is, or even maybe people who know what Flexpace is, often hesitate to understand who is my tenant profile and how do I figure that out. So, how how did you figure out who your tenant profile is for your development?

SPEAKER_00 10:18

Right. So uh, yep, so what we did is per your recommendation, we ran Facebook ads, and we've got a lot of feedback on what type of tenant we're gonna have. And again, that will be unique to each uh location. Some are gonna be um higher end, you know, higher end flex space, some will be very basic, bare bones. We uh we're kind of a middle product as far as looks and cause you know, cosmetic look of the buildings, and that really works for us because we are truly a flex space. We've gotten contacts from contractors, from pool companies, from um outdoor companies, from uh nonprofits, from um I mean you name it from all sorts of different service providers, um, as well as more sports facilities. And we have this whole range that really appeals to a wide variety of things. And where, you know, again, we're building a large, we have a large footprinter, we'll have that. And again, uh fortunately that's tied with one of your recommendations as well is hey, be beside large neighborhood developments, be where a lot of growth is going. We've got, you know, there's billions of dollars being poured into, you know, less than a mile a mile away from where this location is. Um and and so that that really ties into the tenant profile we're gonna see as well to provide for all these homes and businesses that are going in.

SPEAKER_01 11:46

Okay. Um how are you funding your deals? Like what exactly is the mechanism that you're using in order to get this deal through the finish line?

SPEAKER_00 11:57

Right. Right. So we have, you know, we've put up, of course, invested in some of our own. We'll have uh we will have about 70% debt, um, and then the rest will be you know equity partner or partners.

SPEAKER_01 12:15

And the debt's coming from a local bank, regional, or is it a big bank, how or is it a credit union? Who lends for flex?

SPEAKER_00 12:24

Right. So we talked to uh multiple local banks, and uh some lend on this this product, uh some do not, some want to see preleases, some don't. We actually found the best situation for us was to go through a local broker that has a lot of connections, um, and that it's a their client that they've connected us with is gonna be a larger um my uh kind of regional bank.

SPEAKER_01 12:55

Yeah, I think that's I think that's great. I also think that Dallas is a very strong market, just like you said, like you know, there's so much money being invested in Dallas right now. Um and in my personal opinion, I think right now it's probably the number one market for flex altogether, just because it just links so many different things, even logistically, uh within the country, it just totally makes sense. Um okay, let's talk about vision, let's talk about strategy. Obviously, now you're in flex, you're you know you're getting sorry, Hams.

SPEAKER_00 13:28

I think we had a timeout there.

SPEAKER_01 13:30

Yeah, no worries. Um so um let's talk about your vision, your strategy for the future. Uh obviously, you've been in real estate for a long time. I'm assuming you want to continue to be in real estate for a long time. So, what is the vision with your developments?

SPEAKER_00 13:45

Yes, uh great question. Um, yeah, so you know, my vision is to continue to provide a um, you know, look, I look up land and where the next market is for flex space for fun and on a daily, you know, a daily basis in my spare time, in my free time. You know, I analyze the markets, I analyze um, you know, different land and reaching out and talking to a large network. And so, you know, my vision would be um to re to repeat, you know, repeat this process. I've learned a lot of things, um, I've learned some not what things not to do, and you know, but also learned what uh value this flex space can bring to people who jump into it.

SPEAKER_01 14:34

Okay, so give us some markets, give us some direction, like where where are you heading next?

SPEAKER_00 14:39

Well, to your point, I mean DFW has there's lots of pockets where you've got this, you know, you've got large industrial fill facilities and you have office space and you have nothing in between for all those those businesses we just discussed. And so there's definitely, you know, uh north you know, north of Dallas is really growing leaps and bounds, the infrastructure's there and it's you're it's getting there very quickly. Um, you know, there's you know, there's other markets, you know, one one thing is while I you know there's always a debate between can you do this locally, can you do this long distance? And so I have been actually looking in some South Carolina markets um that may have, you know, again, I'm trying to look at where's gonna be that my highest return.

SPEAKER_01 15:31

Got a little piece of dust there. Well, look, I mean, I totally agree. I do think that the Dallas market is, you know, there's plenty of room basically to grow, and that's a great thing. Um what like if if you were to continue developing flex, right, and you obviously want to, what are some things that you need, what are some things that you have, and uh, you know, like what is the next plan? Like how how quickly are you growing, or what is the next step?

SPEAKER_00 16:08

Right, so I I think the next step, um, you know, and this is you know, for legal things, we'll say no no solicitation for educational purposes only. Um, you know, but for me it's it's growing the capital sources, the capital relationships, the capital pipeline. You know, I see all these opportunities, and so it's growing that piece of it. Um you know, we've got a shovel ready, almost shovel ready project that could be ready to go in in April. Um and so that would be, I guess, a learning too, and a recommendation for anyone looking is you know, the question is, hey, do you get the do you get the deal going first or do you get the capital going first? The answer is yes. Um I would that would be deferred defer to you on your comments on that um as well. But I think that having you know, learning would be having spent uh more time on that just because you know we had a you know, we've got a situation that we uh had everything lined up and a personal situation came up with the other party, and now we've got a project that um you know we're we're having some good conversations on, but um there's potential delay, and that hurts IRR and and so forth. So uh that would be the next step is to kind of develop um that aspect more robustly.

SPEAKER_01 17:24

Yeah, look, I think I think you bring up a good point. Raising capital is a huge part of the puzzle. Um it's you know, someone has to do it. The operators obviously want to operate, the capital raisers want to capital raise. Um, and some of us we do it all, you know, like we are the person who's operating, and we like I myself personally am the person who's also raising capital, right, for my own deals. So it is it definitely does uh excel accelerate um you know where you want to go and which direction you want to go. I think look, I think um uh it's definitely doable. I mean, people definitely are are more getting more interested in investing in flex. And what I've learned more recently, actually, is obviously I'm big on marketing, so I study the marketing aspect probably more than the business aspect of any business. Um, and by you know, just historically, I've just been a marketer uh for product, for investment, for whatever it is, um, and the business somehow ends up seeing you know run run itself. Um what I'm noticing now is that there's a huge LinkedIn community that we didn't have literally six months ago, um, and they are really active in the world of flex. And also, uh, I'm learning that there's a lot of new events that are happening outside of you know the event that I annually host. Um, and I think they would that those would be great catalysts uh for capital raises. It seems like there's hundreds of people going to these events now, and so the market is really uh seems like maturing almost uh right in front of our eyes, and that's a good place to be, I think.

SPEAKER_00 19:01

Yes, it's moving quickly for sure, yes. And I know you've highlighted some some events and some opportunities for you know to provide um information to people and also have this open up some conversations.

SPEAKER_01 19:16

Yeah, for sure. And then obviously we have our event coming up hopefully end of the year. This one's gonna be big. This one's gonna be uh much larger than our uh past event, so I'm really excited to see what my team comes up with. Um well, Carrie, great talking. Oh, before we go, okay, piece of advice. Somebody wants to start in the world of flex space today, young person, me, maybe when I was younger, 10 years ago, let's just say, right? I want to start in the world of flex. Now that you're in it and you're in pretty deep, what would be uh your your honest advice to somebody who's looking to get started?

SPEAKER_00 19:53

Okay, alright. Um I would say tell everybody what you're doing. Start communicating it. Don't don't be afraid of that. Uh also talk to as many people as you can. If everyone's giving you the same you know advice on what I'm being silly, but what garage door to get, that's the garage door to get. If ten people get give you ten different answers, then you know it's unique to your project. Um, you know, if you can um make don't be rash, but you know, be take your time in the due diligence of your land, take your time in the underwriting, but don't get hung up on decisions that are not big decisions, because there's gonna be decisions you don't even know are decisions. And know understand that you can change that light fixture probably later, you know, so that your architect can get move on and get going. So understand and talk to a lot of people. Hey, what decisions do I need to spend more time on? What can I move quickly that's hanging up the process? Um, don't be afraid to talk to the city. That I know that can be intimidating, but and and don't be intimidated even if the initial response is negative or they're not sure about it. We went we we went from the city and planning and zoning and town council to hating our project to loving it and really supporting us. Um so yeah, I would say get your capital pipeline in there, uh, understand how that's gonna be, and that goes back to talking to everybody, um, communicating that more, and then if you can, and it works out on your underwriting, your due diligence, build in the county if you can, but there's benefits to building in a city too, uh, from a utility perspective. So wage your pros and cons and just and and join, make a network, make connections. You know, it's the cliche, but it's true. Real estate is a team sport. You know, real estate is a team sport, and so people are not your competitors, they're your partners. And so partner with people, talk to people, partner with people not like you. If you're detail oriented and will never get anything off the ground because you're you want something perfect, deal work with someone who you know is is more you know um ready to jump in. If you're someone who flies by the seat of your pants and you're gonna miss critical details, partner with someone who's detailed. So or surround yourself with those people in your whether it's your civil engineer, your architect, your project manager, whatever that looks like. So that's a lot, Hamza. But I would, I'm passionate about it and I love to share. People have helped me. I want to help anybody I can. So yeah, you've been generous with your time. So many people have been generous in the network. And it's it's been a a great thing to be part of.

SPEAKER_01 22:26

Alright. Well thank you Carrie really that was honestly like pretty good advice to anybody who's looking to get started. I'd say yeah I just echo everything you said. It totally makes sense and it's you know uh definitely a lot of things I think are you don't think they're decisions until they're actual decisions and you have to make them so it only it only a developer can understand another developer I think you know uh it was good having you uh thank you once again for being here at the Flex Space Network podcast and I look forward to seeing you in the network.

SPEAKER_00 22:59

Hey Hamza thank you for the opportunity to be on the podcast I appreciate it thank you for sure take care bye bye