Q&A with YP’s New Research Director Steve Triolet
Commercial real estate research veteran Steve Triolet joined the Younger Partners team recently as director of research. We sat down with him to learn more about how he developed his knack for sniffing out CRE trends in DFW.
YP: How did you land in commercial real estate research?
Steve: My first job out of college was for a small research company (Parks Associates) that tracks home automation, advanced security systems and home network technologies. Early adopters of these emerging technologies were typically high-end homes and some commercial properties. That’s where I first started learning about research as a professional, which later led to commercial real estate research. I cut my teeth at Costar as a commercial research analyst right after the dotcom bust in 2000.
YP: How did you wind up at Younger Partners?
Steve: Outside of following Greg Grainger wherever he goes (I worked with him at CBRE and JLL), my career has mainly been about elevating brokerage research operations. When I started at CBRE in the early 2000s, most researchers were junior brokers in training. They’d learn the market and business by working in research for about two years then move on. This model works well from a brokerage perspective but is less than ideal from a research perspective (as soon you reach a certain level of expertise, you change roles and a new, typically green person replaces you). At CBRE, I helped create a more sophisticated research department, where research professionals could be the backbone of the department (there were still interns and junior brokers in training, but also career research professionals). I was at CBRE for about 6.5 years and then JLL recruited me away to head up their local research department. I was at JLL for 7.5 years, when Xceligent made me an offer I couldn’t refuse. Unfortunately, they went out of business less than a year after I came on board, but that opened the door for my opportunity here at Younger Partners.
YP: What is your role here?
Steve: I try to supplement and support all the lines of business with market knowledge and thought pieces on the state of the market. Every one of us here is in the information business, just from a multitude of different facets (land, office, industrial, etc.). Our clients hire us primarily for our expertise in commercial real estate and our knowledge of the market (and stats to back that up) is a foundation for that.
YP: What do you like most about crunching numbers and doing research?
Steve: I’ve been tracking and reporting on commercial real estate for over 18 years now, so I feel like I know the office and industrial market just about as well as anyone, but I still learn new things on a consistent basis. New technologies and trends come along, that you have to keep on top of (coworking is a current example).
YP: Do you have any hobbies outside of work?
Steve: I do a fair amount of hiking when the weather allows. I’m also an animal lover; my kids have a little menagerie of lizards, turtles and toads that we caught over the past few years from our “nature walks.” I try to check out all of the various nature preserves around the Metroplex, the City of Richardson is currently expanding the Galatyn Nature Preserve which is within walking distance from home.
YP: What’s going to be the trend/story of 2018 commercial real estate in DFW? Why is that the story?
Steve: Several things point to the local market entering a transitional period. Over the past five years, things have been incredibly great, but there are a few things that point to a transition to good, but not great over the next year or so (the construction pipeline, rental rates and sale prices). Longer term, a downward shift is needed if we want Dallas to remain a lower cost destination for companies looking to relocate and/or expand here (rates for office and industrial properties, for example, at are all time high and far beyond previous cycle peaks).
YP: If you had to bet on a CRE industry sector to outperform the others, which one would you pick? Why?
Steve: Industrial is the canary in the coal mine. Let me explain. Industrial is the market to watch the most, it has slightly less risk than office, retail or multifamily because the construction time for industrial properties is less than for the other property types. A very large industrial building can be built in 9 to 12 months, while a typical office building takes about 2 years. Because of this shorter construction time, the industrial market can more quickly adapt to a pickup or slowdown in demand. Locally, bulk industrial properties have been the darling of investors because of our central location gives DFW a logistical advantage to serve as a south central regional hub for the middle of the United States. Also, the tremendous growth we’ve seen from the e-commerce sector has made DFW consistently one of the five best industrial markets in the country. This is not just about Amazon, which has been growing by about 2 million per year but also by some much more niche online retailers like Chewy.com (now a part of PetSmart), Wayfair, etc.