**Capital Markets and Industrial Lending: Q&A with Byline Bank’s Matt Robertson**
*While industrial real estate has remained an attractive asset class for years, owners, developers, and investors continue to face capital-raising challenges. To better understand evolving trends in the industrial space, ConnectCRE interviewed Matt Robertson, Senior Vice President and Team Lead at Byline Bank.*
*Matt Robertson*
**ConnectCRE: What trends are you seeing in the national industrial commercial real estate market, and how are they shaping deal structures and underwriting standards?**
**Matt Robertson:** The market continues to see a “flight to quality” among both sponsors and deals. Every lending source is now aggressively pursuing top-market opportunities. Interestingly, regional banks that have traditionally leaned toward value-add or construction loans are now targeting stabilized deals, hoping to balance safety and profitability in a competitive market.
Private credit has continued to grow, and we’re seeing a compression in credit spreads across various lenders. This is leading to a more aggressive and competitive lending environment, both in terms of rates and deal structures.
We’re also noticing a shift toward “small bay” buildings—typically under 100,000 square feet. These are emerging in both newly developed industrial parks and infill locations, often replacing older structures.
**ConnectCRE: Why is there a move toward the smaller bay building type?**
**Matt Robertson:** Smaller bay buildings are more cost-effective and quicker to build, offering faster speed to market. That’s a big deal in times of economic uncertainty or when concerns of a recession arise. Their appeal is also tied to lower vacancy rates, thanks to a broader base of potential tenants. This makes them particularly attractive to both investors and lenders.
On the other hand, constructing large-scale bulk buildings involves significantly higher costs, especially in today’s high-construction-cost environment. Those types of projects often also require land assemblage or rezoning, which introduces delays and risk.
**ConnectCRE: What do you consider to be some of the most critical elements of a successful industrial deal from a lending standpoint?**
**Matt Robertson:** First and foremost, sponsorship experience is key. Other vital elements include thoughtful facility design and layout, as well as “future-proofing” strategies—such as electrification readiness, higher clear heights, better dock configurations, and expanded truck parking. Building flexibility is also crucial, meaning the space must be adaptable for either single-tenant or multi-tenant use.
Location remains a core aspect. At this point in the cycle, lenders are drawn to properties in prime, “no-brainer” locations that demonstrate consistent user demand and have significant barriers to entry.
**ConnectCRE: How have interest rate volatility and inflationary pressures changed the kinds of industrial deals your team is seeing, particularly in the middle market?**
**Matt Robertson:** While the core types of deals haven’t shifted drastically, what has changed is the capital stack. With higher interest rates and elevated project costs, lenders now require more equity upfront. This helps protect the bank’s position in deals and ensure long-term fiscal stability.
**ConnectCRE: Have you noticed any other trend that’s worth keeping an eye on?**
**Matt Robertson:** One notable trend is the rise in user sales—where companies purchase their own facilities rather than renting. This gives users more control over their operating costs and reduces exposure to escalating rents.
Another noteworthy development is the growing institutionalization of Industrial Outdoor Storage (IOS). Historically fragmented and user-owned, IOS is now drawing more institutional investor interest. At Byline, we’ve financed between $150 million to $200 million worth of IOS deals over the past 18 to 24 months. It’s definitely a segment to watch as it matures.
—End of Interview—
