Barry DiRaimondo of SteelWave: 5 Questions

It’s been a good two years for the tech world in San Francisco, and Steelwave, a real estate investment firm based in the City by the Bay, isn’t missing the opportunity to make deals.

SteelWave, which specializes in acquiring and developing office, life sciences and industrial properties in the Western U.S., has positioned itself to benefit from the uptick in office space deliveries and leasing seen in San Francisco recently.

In September, the firm received approvals for its plan to redevelop the city’s Golden Gate Produce Terminal, the site of Northern California’s busiest produce market, into a five-building, 2.5 million-square-foot biotech campus. SteelWave is also looking at a project to build 750,000 square feet of office and research space and a 183-unit residential building at 180 El Camino Real in San Francisco.

Plus, the firm has a “very large land assemblage” coming in California’s northern Inland Empire, according to Barry DiRaimondo, co-founder and CEO of SteelWave.

DiRaimondo spoke with Commercial Observer earlier this week to discuss SteelWave’s current projects, trends in California’s industrial market, and whether the recent Supreme Court ruling on President Trump’s tariffs will affect the industry as a whole.

This interview has been edited for length and clarity.

Commercial Observer: What is SteelWave currently working on?

Barry DiRaimondo: We’ve got a very large land assemblage in the northern Inland Empire, which is going to be all industrial, so we’re pretty plugged in to what’s going on out there. We’re not under construction yet. We’re still going through the entitlement process, but the type of product that we’ll be building involves very large distribution facilities, million-square-foot-plus. That’s where we think the sweet spot is, at least for that market.

There are a lot of users who are still leasing space, and that market got a little oversupplied, if you will, specifically the Inland Empire proper. That’s kind of reversing itself. There’s not a lot of new supply being built, that’s for sure. So that’s the good news. And I don’t think you’re going to see a lot of new supply for some period of time, and that’s probably not much different than most of the other major markets in the U.S.

What trends are you seeing in the industrial market right now?

In the industrial world, specific to Southern California, we’re seeing things really pick up from a defense sector perspective. If you have a manufacturing building and you have power in that building, you’re probably talking to a defense sector contractor, autonomous vehicle or drone technology. There’s a ton of that going on down in Southern California at the moment, and though not necessarily out in the Inland Empire. That’s in El Segundo and some of these more infill locations that are historically aerospace-related.

What we’re seeing up in Silicon Valley and in San Francisco, which is really kind of the center of the universe when it comes to AI, is that that technology really has had a gigantic impact on the tech world. And it’s not just OpenAI and some of these big AI companies who are leasing space. It’s robotics, autonomous vehicles, all the adjacent industries that are using AI to build whatever they’re building.

The Supreme Court earlier this month struck down Trump’s sweeping global tariffs. How do you think that ruling will affect the industrial market?

I think it’s a lot to do about nothing, candidly. They’re just going to go from one type of tariff to a different type of tariff. I think to the extent that it causes any kind of disruption in the market, it has less to do with the tariff itself, and more to do with the unpredictability. And I think that’s what we saw originally way back last April. It caused a pretty big slowdown in the industrial world, specifically the Port of L.A., and goods flowing in through the Port of L.A., and you could feel that across the Inland Empire markets.

Then people found the lay of the land. Everyone landed on their feet. And then the market generally started to move again. And whatever impacts this has I think will be fairly temporary. I don’t even think we’ve seen the industrial impacts, from the standpoint of manufacturing, from the tax incentives in the Big Beautiful Bill, yet there’s enormous tax incentives for people to reinvest in their supply lines and just capex in general. And I think what you’re going to see is a lot of people investing in capex. 

Now, the reality is it doesn’t happen overnight. You have to permit this stuff, and then you have to build it. As we get toward the end of this year and into next year, you’ll start to see the construction component of that coming together.

Do you think refunds from the tariffs are possible?

I think the odds of countries getting refunds is zero. I think it would just lead to another set of conversations about a specific tariff. So I don’t see that going anywhere. I mean, it’ll hit the news cycle for sure, but I’m not sure practically that’s where this thing’s going.

From a legal perspective, the ruling will impact things. But I think there’s more than one way to tariff, and to my understanding of what the Supreme Court ruling did, it was a pretty narrow ruling on tariffs specific to the types of tariffs that were levied.

Have you felt the impact of the uncertainty caused by the tariffs?

It takes much longer to get a lease done today than it did before. And I think that’s always the case: Anytime there’s the potential dislocation of anything, for decision-makers, from a standpoint of real estate needs, the decision process comes to a screeching halt until people get their arms around it. We certainly saw that, and it continues to linger. It just just takes longer to get stuff done.

Isabelle Durso can be reached at idurso@commercialobserver.com.