Archives for July 2022

X-Bow Systems successfully flew its new “Bolt Rocket” for the first time at White Sands Missile Range on Saturday, marking a major milestone for the company’s new, breakthrough rocket-motor technology and launch capabilities.

The Albuquerque-based company has developed a unique 3D printing process for solid-state rocket-motor fuel, along with a new family of launch vehicles for orbital and suborbital flights. Its additive fuel manufacturing process is a first for the space industry, potentially representing one of the biggest technological leaps in rocket-motor fabrication in the past 50 years, said company founder and CEO Jason Hundley.

X-Bow (pronounced “crossbow”) technology could revolutionize rocket launches, radically reducing the costs and timelines to shoot vehicles into space.

The White Sands launch comes after nearly six years of technology development by X-Bow, which emerged from stealth mode for the first time only this spring.

“It was our first flight and we were thrilled with the success we achieved on Saturday,” Hundley told the Journal. “… This is the first of many new capabilities we’re developing for suborbital, and potentially orbital, flights. We’re working on more launches now with different customers to eventually fly multiple times per year.”

The weekend flight included a test payload for Los Alamos National Laboratory, kicking off a collaborative relationship that could lead to many more X-Bow payload launches for LANL, said Charlie Nakhleh, Associate Laboratory Director for Weapons Physics.

“(It’s) the first example of what we expect to be a fruitful collaboration between the laboratory and X-Bow Systems,” Nakhleh said in a statement. “This partnership will enable the laboratory to leverage the revolution in commercial space flight, and provide our scientists and engineers with rapid and cost-effective access to experimental flight test data.”

Although the company only unveiled its technology and business development publicly this year, it’s constructed a formidable base of operations in New Mexico. That includes a 5,000-square-foot office in Uptown Albuquerque, and a rocket-motor manufacturing and test hub in Socorro.

It currently employs 70 people, about half in New Mexico, with potential expansion to 100 employees this year.

And it has already snagged many contracts with defense and other government entities. It generated about $7 million in revenue in 2021 and projects $15 million to $20 million this year.

The company is also flush with capital for continued research, development and commercial operations. It raised $27 million in venture investment in April. And, since December 2020, has received about $1.2 million in state Job Training Incentive Program assistance.

The company originally developed its new launch vehicle under a Cooperative Research and Development Agreement with Sandia National Laboratories and the Air Force Research Laboratory at Kirtland Air Force Base. Until recently, however, it purchased solid-state rocket-motor fuel from other companies. But that commercial procurement process was excruciatingly slow and costly, with each batch of fuel taking at least six to eight weeks to produce, Hundley said.

So, the company decided to produce its own solid-state fuel, creating a new additive-manufacturing process that cuts fuel development to two or three days, radically reducing costs and timelines. That automated process is encased in shipping containers – which X-Bow calls its “Rocket Factory in a Box” – allowing the company to independently manage its own “make, build and fly” production line to offer customers quick turnaround at cut-rate prices.

“We’ve developed a safer, faster and cheaper process that we believe will reduce the capital cost for production by 90%, and labor costs by between 80% and 90%,” Hundley said.

The White Sands launch, dubbed the XL-2 mission, was achieved in a compressed development time frame, said X-Bow XL-2 Mission Manager and Director of Programs Sam McCraw.

“The XL-2 launch caps off an impressive and successful three-month effort at X-Bow,” McCraw said in a statement. “Over this short period, our talented team designed and built a new test site, completed our first large motor static fire, and pulled off an 11-day launch campaign leading to a successful first flight.”

Source: “”

There seems to be a virtually unlimited need for warehousing and logistics. What happens when there’s not enough land to build on?

Need a warehouse? Get in line—one that keeps growing longer.

Getting enough industrial space built has become a big problem and looks like it will continue to be one. Blackstone expects record-low vacancies in industrial to continue because supply can’t keep up with demand. Inflation and the Fed’s push to drive up interest rates, increasing financing expenses are part of the reason. Another is continued critical materials and labor shortages. Then there’s the availability of land. There’s only so much land to go around, particularly in hot urban markets, whether you want a major staging warehouse or infill for secondary distribution and last-mile services.

A new report from CommercialEdge centers on the issues facing industrial developers.

“Despite levels of inflation not seen in 40 years and with many weary of a possible recession around the corner, demand for industrial space remains as high as ever,” the report states. “In June, the average in-place rents grew 4.9% year-over-year, the vacancy rate fell to 4.6% and the average cost of a new lease signed in the last 12 months was 88 cents higher per foot than the overall average. Supply of new industrial space cannot maintain pace with demand, a problem more pronounced in areas where geography limits the amount of land available for development. Port markets, and Southern California in particular, are most attuned to this issue.”

Some of those geographies that limit the availability of land are also places with some of the highest economic activity that are important in major supply chains.

An approach some developers are now using in the US is multistory industrial, a strategy long used in Asia, CommercialEdge says. One problem is cost. Multistory is 40% more expensive than single-story for the same amount of space. But saving money by building out instead of up is decreasingly an option. Industrial outdoor space has helped some, but zoning often excludes it, limiting the scope of effectiveness in many markets.

All the factors together are why “large multistory buildings are being developed, including many of the multimillion-square-foot Amazon facilities completed of late,” the report says. “A joint venture between Turnbridge Equities and Dune Real Estate Partners will develop Bronx Logistics Center, a 500,000-square-foot multistory building with 800,000 square feet of parking between a garage and the roof.”

Another option for some developers is to convert old office and retail space into industrial and such conversions will likely pick up, according to Newmark. But these have their own challenges like zoning, land availability, location, and trying to fit new industrial requirements into old structures. The needs of warehouses and their users have changed significantly over the last 10 to 15 years. Older buildings likely lack the height and layouts new approaches to materials handling require.

Source: “How Some Industrial Developers Are Dealing with the Land Crisis“

Investment giant says demand will keep outpacing supply in residential, industrial sectors.

Blackstone expects demand to continue to outpace supply and support rent growth in the two asset classes that make up the lion’s share of Blackstone’s $320 billion real estate portfolio—rental housing and industrial.

“Despite a lot of headwinds, these are two of the best sectors in the entire global economy,” Blackstone Group President and COO Jon Gray said, in a Q2 earnings call this week.

Gray said Blackstone expects record-low vacancies in industrial warehouses and tight supply in the housing sector to continue, noting that inflation and the rising cost of debt are rapidly slowing down new construction, which also has been stymied by shortages of labor and building materials.

“On the residential side, we’re seeing a rapid slowing of new construction. New home starts were down 20% in the last couple of months,” he said.

A shortage of new inventory, record-high prices for single-family homes and high mortgage rates will continue to push would-be home buyers into rental units, Gray said.

“People still have to live somewhere,” he said.

Gray said the growth of e-commerce has increased the value of owning last-mile logistics properties. Supply chain disruptions also have increased demand in the industrial sector, he said, by increasing the desire of companies to embrace “redundancies” and hold more inventory closer to home.

“We estimate rental growth in our US and Canadian logistics markets exceeded 40% year-over-year in the second quarter,” Gray said.

With SFR and multifamily rents exceeding the standard metric of affordability—monthly housing payments should not exceed 30% of monthly income—in most of the markets in the US, Gray was asked by an analyst whether rents can continue to grow at the torrid pace of the past 12 months, which has seen YoY increases of up to 40% in the hottest residential markets.

“Obviously, at some point, the very high rates of rental growth will come down. But the backdrop [now] is incredibly constructive,” Gray said.

“We already have a very big structural shortage and that’s pushing more people into the rental market, so that provides a lot of support [for rent growth],” he said.

When inflation spiraled into double-digits 40 years ago, Gray noted, apartment rents grew as new construction plunged by 50%. “I think investors haven’t fully appreciated the value of hard assets in this kind of climate,” he said.

According to the Blackstone REIT website, rental housing makes up 52% of the BRIET portfolio, with industrial assets accounting for about 25%. The balance of the portfolio is split between net lease (8%), and data centers, self storage, retail, hospitality and office properties, which each account for 3%.

In its Q2 earnings statement, Blackstone Group reported $88B in inflows during the quarter, driven by 45% growth in fee-related earnings and record realizations.

The company said it has increased its AUM by 38% in the past 12 months and it has accumulated $170B in dry powder.

Source: “Blackstone: Slowdown of New Construction to Keep Lifting Rents“