Posts tagged industrial real estate
Industrial Market Predictions in 2018

The industrial sector flourished in 2017. Real estate research firm Real Capital Analytics (RCA) noted in a recent report that the industrial sector, seeing gains from rising e-commerce sales and the resulting need for industrial facilities, was the only commercial real estate sector last year that saw an increase in transaction activity from January through November. NREI discussed possible trends to look out for in 2018 with several market observers.

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Industrial Properties are Still the Apple of the Eye of Investors

Despite increasing valuations and compressed cap rates, industrial/logistics real estate remains “the prettiest girl at the dance,” says Mark Glagola, senior managing director of the Mid-Atlantic capital markets group at brokerage firm Transwestern. “Investors are buying at lower caps, but supply is overwhelmed by demand,” he notes.

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Is Industrial The Newest Favorite of CRE Financing?

Over the last few years, industrial properties have risen through the ranksamong banks and other commercial real estate lenders to become financing’s new sweetheart property type. These include core market warehouse and distribution centers, refrigeration/cold storage centers, flex buildings, manufacturing properties and R&D facilities.

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Are Industrial Values Getting Significantly High?

Over the last few years, investor interest in industrial real estate has risen to a fever pitch.

Rent growth and cap rate compression are propelling investor interest in industrial properties, according to David Bitner, head of Americas capital markets research with real estate services firm Cushman & Wakefield. He notes that industrial asset values, including capital and appreciation, grew by 13.1 percent in 2017 alone, compared to 7.0 percent overall for all other commercial real estate sectors.

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Investors Still Confident on Industrial Real Estate

Industrial real estate has consistently been a well-performing asset class for commercial property investors. Capital continues to remain hungry for industrial real estate—many funds are under-allocated in the sector—due to its consistently strong performance, versus alternative investments in the marketplace.

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Industrial Properties Continue to be on High-Demand Especially with E-Commerce Tenants

Tight market conditions for United States-based warehouses and distribution centers continues to get even tighter, according to data issued by industrial real estate firm CBRE in its U.S. Industrial Availability Index, which was released this week. The availability rate in the first quarter dipped six basis points to 7.3%, which CBRE said marks the 31st consecutive quarter that availability has declined. And on an annual basis, the availability rate dropped 20 basis points annually.

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