You don’t hear much about this boring asset class. It’s certainly not a flashy business to be in. But industrial real estate is doing very well. Why?
Much of the recent success can be attributed to e-commerce supply chains
Online retailers and distributors are expanding. More online businesses are opening. Traditional brick and mortar businesses have also jumped on the e-commerce bandwagon. These businesses store and distribute their goods in and from industrial real estate.
A trend in inventory storage has businesses stacking product higher but in less square footage to save on real estate costs.
If you want to offer one or two-day delivery you’re going to need more properties full of product and they need to be closer to your customers.
Rather than having one main distribution warehouse, businesses are now choosing to operate out of multiple smaller locations.
Supply and Demand Are in Balance
Few industrial properties are built on spec. Also, it’s not that common for an industrial user to have space needs so specific that they need a custom-built facility. Most industrial users can make do with existing properties.
Normally this means supply and demand move in lockstep. By avoiding oversupply, industrial real estate prices and rents have continued to rise.
Investors are Eager
2017 is shaping up to be one of the strongest years ever for industrial real estate and investors have taken note.
They’re frothing at the mouth for distribution centers close to large population centers (“Last Mile” Industrial) because e-commerce will only continue to get bigger and more important.
Some investors wish they had invested in 2014 but it’s still thought that industrial represents a good relative value for investors. We’ve seen an impressive run up in prices but most expect more growth in the sector.
If you’re an owner of industrial real estate who is considering selling, now is the time to lock in market peak pricing.
Considering selling? Get the step-by-step blueprint to sell your property for the absolute highest price the market will pay at www.SellforMorePlan.com
About Beau Beach, CCIM
Beau is an elite Investment Real Estate Broker, Forbes contributor, author, investor and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau leads Prowess IRES which specializes in selling investment real estate for the absolute highest price the market will pay. Wisconsin, Florida and Illinois.
Beau can be reached at 414-324-4938, 561-425-9935 or Beau@ProwessIRES.com