Thanks to the rise of e-commerce, the value of big-box warehouses now surpasses that of office buildings
A new report by Colliers International shows large high-tech warehouses of more than 200K SF with 28-foot ceilings have become particularly valuable.
The brokerage tracked big-box industrial performance in 14 markets in North America and found these assets now command a record-low 5.8% cap rate, down from nearly 8.5% in 2009.
Lower cap rates are favorable because they indicate an asset is of greater value. Office cap rates dropped to 6.7% in U.S. suburban and rural markets in 2017 and stood at 5.7% in urban markets, Bloomberg reports.
Amazon has been a major driver for the sector and occupies 102M SF of warehouse space across nearly 260 facilities. The e-commerce behemoth intends to add another 37.8M SF before the end of 2018. Companies such as Blackstone Group are also providing a boost to the sector. The asset manager has been on an industrial real estate shopping spree, acquiring a 41-property industrial portfolio for $359M this week. In December, Blackstone bought a 22M SF, $1.8B portfolio and in February the firm purchased a 1.71M SF portfolio for $151M.
Vacancy rates in the sector have hit all-time lows, even with an influx of construction. Markets such as Indianapolis, Phoenix and California’s Inland Empire ranked among the top markets for warehouse demand, Bloomberg reports.
Source: Bisnow
Larry W. Genet is a Senior Vice President in the CBRE, Inc. Miami, FL office. As part of the CBRE platform Mr. Genet can provide a wide range of services from local to Fortune 1000 clients including agency and tenant representation, asset or portfolio management, high level logistics, labor and data analytics prior to site selection, project/construction management, capital markets, owner user sales and valuation advisory services. CBRE is the global leader for real estate services worldwide.
Larry has extensive experience in landlord agency, tenant representation, acquisitions, dispositions and property management. As a third-generation commercial real estate professional and South Florida native, Larry boasts deep community ties, an intimate knowledge of the South Florida market and numerous professional contacts. Larry’s leasing expertise of industrial, office, land, retail and medical properties coupled with his experience in acquisitions and dispositions gives him the ability to represent a myriad of clients in the South Florida market. Additionally, Larry controls a portfolio of 13.5 million square feet allowing him to see every deal in the market. This ensures his clients never miss an opportunity. His knowledge of tenants and buyers in the market is top notch and when coupled with his team's vast portfolio, it's a winning combination.
