Prices for industrial land have outpaced all other sectors this past year thanks to strong demand for warehouses and a dwindling supply of sites.
“This situation won’t go away any time soon, because the markets where distribution centers are most in demand—typically near or in densely populated city centers—have scant available land for industrial uses,” David Egan, head of global industrial research for CBRE, told the Wall Street Journal.
Pricing for large urban sites between 50 and 100 acres where warehouses can exceed 1 million square feet topped $100,000 per acre, up from roughly $50,000 a year earlier, according to CBRE. Sites between five to 10 acres for smaller warehouses of 200,000 square feet increased to more than $250,000 per acre, up from about $200,000 a year earlier and roughly $150,000 in 2013, according to CBRE.
National vacancy rates are hovering at a cyclical low, and development pipelines are filling up. Green Street Advisors recently increased its supply growth forecast by 10 percent. Returns for industrial real estate investment trusts were 24 percent between January and early December in 2017, according to Green Street. That exceeds the single-digit returns in other sectors like hotels, apartments and offices.
The Blackstone Group is buying a 22 million-square-foot industrial portfolio for $1.8 billion, as The Real Deal originally reported.
Source: Real Deal
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.
