In an article posted today by National Real Estate Investor (NREI), author Patricia Kirk reveals that industrial real estate is the asset class most preferred by commercial real estate investors and lenders.
We delve into the sector’s current strong performance and take a look at the key trends that any user or owner of industrial real estate should have on their radar.
One thing is certain, both investors and lenders are happy to throw their money at industrial real estate. With many U.S. markets posting vacancy levels at below 2%, yes 2 PERCENT, as a result borrowers are seeing increased lending options and owners are seeing rental rates that continue to rise.
According to recent investor surveys, industrial real estate is the sector most preferred and considered to produce the most reliable returns. With market fundamentals at peak strength, industrial is coming up roses across the board.
As with any commercial real estate sector that experiences this kind of popularity, there is always a worry of eventual oversaturation. But with the continued strength of the e-commerce giant, industrial real estate should remain bullish for cycles to come.
The increased availability of financing is also supposed to have lasting power, with lenders currently offering financing at incredible 50-70% loan-to-value (LTV) ratios. These ideal financing conditions even apply to old and outdated industrial real estate properties.
Decades old and physically obsolete? If the asset is located in an urban infill location it could bring in 2 or 3 times as much (price per square foot) as its modern counterparts located in suburban markets. Why? Lenders versed in market dynamics know infill locations are “irreplaceable” and support higher lease rates that support increased asset pricing.
To read the full article featured on the NREI website, click here.
In a recent article SVNGLL discussed Bisnow’s five industrial real estate trends that are dramatically affecting performance in the industrial real estate sector and have major implications for investors and lenders.
Clearly having a good 2017, and the current investment darling on the block, industrial real estate has been posting record performance levels this year. At the end of 1Q17 the sector had realized historically low vacancies and historically high occupancy gains.
Key trends include:
- Outrageously Low Vacancy Rates
- Strong Occupancy Gains
- Industrial Warehouse Design Meeting Demand
- Beneficial Tech Disruptions
- The Affect of Trump Trade Policies
To read the full article on key industrial real estate trends, click here.
Don’t believe us that industrial real estate is the asset type you should be paying attention to, believe the investors and lenders who can’t keep their hands off this sector. High occupancy and increased demand means a pipeline that has no signs of stopping. If you are interesting in seeing how industrial real estate in Baton Rouge can bring you high returns, contact us today at 225.367.1515. In the meantime, search through our online CRE database and see if any of our current industrial listings meet your investment goals. Let us know if you see anything that interests you, we are here to create value.