Industrial Real Estate Update

Industrial Real Estate Update

March 8, 2019

Industrial Real Estate Still Strong Following HQ2 Decision

Charlotte, Houston, and Salt Lake City may have been cut from the short list of HQ2 locations by Amazon, but they are still performing strong from the industrial real estate side — and are on Amazon’s watchful eye. Amazon has invested in 800,000-square-foot distribution centers in Houston and Salt Lake City, and all three markets continue to attract attention from investors, according to a recent Forbes article.

Ecommerce, Cold Storage and Institutions Dominate Industrial

REITs could outperform expectations this year in several asset classes, including industrial, according to Globe Street.  Continued demand for e-commerce space,  attractive pricing in cold storage, and continued attention from institutional investors could lower cap rates and keep conditions favorable for landlords.

The market has also been tough on senior housing, due to above-average supply added to the market in recent years. The construction pipeline is moderating, however. This sector does farce ongoing  pressures from higher labor costs.

Kroger Plans Industrial Distribution Centers in Florida, Mid-Atlantic

Grocery store chain Kroger plans to build two new distribution centers in Florida and the Mid Atlantic because of the demand from ecommerce customers who are looking for grocery delivery, says a recent article in the Dayton Daily News. These will be in addition to the 20 fulfillment centers, or “sheds” that the chain will invest in to speed up deliveries through the use of technology and robotics.

 

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