I've been reading numerous articles on how hot the Industrial Sector is right now. Across the board, industrial property vacancy is pretty much at its lowest in history.
It looks like most of this demand for warehouse space is driven by
1) E-commerce Players
2) Logistics, 3PL companies
As an industrial broker, there's obviously numerous ways to go about obtaining potential new clients (tenants) to occupy warehouse space - but I want to chase the future tenants of these warehouses, the guys who nobody else is calling.
Which do you think will be the most prominent warehouse tenants of the coming years? E-commerce companies? What other sectors?
Who would you chase as a tenant rep broker in a hot market for Industrial Properties.
Best Regards.
Sports & Recreational and Automotive (manufacturing/storage/dealers) are two emerging sectors that can occupy industrial spaces.
Well it's NOT going to be WeWork.
-Urban Farms
-Indoor Driving Ranges
Was just thinking about this the other day. Aerofarms is laying the foundations for hyper efficient farming. Still, I wonder: they could just set up facilities on old farms a few miles outside of cities and save on both real estate costs and taxes.
According to the Metlife Ag guy I spoke with they are seeing a huge spike in debt requests on indoor farms. They see a lot of growth in the space if they compare American % of food stuffs grown indoors to Europe. Obviously a different dynamic but IIRC my conversation US is like 1-2% indoor farming while Europe is closer to 20%.
Edit: Sorry everyone I got bamboozled into thinking this was a new thread, not sure why its up on the first page.
Marijuana tenants
It's already happening in Seattle and a few other WC submarkets.
I think the biggest battle for this use is going to be the new zoning/use adoptions City's will need to make. I read somewhere a while ago that there was one developer trying to specialize in just this. Assemblage of buildings and creating a specific plan or re zone for the use.
Hydroponic farmers once all the marijuana tenants blowout because of mismanagement.
Eh, I kind of disagree. Marijuana Tenants are/will be useful in taking virtually obsolete '60s - '80s vintage industrial with low clear. Many optimists within industrial will argue that the 5% of vacancy that is in the industrial sector now is unusable. This "unusable 5%" is where I Marijuana type Tenants can move into and for a very good price. Even with all the increased Brewery's all over the country, these guys are usually looking for newer 26' + clear heights, for example.
The future of industrial will continue to be last mile infill locations that will be intertwined with other mixed use properties - also multiple story buildings (Prologis is at forefront of this now). I think shopping centers will have a distribution component to them, as will offices and such. This is the one competitive advantage Walmart has over Amazon today - they have an unbelievable network of distribution centers: the Brick and Mortar stores themselves. Walmart will continue to build larger buildings, but the majority of the building will be more distribution than retail. That's at least what I think.
It is tough for many buyers to take on assets with Marijuana linked operations, as there is still quite a bit of risk to having these operations as Tenants. As the industry continues to grow, develop, and become more acceptable to the public that may change.
I have seen an increase in calls from large indoor recreation users and solar panel companies.
Are they Chinese solar panel companies?
For me, it has just been local distributors of solar panels. I am not privy to their actual product source. Since I made the comment above (9/7/18) the solar industry as a whole has left a bad taste with the LLs and Brokers in my area for not fulfilling their leases. They now go on the list with last resort tenants like churches, gyms, and tattoo parlors.
The year 2017 came with great change, and continued growth, for the commercial real estate industry. But as we dive into 2018, we will begin to see some changing market conditions and how they will affect the industrial real estate market in the new year. Large blocks of Class A space (100,000 SF plus) continue to be in high demand by tenants and investors alike. Increased efficiency, access to labor and proximity to the consumer are at the core of most real estate decisions at the moment. Leasing activity checked in at nearly 29.5 million square feet for 2017, a decrease over the previous year’s total of 40.0 million square feet. I think this is a reflection of lease rates catching up with market demand.
Industrial Real Estate (Originally Posted: 05/27/2016)
Hi WSO RE people!
Curious if anyone here focuses on the industrial sector, pm me if so. I know someone interested in meeting more people of your kind.
Gracias!
PMed
Hi sorry i am a newbie and come across your post, i am currently working in real estate focusing in industrial sector. i plan to get my master degree in the US next year, and look for Real Estate major that focuses on industrial sector, do you have any recommendation which university in the US offer such program? thanks
I don't think any focus particularly on industrial. Most, if not all, teach all product types.
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