U.S. Industrial Investment Market Thriving in Q1 2014, by Cushman & Wakefield

File Type: Free Content, Article
Release Date: April 2014
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The U.S. industrial market remains strong, continuing to fare better than the European, Asian and Canadian markets, according to Cushman & Wakefield’s “Industrial Investor Outlook and Trends” report for the first quarter of this year. The report notes that the market’s early 2014 progress is reflected in positive absorption, declining vacancies and rising rents.

“U.S. industrial sales volume totaled $47 billion in 2013, up 15.5 percent from 2012. The warehouse sector continued to dominate transactions, with sales of warehouse properties increasing 24.4 percent in 2013 on $32.9 billion of sales volume,” the report adds. Cushman & Wakefield expects sales activity to remain healthy throughout 2014 and into 2015, with significant speculative development anticipated as inventory dwindles.

“The appetite remains strong for well-located Class A assets, with access to transportation nodes such as rail and intermodal services becoming more important,” the report continues. “Today’s investors are analyzing the functionality of an asset as never before, as larger distribution centers located in major transportation hubs with clearance of 30-feet and greater have become the norm.” Such assets account for over 70 percent of all projects now under construction.

Portfolio transactions totaled $10.8 billion in 2013, down 7.1 percent from 2012. Chicago ranked on top in both investment and user sales, with 26.7 and 12.5 million square feet, respectively. New Jersey investment activity reached an all-time high during 2013, with 20 million square feet of industrial product changing hands. Looking forward, investors identified the following key U.S. markets for potential acquisitions (and premium pricing for Class A product):

  • Atlanta;
  • Chicago;
  • Dallas;
  • Eastern/Central Pennsylvania;
  • Houston;
  • Memphis;
  • Central New Jersey;
  • Northern New Jersey;
  • Seattle;
  • Southern California (especially the Inland Empire);
  • Southern Florida (especially Miami); and
  • Washington, D.C.