Industrial Sentiment Report – October 2017
Real Capital Markets (RCM) joined with the Society of Industrial and Office Realtors (SIOR) to gauge how the industrial market was faring from an investment standpoint. How much room is left in this cycle? How is expansion in e-commerce filtering through the supply chain and affecting leasing, development, and capital market sales? What will investors see over the next 12 to 18 months? This study was compiled through a survey of RCM principals, SIOR members and subsequent research.
HIGHLIGHTS INCLUDE:
- Activity should be strong into 2018. One participant interviewed expects a big push to get deals done through the end of the year.
- Pricing is expected to increase over the next 12 to 18 months. Many survey respondents predicted at lease a 5% growth rate.
- E-commerce is not going away and will continue to shape the future of industrial space usage and capital market sales, notes one participant.
- Brokers were, in general, more optimistic than the principals surveyed. Just over half of brokers said they expect activity levels will increase, even if only nominally.
- Activity is spread across all types of buyers, including recognizable institutional investors, REITs, private investors and many foreign investors.
The U.S. industrial market has been on a strong run since 2012, drawing investors with stable returns and long-term growth potential. According to those surveyed, there appears to be no end in sight, at least for the next 12 to 18 months.