DALLAS-The same factors that the spring investment report from Jones Lang LaSalle claims have driven down overall US commercial real estate investment nearly 70% from last year appear to be at play in the industrial sector. But in addition to the widespread repricing of risk throughout credit markets and general economic concerns affecting the market in general, the industrial sector’s solid fundamentals, ironically, may be playing an equal role in its declining investment volumes.

“The real issue with industrial product is that the markets are fundamentally in such good shape that everybody’s happy holding,” says Cary Krier, senior vice president in JLL’s industrial services group in Dallas. “That’s dried up all the liquidity. Even if you want to buy, it’s hard to find a seller. Everybody’s paying the rent and doing well.”

According to Krier, a major factor behind the strong fundamentals is the continued, and somewhat surprising, strength of the retail industry. Though he acknowledges there are some signs of tapering, he says retail is doing much better than many people realize and certainly much better than analysts predicted. “You go through these warehouses, and people are still ordering and hiring,” he remarks. “I don’t know if they’re just reluctant to lay off people or what. But nobody’s giving back space. We don’t have a lot of sublease space creating a shadow inventory.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.