MIAMI—What types of projects is industrial money targeting andwhy? GlobeSt.com found the right man to ask:CBRE's Jack Fraker.

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Fraker will be on hand at RealShare Industrial Miami next week. In themeantime, we caught up with him to talk about where he sees themoney going. His short answer: class A bulkindustrial in major supply chain cities andgateway markets. But, he said, there is a four-to-one imbalancebetween investor demand and these type of offerings on themarket.

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“This imbalance is creating frenzied competition betweeninvestors and forcing investors into either secondary markets orslightly older vintage productthat is still functional,” Frakertells GlobeSt.com. “Properties with a high level offunctionality—clear height, truck court depth, parking, buildingdepth, column spacing, etcetera—are the dominant criteria forinstitutional investors.”

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Fraker points to light industrial properties inprimary markets—mostly focused on in-fill sites—as attractive toinvestors and lenders. He reports light industrialvacancy levels have significantly decreased and rents have grown ascertain sectors such as single family housing and automotivecontinues to recover.

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We hear plenty about e-commerce's impact on industrial andFraker is seeing it. He says e-commerce-oriented facilities,including smaller projects for the last mile of delivery, are indemand and points to stats that show 40% of big box industrialrequirements are related to e-commerce with a 20% growth rate.

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“E-commerce and omni-channel retail require sophisticatedlogistics and supply chains, thereby increasing the demand forwell-located and modern facilities,” says Fraker. “Investors areinterested in core, core plus, and value-add offerings. Value-adddefinition is broadened to include vintage rent rolls in the2008-2012 time horizon when lease rates were well below thehistorical average lease rate.”

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