Warehouses are getting smarter, and distribution channels aregetting more efficient. As consumers demand faster delivery ofgoods, the industrial sector will play a huge role in making thathappen and technology will be the driver. That is according toJimmy Ullrich, director of Stan Johnson Co., who recently chattedwith GlobeSt.com on demand for industrial product and what hefuture looks like for the sector.
GlobeSt.com: What's driving demand for industrialproduct in today's market?
Jimmy Ullrich: Industrial is reallythe belle of the ball these days, and demand is coming from threedirections. First, the reconfiguration of retail's supply chain isdriving demand for both warehouse and distribution space. Secondly,institutional capital has fallen in love with the asset class –they're coming into the space in droves, driving down yields. Inever thought I'd hear “Greenville-Spartanburg” as a buzz word onthe streets of New York City, but quality product in markets of allsizes can be really attractive in today's market. Lastly, myfavorite driver of demand is coming from private buyers. 1031exchange buyers who have spent decades buying low cap rate retailproperties are growing weary of negative headlines. The doom andgloom – whether real or perceived – surrounding portions of theretail sector is causing some private buyers to migrate toindustrial, which can offer better yields.
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