National Update On The Industrial Real Estate Frenzy

Last week I wason a national Zoom call with 60 fellow SIOR members. While the office market in most areas has been hit by heavy amounts of office sublease space put on the market and corporate indecision on where and how much office space will be taken down long-term, the industrial market has been off to the races. In region after region brokers report industrial manufacturing and warehouse vacancies under 2%, the price of new construction up 25-50% or more as compared to just a few years ago, and well-tenanted industrial leased investments with under 4% cap rates. The national trend to bring manufacturing back to U.S. shores, the last mile for warehousing and e-commerce has caused this sector of commercial real estate to skyrocket. Meanwhile, high rise office landlords are trying to figure out how to get masses of office workers through the lobby, into small elevator cabs, and up 40-60 stories safely to get them back into the office.