There has been a resurgence of demand from Corporate Real Estate. Once, the most important sector of the industrial real estate business, corporate influence has waned in comparison to investor/developers. The fade of corporates is a long-term trend starting when manufacturing moved off shore in the 1980s. Since the Great Financial Crisis, Capital’s influence in industrial real estate has only become more pronounced as investors search for yield. Tenants are the crucial for cash flow, but where it counts the most, in the ownership rankings and at the negotiation table, Capital is the market leader.
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If you are buying, selling or leasing, today’s industrial real estate business has permanently shifted. It has become an investor led market that was originally established for Occupiers. Investment fundamentals supersede many traditional occupancy concerns. Industrial markets became financialized because of strong and increasing money flows from institutional funds, REITs and private investors. In the New Industrial Real Estate Business, profits accrue fastest to those who treat their buildings like an investment product. The primary market driver is improving income through rental increases, operations, and tenancies. The wave of financialization is affecting most local industrial markets in the best metros and is visible building-by-building. Technical sophistication and specialized platforms are the new means of operating in today’s industrial building business.
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