Commentary on Industrial Markets

Commentary on Industrial Markets

Posted on by Jim Klein

Week of January 13, 2021

There are more buyers looking for outside storage yards to purchase. Institutional capital sees leased land as an excellent investment. They are offering higher prices than normal because of investment grade returns. Offering prices are $70 per foot +. At $.45 Net rents monthly (annualized at $5.40), investors are underwriting to 7.5% returns. This is generous compared to building returns and often there are credit tenants in place. Some are calling “covered land”, a new asset class.
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Why Is Industrial the Hot Investment

Why Is Industrial the Hot Investment

Posted on by Jim Klein

As 2020 comes to an end, Industrial Buildings continue to be good investments. With annual appreciation at 6% and current cap rates at 5%, Buyers are getting 11% annual returns and greater on an “all-cash” basis. These calculations reflect market conditions and not based on finding a “good deal”. With interest rates at 3% or lower, there is strong leverage boosting cash-on-cash returns to 10% with conservative financing.  Levered returns increase to 15% (cash flow + appreciation). If you can find property for sale, not always that simple, conditions are very supportive.

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CREate 360 – Fall Conference

CREate 360 – Fall Conference

Posted on by Jim Klein

Twice a year I meet with my SIOR colleagues from around the world to make deals and compare markets. This was the first time we held the meeting virtually. While not the same as in-person, I was still able to connect with many of my peers and have valuable learning time.
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New Asian Cities

New Asian Cities

Posted on by Jim Klein

Through my attendance at MIT’s World Real Estate Forum, I was introduced to new research that is collected in the book entitled, Toward Urban Economic Vibrancy, Patterns and Practice in Asia’s New Cities, Edited by Siqi Zheng and Zhengzhen Tan. The several papers that make up the book include sections on finance, structure, Public Private Partnership, design, success measurements, industrial policy, location, and case studies.
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What I Learned From Attending MIT’s World Real Estate Forum 2020

What I Learned From Attending MIT’s World Real Estate Forum 2020

Posted on by Jim Klein

This year’s Forum was held virtually with presenters and participants from Asia, Europe, and the United States. There were a wide range of future-focused topics that came at the right time.  The Forum opened many new doors for exploration and research. My favorite sessions addressed ESG, Wellness, New Cities, Pricing Metrics, and Virtual Worlds.
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Streaming Industrial Real Estate

Streaming Industrial Real Estate

Posted on by Jim Klein

Streaming is the talk of Hollywood. The biggest adaption since television. Technology is replacing human  decisions with lessons from on-line, eCommerce and subscription. It’s happening to industrial property.  Real estate is already a superior cash streaming business, now with more means to enhance revenues. Visible effects of streaming appear with large space take-downs by studios and independent producers. Agency, too, is being disrupted because the value of data is surpassing personal relationships.  Financial concentration and streaming technologies are creating a new real estate business. Virtual and artificial intelligence programs are essential to move forward in these new conditions. Continue reading “Streaming Industrial Real Estate”

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