In the world of CRE, industrial real estate was once passed over for glamourous shopping malls and in-demand office blocks. However, thanks to the world of retail’s evolving preference for trading storefronts for digital shopping carts, industrial real estate’s star is set to continue to rise in 2018. In this post, we explore the current trends we are seeing in the industrial real estate market and how investors and industrial real estate brokers can source ideal assets for this lucrative market.

The Industrial Real Estate Market in 2018

CBRE reports that demand for industrial real estate currently outweighs supply. In the first quarter, 35 million sq. ft of new industrial real estate space had been constructed, while registered demand sat at 42 million sq. ft. However, company representatives note that supply is gradually closing the gap on demand.  

The rise in e-commerce has been pinpointed as the driving force behind a growing demand for industrial real estate properties. 2017 figures show that online sales accounted for 9% of all US retail sales. Experts predict that this number is set to rise to 12.4% in 2020. This growing preference for online retail is set to push forward the industrial real estate market in 2018.

Beyond the e-commerce sector, CBRE notes that the food and beverage and 3PL sectors are also sharing the market monopoly. David Egan, CBRE’s head of research on American industry and logistics, claims that we are also seeing an increase in demand for more diverse space from these markets. Comparatively, from 2012-2014, large facilities of 500,000 square-feet and above were largely sought out by manufacturers.

Egan explores this shifting trend: “There is still plenty of activity happening in those types of buildings and markets, but we have seen a real significant shift in the diversity of demand from those types of users from the major markets to secondary and tertiary markets, which are smaller and don’t have as big of population centers.”

He added: “There is also more variety of building types, not just big box but also medium box and light industrial that are aimed towards getting quicker and faster service to the customer. This requires having inventory in as many places as possible and being closer to your customers. And when a customer makes an order, it can get from the warehouse to the front door in as short a timeframe as possible. That requires being as quick as one can be, and it has been a relatively new shift in recent years, with more markets seeing more activity with big institutional users that generate activity in a lot of different sized categories.”

The political landscape is another factor set to fuel the growing demand for industrial real estate in the US, despite the current temperamental political climate and ambivalence over the future moves of the current Administration leading to a slowdown of user activity in recent months. Commentators are also hopeful about the positive impact that Trump’s $1.5 trillion infrastructure plan and apparent support for industrial investment will have on the industrial real estate market. Trump’s promises to invest in the country’s infrastructure will demand more space for the manufacture and storage of raw materials.

How to Source Properties for Industrial Real Estate Investing

Industrial real estate investing is set to be a lucrative choice for commercial real estate investors and brokers in 2018. When searching for industrial real estate for sale for industrial real estate investing, many commercial investors and industrial real estate brokers start with listings platforms. There are several key listings platforms available to help you source industrial real estate for sale.

LoopNet is one of the CRE industry’s most popular search engines, listing approximately 500,000 buildings for sale or lease. LoopNet allows you to search properties based on property type, price range, location, and property criteria. Catylist is also a great option. Catylist allows you to search a customized, local database for the industrial real estate market. Both LoopNet and Catylist are free to use.

In comparison to searching for industrial real estate for sale using property listings, you can also use Reonomy to search off-market properties. Reonomy lists both current commercial real estate property for sale and off-market commercial real estate assets. Our platform covers 99% of America’s CRE market. Widening your search to include off-market properties provides you with access to a variety of investments currently hidden from your competitors.

You can use Reonomy to narrow your search down to industrial properties using our asset type filter. You can further refine your search to explore properties based on their location, sales and debt history, ownership portfolio, and more.

Using Reonomy to Search Based on Location

Industrial real estate brokers and investors can source off-market industrial real estate properties in urban hotspots by using our location filter to search for assets. You can use our location search to uncover potential investments based on the city, zip code, street name, county, or state.

Using Reonomy to Search for Property Ownership Information

When searching for industrial real estate assets for potential industrial real estate investing, searching by ownership portfolio can help you uncover an owner’s property ownership history. As industrial real estate brokers or investors, this can help you understand the owner’s buying and selling patterns. You can also gain a deeper understanding of their relationship to the property, through the date and price of their last sale.

Developing greater insights into the owner can help you perfectly time when you make contact and how you undertake your approach. We also list a property owner’s contact information to allow you to secure your prospect quickly and easily.

Sourcing Off-Market Real Estate Investments and Industrial Real Estate for Sale

The industrial real estate market is growing fast and with demand currently outweighing supply, now is the ideal time to invest industrial real estate assets. If you’d like to use Reonomy to help you find the perfect property to meet the demands of the industrial real estate market, you can try it for free here.