Investors haven’t lost their love for industrial properties, including those in the Midwest, according to the latest Real Capital Markets-SIOR Industrial Investor Sentiment Report.
According to the report, investors are particularly interested in local, regional and national e-commerce fulfillment centers. They’re targeting centers in Midwest cities such as Chicago; Columbus, Ohio; and Indianapolis that have populations of more than 500,000 and are located in the center of the country.
Investors want to sink their dollars, too, into last-mile warehousing. This is a trend across the country, of course, but also in the Midwest.
“The industrial market, and those who invest in it, have enjoyed an incredible run because of its ability to adapt to the needs of specific users and subsectors,” said Tina Lichens, chief operating officer of Real Capital Markets, in a statement. “Given this performance and consistency, we have every reason to believe there is plenty of runway left.”
More than half – 52 percent – of market experts surveyed for the report said that last-mile/in-fill development product was most highly desired because users want to be close to population centers.
“The first order of business for anyone interested in providing same-day or next-day delivery is to figure out how to serve the critical mass of consumers in any urban environment or location, starting with the biggest tier-one cities and then working down the list from there,” said Geoffrey Kasselman, executive managing director with Newmark Knight Frank in Chicago, in a statement.
The report found that last-mile properties are particularly desired by companies providing grocery or food delivery. Following Amazon’s acquisition of Whole foods, other retailers, including big-name ones such as Kroger and Walmart, are now offering delivery services requiring last-mile facilities. the challenge? Finding infill sites with the right parking and docking features.
What worries investors? More than 28 percent of survey responders pointed to ongoing trade wars and tariffs. The general consensus from respondents was that the U.S. economy could withstand a tariff of 10 percent. But it might not be to withstand a tariff that rises to 25 percent.
