Largest Chunk Of Undeveloped Land Owned by Broward Up For Grabs

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One of the largest chunks of undeveloped land owned by Broward County is up for grabs.

“It’s probably one of the few areas that we still have in Broward County with acreage that’s not developed,” says County Commissioner Dr. Barbara Sharief.

The piece of land a hot ticket item for some. It’s 61 acres located near U.S. 27 and Sheridan Street in Pembroke Pines. E-commerce giant Amazon could now be the one to take over the land – if they still want it.

“I think it’s time to move onto the second rank vendor, which is Amazon,” said Sharief.

The county’s second choice is now the county’s number one. It had been Amazon’s idea to build on the land. In 2020, county commissioners decided for Vital Pharmaceuticals, which makes the energy drink Bang, to win the land instead. Sharief explains Vital was ranked above Amazon because they ensured a median salary of $62,000 to their employees, which the company eventually retracted.

“As we’ve gone through the process, they came back and said that was erroneously calculated, but we want to still do the deal and it just kept on dragging on, so at this point, I’m frustrated,” Sharief said.

The deal fell apart and now, the county wants Amazon. Now, it’s the waiting game to see what happens next.

“Amazon provides health care, they provide a decent wage and I feel like that’s two of the things people are looking for coming off of COVID. So, it really makes perfect sense to try to get Amazon to take this on,” said Sharief.

If Amazon were to build on the site, it would be one of its biggest projects. They would employ more than 1,000 people and the facility would support the entire delivery network throughout North America, housing household and consumer goods.

 

Source: NBC 6 South Florida News

Expect ‘Cranes Popping Up All Over The Region’: Eight Ways COVID-19 Is Reshaping The South Florida Real Estate Market

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The COVID-19 pandemic has forced the South Florida real estate industry to rethink the answers to a range of questions, including how buildings are designed, how goods are delivered, and where and how tenants want to live.

Here are the top 3 emerging trends local industry leaders are watching.

1. Outdoor Space Is Desirable

Retail stores and restaurants took a big hit as shutdowns, restrictions and health concerns changed consumer’s spending habits. Instead of going out to eat, people stocked up on food and avoided in-person shopping, causing a surge in online sales.

Jonathan Carter, executive managing director at Colliers International, says there are a number of deals being done to adapt current spaces to modern environments. And while outdoor environments and open-air concepts in retail stores and restaurants were trending before the pandemic, now there’s a bigger emphasis on it.

“If you had told me in August where we would be today, I wouldn’t have believed you,” Carter said. “The market has gone from having almost no tenants, to what he would now consider a landlord’s market. Landlords who previously had space with a lot of outdoor areas that weren’t perfect, suddenly those spaces are in demand.”

2. Drive-Thru Operators Are Thriving

Last year, the rise in demand for food deliveries, curbside pickup and drive-thrus at quick-service restaurants has been especially prevalent in South Florida, according to Zach Winkler, executive vice president of JLL’s South Florida retail brokerage.

“The demand for more drive-thrus is probably more intense here than any part of the country,” Winkler said. “I think it’s part of the way the restaurant world has shifted a little bit.”

Winkler said sales have remained strong for fast-food restaurants like Louisiana-based Raising Cane’s, and he expects to see an expansion of the chain in South Florida.

“Their sales remained very strong during COVID, and the fact that they’re one of the most efficient drive-thru operators out there,” Winkler said.

3. Offices Are Morphing

As large amounts of people continue to migrate to South Florida and many others prepare to return to the office after a year of working from home, companies are looking at different models for remote and in-office workers. With social distancing changing the way people interact with one another, employers want to give their employees more space and a healthy environment.

Jonathan Kingsley specializes in office and industrial representation of landlords at Colliers International, and he said returning workers are typically getting more square feet per person, while offices are being redesigned.

Remote work is here to stay, but Kingsley feels it won’t be on the scale everyone thought it would.

“Certain employees are absolutely required to work in the office 100% of the time,” said Kingsley, “There’s a second-tier in which there is a three-day at the office, two-day at-home model, three-day at home, and two at the office, and then there is another model where you work from home 100% of the time.”

Click here to for the remaining emerging trends.

 

Tiny Village Of Golf Rejects Amazon’s Plan To Build Last-Mile Center; Rare Rebuff For Retail Giant

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There will be no Amazon facility in the Village of Golf.

The Village Council just voted 4-1 to deny Amazon’s request to build a $25 million last-mile distribution facility on 17 acres at the southeast corner of Woolbright Road and Military Trail west of Boynton Beach.Its staff concluded the project “is not in keeping with the quality of life” within the village, home to about 300 people.

The vote, on a zoning change that would have permitted the Amazon facility, came at the end of a five-hour meeting. Tom Lynch cast the sole vote in support of Amazon. The rejection represents a rare rebuff for the e-commerce giant, which has generally been welcomed into communities for the jobs it creates and the extra taxes its buildings generate. The Village of Golf project was expected to generate more than $400,000 in annual local, school and county taxes.

Opponents Say Centers Such As One Proposed By Amazon Belong In Industrial Parks

Amazon’s last-mile delivery stations are the final stops prior to direct delivery to customers. They are much smaller than the fulfillment networks that are often 1 million square feet and are comprised of state-of-the-art technology to support processing customer orders.

In October, Amazon opened a 96,000-square-foot last-mile warehouse west of West Palm Beach. And it expects to build much larger fulfillment centers in suburban Jupiter and Boca Raton.

The argument that the proposed Golf site was too close to residential areas resonated with village council members, as critics claimed these types of facilities belong in industrial parks.

Current zoning in the village permits seven separate warehouses on the site, totaling more than 100,000 square feet. Amazon was looking to change that zoning to permit a taller, single 72,000 square-foot building.

There was intense opposition from residents within the Village of Golf itself and nearby Delray Dunes Golf & Country Club, which hired its own experts to testify against the zoning change.

Amazon attorney Harvey Oyer noted that numerous concessions were made to address issues that area residents had raised. The building height was lowered, and the building was redesigned at great expense to reduce impacts on Quail Ridge, the community most impacted. The changes were enough to gain the support of the golf-course community. And to sweeten the pot, Oyer said his client was prepared to deed over a 2.3-acre site on the parcel to the village, a donation worth more than $2 million.

But one resident said, in response: “You put lipstick on a pig, it is still a pig. This is an industrial warehouse in my back yard. This is not suitable in a residential area.”

Developer Plans To Build Seven Separate Warehouses On 17-Acre Site

The village staff expressed concern over Golf’s ability to withstand legal challenges from Amazon if, in the future, Amazon should ever sue over agreements negotiated between it and the village.

Village Manager Christine Thrower-Skinner has previously questioned what might happen if Amazon ever relocated from the Village of Golf site.

“The Village would be stuck with an empty single-purpose build with a limited opportunity for reuse,”  Thrower-Skinner said.

Steve Mackey, the developer who owns the land, said he will now move ahead with  plans to bring the seven warehouses permitted under village zoning to the property. He said he believes the Amazon plan would have been more appropriate for the site.

Oyer argued that the seven-warehouse plan will result in even greater density and more traffic than the last mile-distribution facility, whose trucks would enter and exit during non-rush hour periods.  He questioned the criticism that the village does not have the resources to withstand a legal challenge from Amazon.

“What about Publix or other corporate entities? Is if fair to single out Amazon?” Oyer said.

 

Source: Palm Beach Post

Most CRE Executives ‘Bullish’ For 2021

The COVID-19 vaccine rollout and an abundance of capital looking for deals are the top reasons why 74 percent of commercial real estate executives said they were optimistic about the CRE market and overall economy over the next 12 months, according to the results of the annual State of the Market Survey released today by international law firm DLA Piper in conjunction with its 16th Global Real Estate Summit.

 

 

The 2021 survey was conducted in February and March after Americans had elected a new president and vaccines were being distributed leading to a significant increase in optimism compared to 2020 results. By comparison, the 2020 survey was conducted in August and September with results released in October. At that time, the U.S. was in the midst of a contentious presidential election and it was still unknown when vaccines would actually be available.

“We were happy to see the positive shift in sentiment from our 2020 survey taken in the early fall of last year,” said Barbara Trachtenberg, co-vice chair of DLA Piper’s U.S. Real Estate Practice and co-author of the report.

Trachtenberg said there had been “a lot of uncertainty when we conducted the 2020 survey. A lot of that seems to have settled.”

When asked the primary reason for their confidence about the CRE market for the next 12 months, 41 percent of the respondents cited “continued rollout of COVID-19 vaccines”; 35 percent cited “abundance of capital still chasing deals”; and 18 percent pointed to the “U.S. economic outlook.”

The report noted “a significant amount of capital is expected to hit the CRE investment market in 2021 as more than US$200 billion sat on the sidelines in 2020 waiting out the uncertainty.”

Much of that capital is likely to be invested in the logistics and warehousing and the life science/biotech sectors, which were called “bright spots for the industry.”

When asked which asset classes present the most attractive risk-adjusted opportunity in the U.S. during the next 12 months, 61 percent chose logistics and warehousing and 57 percent selected life science/biotech. Multifamily (49 percent); data centers (44 percent); medical office (37 percent); cold storage (36 percent); industrial, excluding logistics and warehousing (33 percent); affordable housing (32 percent); senior housing (25 percent); and hotels/lodging (22 percent) rounded out the top 10.

The report found multifamily housing has almost completely returned to 2019 survey levels, down only 1 percentage point and up significantly from the 2020 survey when only 35 percent of respondents considered multifamily an attractive investment.

Which of the following factors will have the greatest impact on the global commercial real estate market? Chart courtesy of DLA Piper Annual State of the Market Survey 2021

Trachtenberg said the results for logistics and warehousing, life science/biotech and multifamily were consistent with the activity DLA Piper has been seeing in transactions it has handled in the fourth quarter of 2020 and the first quarter of this year.

REMOTE WORKING IMPACTS

While respondents were enthusiastic about returning to the workplace, with 60 percent anticipating about three in four office workers will be back in their offices full time 12 months from now, there are still major concerns about lingering impacts of the pandemic on the office sector.

Eighty-six percent of the respondents believe remote working and work-from-home will continue to impact the commercial real estate market for the next 12 months. Fifty-eight percent of responders believe there will be an increase in the number of office workers who spend less than 50 percent of their working time in office buildings. Eighty-four percent anticipate it will take at least two years for U.S. office building vacancy to return to pre-pandemic levels and 46 percent said it will take more than three years.

That may be part of the low scores for both suburban office (13 percent) and downtown office (11 percent) as an attractive asset class for the next 12 months. The report noted the interest in suburban office, which had hit 21 percent in the 2020 survey, may have been a temporary surge last year.

HOT MARKETS

The survey found the largest cities, including New York City, Los Angeles, San Francisco and Washington, D.C., continued to see a decrease in attractiveness to investors, likely due to impacts of the pandemic. Washington, D.C., for example, had decreased by 8 percentage points from the 2020 survey. But Trachtenberg warned not to count out major cities so quickly.

“For stable cities like New York, I think they are going to rebound. They always have. They always will,” she said.

Much of the investor activity has been focused on secondary cities, a trend Trachtenberg noted had begun before the pandemic hit and accelerated during the past year.

Austin, Texas, maintains its status as the No. 1 city in the U.S. for investment during the next 12 months at 53 percent, up 4 percentage points from the 2020 survey. Nashville, Tenn., holds second place again, with 46 percent.

Forty percent of respondents selected Raleigh-Durham in North Carolina as attractive investment locations and Denver and Charlotte, N.C., both had 32 percent of respondents picking them. Phoenix and Miami also increased in popularity from the 2020 survey, up 11 percentage points and 17 percentage points, respectively. The report noted Tampa, Fla., was the most common write-in answer as a “sleeper city,” followed by Salt Lake City and Charleston, S.C.

“Clearly there is a lot of interest among commercial real estate investors in being in those ‘second-tier cities’ that are really now topping the list of where people want to be investing,” Trachtenberg said.

 

Source:  Commercial Property Executive

Expert Roundup: Brokers Discuss Industrial Real Estate

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Since the pandemic started affecting the U.S. economy last March, industrial real estate has proven to be the bright point in an otherwise challenging real estate market.

As part of CommercialCafe‘s Expert Roundup series, a number of commercial real estate experts from across the country give their takes on why the industrial asset class is so resilient, what challenges it still faces, what the near- to mid-future has in store and even break it down to a regional perspective.

Industrial construction projects in the U.S. are projected to eclipse 342 million square feet in 2021 – the highest in five years. What are the main drivers of this expansion?

Grigoriy Azayev

“The main drivers of the accelerated expansion we see in industrial construction projects in the U.S. and abroad are the following:

Due to stay-at-home orders and lockdowns throughout the U.S.,people had no choice but to shop online for household products, clothing,equipment, and food. The e-commerce and last-mile delivery trend has beenemerging rapidly for the last five years, but the pandemic accelerated growth and demand to numbers and targets that no one in the industry expected to see until 2030 (ratio of online sales vs. in-person retail shopping and dollar amountsspent online in purchases).

But the writing was on the wall for quite sometime pre COVID 19..The retail experience has changed dramatically in the last 10 years, and year-over-year,less Americans go to physical brick and mortar stores for everyday consumer goods. Instead, they’re opting for online platforms which have been improving their ease of use, variety of products, and most importantly: delivery speed. It doesn’t pay to get in the car and drive 30 minutes to the store, walk around the store for an hour putting your goods in the cart, and then driving backhome, if for the same price, I can click a few buttons and have all my goods delivered – sometimes as quickly as 2 hours.” 

Steve Buss

“Right now, three major factors are driving industrial demand — the rise of e-commerce; manufacturing growth due to reshoring; and supply-chain diversification. All three were accelerated due to the pandemic..

E-commerce was a huge driver of industrial real estate expansion before the pandemic and — after a short pause initially in 2020 — it’s only expanded in cities of all sizes.

Industrial real estate demand is a natural reaction of the marketplace, which has doubled down on online sales — not just business to consumer, but also B to B. Corporations are expanding how much they’re willing to buy via e-commerce just like household consumers.

We’re living in a world where competitive delivery pressure is ratcheting up every day. Everyone needs to find warehouse space to help them deliver goods to their customers. They want to offer expedited delivery and develop last-mile e-commerce supply chains to compete against giants like Amazon.

Fulfillment and third-party logistics companies are increasingly in need of distribution centers within a short distance of urban and suburban areas. That’s not going to change. Demand is only going to grow, especially in secondary and tertiary markets. In-fill industrial — as well as new construction — will continue to grow in 2021.

Will Curtis

“The biggest things that has driven the growth in industrial is online shopping and the changes in the consumer purchase process. Between delivery driving the need to last-mile distribution to the click and pick up has increased the need for warehouse space for retailers.

The other thing that is adding to this trend is the move to suburban office space and looking at flex properties to combat COVID concerns like shared common areas, elevators or shared HVAC systems. Flex buildings have the ability to mitigate those issues and have driven the demand for more industrial demand.”

Fletcher Dilmore

“One of the main drivers of this expansion is that traditional big box retailers are conceding market share to online retailers, creating increased demand for industrial warehouse and fulfillment space from these growing online retailers who do not have a traditional physical presence.”

Michael Edwards

“Construction on industrial projects is booming, because we’ve seen consistently that despite periods of economic uncertainty or even crisis, industrial properties tend to remain stable. This means consistent cash flow and reliable investment growth. Industrial may not be the sexiest part of the real estate industry, but it might be the steadiest right now.

Additionally, sectors like e-commerce, data centers, and self-storage have recently seen higher-than-normal demand, and low supply. The onset of the COVID-19 pandemic accelerated the need for infrastructure to support these industries.”

Max Levinston

“Industrial was already growing at a fast pace before Covid, and this pandemic has accelerated many of these trends. In our market warehouse space either for sale or lease is quickly absorbed, both by investors and owner users.”

Bruce Lowry

“In our experience, the drivers in construction has two main drivers, (1) increased demand for warehouse space in general and (2) the lack of modern industrial and warehouse space. Increased demand for industrial warehouse space has significantly increased over the past several years as consumers have increasingly changed their purchasing habits from brick and mortar in person purchases to online orders with door step delivery. The global pandemic has increased this demand for door step delivery of online goods and services including perishable goods such as groceries.

Older consumers were forced to learn new technology and they are learning that they like the convenience of door step delivery. In turn, this increased demand for online ordering and door step delivery has increased the demand for both large warehouse projects and so called last mile warehouse space.

Secondly, outdated building infrastructure including lack of access to technological innovations such as communication and data infrastructure, buildings designed for automated sorting and delivery systems are increasing demand for newly constructed warehouse and manufacturing space. Buildings with narrow spans containing repetitive floor to ceiling support structures simply will not accommodate modern automated manufacturing and warehouse logistics systems and these buildings are being replaced with structures that contain these innovations.”

Bryan Shaffer

“E-commerce sales was growing before the pandemic, but the crisis accelerated this trend, with consumers unable to obtain goods from some retailers. Further, it was harder for manufacturers and sellers to get their goods to the market therefore many small suppliers have partnered with Amazon to keep their distribution line open. Overall, year over year industrial values increased 8.1% from February 2020 to February 2021, more than any commercial real estate asset class. The E-commerce sales resulted in much stronger demand for logistics and more demand for cold storage space.”

 

Industrial real estate has fared better that other asset classes in the last year. How has 2020 affected the industrial market this year and beyond?

Grigoriy Azayev

“The industrial market in 2020 has become the sweetheart ofCRE. Everyone is chasing industrial deals and some of the biggest players inother asset types are jumping ship to bid on industrial deals. Unfortunately,it is creating a supply shortage in the market throughout the country, and prices for both leases and investments are on the rise. I don’t see this trend slowingdown because companies like Amazon have publicly stated they want to doubletheir square footage in the next year and are paying top dollar for class A industrial space and land. Regrettably, it’s weeding out the little guys and small-to-mid-size businesses that also rely on supply chains and logistical real estate.”

Steve Buss

“Another huge factor driving demand for industrial real estate is a much greater awareness of supply chain risk, which was exposed due to the pandemic shutdowns. Shortages of all types of goods revealed just how tight supply chains were for many sectors. For example, some U.S. automakers weren’t able to operate because they couldn’t get onboard computer chips. That led to sustained automotive inventory shortages. Until the pandemic, that was an unseen or under-rated risk in the supply chain. Now, it’s impossible to ignore such risks. Businesses are diversifying those supply chains and rethinking how they manage risk, including where they want to store finished goods.

While it’s typically more profitable to run a really tight supply chain, businesses faced a rude awakening and discovered it’s also much riskier. Businesses and their customers found they were taking on far more risk than they realized by holding very little inventory. They weren’t ready to handle the supply chain disruption. Now, they’re asking how much more inventory they should have on hand to make it through the next supply disruption.”

Will Curtis

“Certainly of returns is always going to drive investments. With large players like Amazon, Walmart, and others that they need additional warehouse space has added to the investment-grade properties and brought in more demand.”

Fletcher Dilmore

“2020 has made industrial real estate an essential asset class. Distribution and warehousing went from being apart of everyday business to being the everyday business. Had it not been for the pandemic, I think it is safe to say we would not have seen as quick of an adaptation of online grocery shopping, something that had been available, but was a minuscule amount of overall grocery sales in previous years. ”

Michael Edwards

“2020 was quite a year – and it was fascinating to see the shifts in the real estate industry. In commercial real estate in general, most markets saw a decline in demand – but industrial saw a significant increase in growth and investment. We anticipate that investors will be eyeing industrial properties favorably in the months ahead.

Part of the reason for this growth in industrial investment is the consumer behaviors that accelerated e-commerce and data centers when the pandemic rocked our worlds last year. Grandparents who’d never ordered anything online before were suddenly getting groceries delivered and medications shipped and birthday gifts sent directly to their kids and grandkids from fulfilment centers. We expect this trend to continue, so demand will remain for the industrial properties needed to support those activities.”

Max Levinston

“Online shopping has been a huge reason for the increased demand. Many of these shifts in consumer shopping will not revert back once we’re further out of this pandemic..” 

Bruce Lowry

“The industrial and warehouse real estate market is strong and the demand for new industrial and warehouse properties across all sectors will continue as companies innovate and automate their manufacturing, logistics and delivery programs. We see only increases in this sector for the foreseeable future due to high consumer demand for e-commerce goods and the need to continue to automate manufacturing facilities.”

Bryan Shaffer

“The pandemic forced people to adapt to E-commerce. It likely pushed forward the market in the US by 5-10 years. People who were possibly thinking of looking at eCommerce were forced to utilize it during the pandemic to receive their needed supplies and services. In addition to industrial logistics demand, the vaccine also created more cold storage space. New technology has also developed quicker because of additional capital being invested in this space.”

 

Are there any other use-types besides e-commerce and cold storage that you see expanding more in the future?

Grigoriy Azayev

“We’re starting to see some secondary uses come into play,such as fleet parking for delivery providers and there has is a growing demand for movie studios and film production campuses in New York City. This is due to some excellent tax incentive programs for film production here and tremendous demand growth for instant and fresh content. There is also movement in the smaller “maker spaces” and manufacturers here in New York and other cities. The costs of shipping andoutsourced manufacturing on the rise, paired with long delays of production due to COVID-19, the cost of manufacturing in the U.S has become comparable to outsourcing due to a growing supply chain. It has become more and more seamless and cost-effective to manufacture all types of goods here in the states.”

Steve Buss

“Another issue that will drive industrial real estate in the years to come is reshoring or bringing manufacturing operations back to the U.S. Because of the pandemic supply chain issues, some companies are less convinced they want all their goods coming from one country like China if they can find local alternatives.”

Will Curtis

“In San Antonio, we are seeing a huge push for Cyber Security. Flex space is showing as a great cost-effective option compared to traditional office buildings. Cyber Security SCIF (Sensitive Compartmentalized Infrastrcture) is expensive to build out and flex gives a lower-cost option. Things like Port San Antonio has been a huge driver for the growth in San Antonio.”

Fletcher Dilmore

“I have seen an increase in demand in my local market for smaller flex space by tenants that have a specialized manufacturing or business specific needs.”

Michael Edwards

“Data centers, undoubtedly, will continue to grow in importance and their needs will evolve along with the technology that’s stored inside them. We’ve also seen self-storage grow over the past few years as a result of more people moving to smaller homes in urban settings. And, self-storage is a sector that tends to resist the overall trends during economic slowdowns – including this COVID-related one. More people than ever before are “working from wherever”, which means they can put their things in storage and hit the road.”

Max Levinston

“Self-storage and flex spaces.. Many investors are targeting the lucrative nature of self-storage, both industrial conversions and new construction. Flex space is also highly desirable for companies who need a few offices/conference room for staff which is connected to the warehouse.”

Bruce Lowry

“Self-storage and flex spaces.. Many investors are targeting the lucrative nature of self-storage, both industrial conversions and new construction. Flex space is also highly desirable for companies who need a few offices/conference room for staff which is connected to the warehouse.”

Bryan Shaffer

“Industrial overall is very affordable to build. Over time I expect to see an over-supply. This usually happens with real estate asset classes after they become over heated. I believe that e-commerce will drive more activity and offer a hybrid space between industrial and retail and logistics space will be incorporated into current retail properties. Walmart is an example of a brand where we are seeing this trend now.

The other likely impact on industrial will be the emergence of more food service, commercial kitchens, located within industrial properties, which will service the food delivery companies.”

 

What’s the #1 challenge industrial is facing in 2021?

Grigoriy Azayev

“The biggest issue that industrial real estate faces is beinga follower of the market rather than the leader. It’s great that Amazon candeliver my package to me in under 2 hours here in NYC from one of their manyfacilities, but if workers don’t return to the office and come back to living in the city, to who will they be delivering these packages? At the height ofthe pandemic, vacancy rates in NYC for residential buildings touched 25%, and to-date,offices are still at 15% occupancy. These huge investments into last-miledelivery will be a tremendous loss if the theme continues and people don’treturn back to NYC.

The second issue is more industrial real estate leads tomore air, water and noise pollution, and a substantial increase intraffic. In NYC, there is scarce industrial space and they depend on only a fewmajor roads that trucks can go on to reach the facilities. There are more andmore trucks and vans on the road, causing ridiculous traffic, and it’s alreadybecome an ongoing concern in the city.”

Steve Buss

“Industrial real estate is one of the few big winners of the pandemic. We see enormous investment potential in industrial properties due to the expansion of e-commerce and the growing demand for warehouse space. We’re expecting growth not just in big cities, but also in secondary markets, particularly in the Midwest.

For tenants looking for industrial properties to lease, it’s very competitive. It’s hard to find space. Due to high demand, industrial rents are going up. When tenants get ready to renew their leases, they’re getting sticker shock. They’re not used to that. That all means, of course, that industrial real estate is a particularly sound investment.

While many bigger box distribution centers are going up in the biggest markets, we see huge potential for developing or building smaller industrial properties closer to urban centers in secondary and even some tertiary markets. You can find 20-, 30- and 40-year-old buildings in excellent locations and make them very functional for multiple tenants. If you stay near urban centers, you can deliver last-mile supply chain accessibility, but also access to workers.”

Will Curtis

“Lack of inventory and pricing smaller users out of the market. I am working with a client now, who is more price-sensitive and we simply can not find space and the few things we do find are more expensive than what can be unwritten into the business plan.”

Fletcher Dilmore

“Keeping up with demand with functional product. Industrial has been the safe haven for real estate investors during COVID, but that doesn’t mean all industrial product is created equal or as equally valuable. There are many industrial buildings across the U.S. that are for practical purposes functionally obsolete. This can be because of low ceiling height, inadequate power supply, difficulty moving trucks in and out, lack of proper sprinkler systems, distance from major transportation arteries, etc.”

Michael Edwards

“We feel really optimistic that challenges will be few for industrial properties this year, at least relative to the opportunities in this part of commercial real estate. But it will be interesting to see how many people miss shopping in brick and mortar stores or having face-to-face interactions, cutting into the growth of e-commerce. We don’t expect that to happen, but it’s something industrial investors should be looking at.”

Max Levinston

“Supply, the availability is between 1 – 2% right now for quality industrial space, both for lease and for sale.

Developers cannot keep up with the demand which has also caused the prices of industrial land to go up as well. We’re seeing the prices/sq ft go up and some buildings getting leased before construction is completed.”

Bryan Shaffer

“Developers will race to add more industrial and flex inventory to the market because of the lower cost compared to other types of real estate and the current low vacancy rates. At the same time, overall changes in the retail market caused by e-commerce, will lead to more repurposing of existing better located retail properties into some type of hybrid distribution/ retail projects. Both factors together can lead to oversupply in some markets. Markets with higher land cost and more limited development opportunities will out preform markets with unlimited expansion potential. The long-term need is going to be for better located properties closer to shipping and population centers This will ensure that products can be delivered quicker. For 2021, I believe industrial will overall remain very strong, but the new growth in development may hurt the asset class in the future.”

 

Source: CommercialCafe