The same signs of increasing consumer spending that are expected to boost the retail real estate market are already positively impacting the industrial real estate market.
The New York Times cited Cushman & Wakefield data that shows the vacancy rate in industrial properties declined in the first half of the year to 9.7 percent, year-to-date leasing activity is up 27 percent from a year ago, and sales volume in the first half of the year grew nearly 160 percent compared to the same period a year ago.
Several companies have been especially aggressive in acquiring industrial properties, including Clarion Partners, Terren Realty Corporation, Morgan Stanley, the Cabot Group and CenterPoint Properties. But Blackstone Group may be the most active of all, which added 275 industrial buildings for $2 billion, tripling its portfolio.
And signs of the improving market abound in the New York area. In fact, the J.G. Petrucci Company is building a 570,000-square-foot industrial warehouse despite not having a single tenant lined up, one of the first properties built on spec since the recession.
“The timing is right because while rents are still low, there are clear signs that the market is tightening,” said James G. Petrucci, the company’s president. “I am confident that there will be any number of companies wanting this space by the time it is completed.”
But the Times notes that the industrial rebound has been limited to larger properties, as smaller entrepreneurs who would lease smaller space can’t get the financing to launch their businesses. [NYT]