News
INDUSTRIAL COMEBACK
June 9, 2011
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| The industrial market's come back much faster than office, as such, lenders are starting to get more competitive on both pricing and risk for acquisitions and refis, Industrial Income Trust's Dave Fazekas said Tuesday at our Industrial Real Estate Summit. He says that's a big contrast to the environment nine months ago, when only the ?really strong stuff? got any attention (he calls that way of thinking the ?barbell theory?). Your prospects for getting debt and equity (or selling) an existing property along the B-W Corridor are strong, Dave adds, although it's still ?good luck? to anyone who wants to refinance a poorly located vacant property. |
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| First Industrial Realty Trust's Peter Schultz says tenant demand is slowly improving, but he still thinks capital is ahead of leasing fundamentals, leading to cap rate compression: ?Investor appetite for industrial deals is huge right now, and they're willing to take more risks.? A low interest-rate environment helped FIRT raise capital at a $100M-per-day clip several times this year, he says, although publicly traded REITs have more liquidity. Peter also thinks sustainable features can help win deals. ?If you can show users how much they've saved through efficient lightbulbs or whatever else, it gives them a reason to stay at your building, especially if your competition isn't offering the same.? |
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| We also snapped Cassidy Turley's Jon Carpenter with MCB Real Estate's David Bramble. Jon says his team has five deals totaling $150M under contract that are expected to close this summer. His team's got another two large office deals in Columbia in the market and is accepting bids on them next week. Those will likely combine for another $160M, Jon says. |
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| Jackson Shaw's Tom Aylward (in the brown jacket, with MacKenzie Capital's George Decker and RKS Realty's Beetle Smith) gave us an update on his favorite project in Laurel, The Brickyard. Seven of the 11 possible flex buildings on the site are finished, he says, and it's got room for 300k SF. The site originally housed an iron ore mine in the 1860s, and Tom says all the buildings are LEED Silver. Jackson Shaw has sold four buildings to users and landed three lead tenants there since 2009. |
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| Also on hand: Miles & Stockbridge's Michele Cohen, Unlimited Restoration's Rene Carter, SmartCEO's Kavita Thakrar, and Coakley Williams Construction's Mike Caulfield. Michele tells us landlords have been more flexible in the business risk provisions of leases for the past year, as well as rent. ?It's been a tenant's market for the past year and half,? she says, ?and it'll likely stay that way for the immediate future.? Still, she's happy to be in the Mid-Atlantic. Her son loves to fence, and she sees tough conditions in the other markets she drives him to for tournaments. |
