Views from SIOR Chicago Fall World Conference
Just returned from a short week in Chicago, site of the SIOR Fall World Conference. Just about 1,000 attendees and lots of opinions!
- Overwhelming opinion is this industrial real estate run has lots of legs left to it. In fact, at the risk of sounding overly-optimistic, most people don’t see an end in sight (of course, isn’t that the time you should start cashing out!!??).
- Nationally, vacancy rates are at an all-time low and rates continue to rise. Speculative construction in many markets is having a tough time keeping up with demand.
- E-Commerce continues to be the driver. Biggest challenge is to get closer to the customer (last mile). Imaginative ideas even include multi-level warehouses (Prologis – Seattle & San Francisco). Redevelopment of urban sites. Re-use of previously thought to be obsolete real estate.
- Lots of cash out there still. Investors chasing less product. Driving returns lower.
- Regionally? Still seeing a product shortage in high quality industrial real estate. Most of what is being built is just about spoken for (few exceptions). Bifurcated market however. Less-than-high grade space continues to struggle to be absorbed. Don’t see that changing in the near future. Distribution center construction market continues (Trader Joe’s/Bloomfield and recently announced 234,000 SF auto parts deal at New England Tradeport).
We’ll keep you posted!