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Industrial Tenants Face Sticker Shock Amid Spiraling Inflation

Red Right Arrow Ahead Showing Increase Profit Income

Renters of industrial properties are facing sticker shock in the current inflationary environment, with national effective rent growth expected to increase nearly 23% year over year in 2022.

“Although industrial has a reputation for shorter lease terms, the reality is that the weighted average lease term for industrial is around five to seven years, much like it is for office,” write Cushman & Wakefield economists Rebecca Rockey and James Bohnaker in a new analysis. “Many of the leases that are rolling today are therefore significantly underpriced on the tenant side, especially with escalations that may have been negotiated five to seven years ago.”

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Centergate at Gratigny Sells, Marking Florida’s Largest Industrial Sale Of The Year

CBRE has arranged the sale of Centergate at Gratigny in Hialeah.

The 3-building property, located at 5801 and 6301 East 10th Avenue, was sold on behalf of PRII CENTERGATE 1 LLC and PRII CENTERGATE 2 LLC, subsidiaries of Prudential Real Estate Investors, which acquired the property in 2015. The seller was exclusively represented by the CBRE Capital Markets team of Vice Chairman Chris Riley, Vice Chairman Christian Lee, and Executive Vice President José Lobón.

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The Next Big Trends In Industrial

Multi-story warehouse development hasn’t caught on quite yet in the US, but it’s a big trend in some Asian countries that would require an overhaul of 18-wheelers to be fully realized here, says Mike Kendall, executive managing director in Colliers International’s Irvine, CA, office.

Kendall oversees Colliers’ institutional industrial investment platform for the West Coast, teaming with local experts in various markets in that region. GlobeSt.com sat down with him for a chat about the top industrial capital-markets trends he’s noticing and anticipating to grow in 2018.

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