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The commercial real estate sector has increased its focus on trucking-related properties as demand for facilities and space increases.
James Breeze, Global Head of Industry and Logistics Research at CBRE, said: “What we are seeing is that a lot of the people that we call occupants, who actually occupy buildings, are looking for more space to manage their inventory. “
Breeze pointed out that the industrial sector includes about 80% of the warehousing and distribution categories. The remaining 20% of him consists of manufacturing and some specialized facilities. He as a brokerage firm CBRE represents companies that invest in these properties and lease or resell them.
“There has been a big shift in the mindset of tenants about having more inventory,” says Breeze. “Before COVID, it was called a just-in-time inventory strategy. They basically projected how much inventory they needed. It essentially failed because COVID hit.”
Brees added that a shift in strategy is driving major demand for industrial properties. Overall industrial vacancy rates in the second quarter of 2022 fell 70 basis points year-on-year to a record low of 2.9%, according to CBRE research.
“If vacancy rates are very low, you can charge higher rents,” says Brees. “And when vacancies are at record lows, more space is needed, so we are also seeing record amounts of development.”
Breeze notes that 2021 was a record year for industrial property leasing. This is especially true for warehouses, where the biggest demand driver is leasing more space for inventory management. This year is set to be the second strongest year.
“The market continues at the fairly blistering pace of investment activity that has been going on for the last 24 to 18 months,” said Eric Foster, head of industrial capital markets at commercial real estate firm Avison Young. It wasn’t until late summer 2020 that people started to realize that we were unaffected by the pandemic.”
Foster noted that trucking is following the same trend across the board. This includes trailer depots, low-coverage transport nodes, transshipment facilities and increased interest in purchasing truck he terminals. He also has an interest in cold chain assets.
“This means aggressive high pricing will continue,” said Foster. “Demand from tenants remains strong due to the fundamentals of the industrial real estate sector. As such, rents remain high, which is beneficial to owners and landlords.In addition, supply chain issues and raw material issues have resulted in development People are a little constrained.”
DryPort Capital is a real estate logistics investment firm focused on acquiring properties in major transportation markets to provide truck parking. Its multi-tenant parking model allows large carriers and owner-operators to rent space on the same property.
“Truck parking has been a problem for years and decades,” said Mike Burney, DryPort’s real estate director. “For lack of a better word, it was a fragmented part of the logistics market. It’s just not institutionalized.”
Dryport recently acquired a nearly 20-acre truck parking and industrial outdoor warehouse development on August 19th. This property is located on Highway 90 in Katy, Texas. DryPort plans to build 325 spots of truck and trailer parking facilities. This site is controlled by its operating company, Riggy’s.
“We buy existing parcels that are already stable and operational,” Barney said. “We go buy them and spend a lot of capital to improve security. Many of these don’t even have fences. and leased to owners and operators on a monthly basis.”
TCN Worldwide is a consortium of independent commercial real estate companies. This includes companies dealing with industrial commercial real estate transactions, such as land development for the trucking industry.
TCN Worldwide CEO Ross Ford said: “That market is very strong. There has been so much development in that space. .”
Ford says the activity goes back several years. The early days of the COVID-19 pandemic were hit hard, but they quickly recovered. He said there is a sense that it has peaked in the past quarter and that activity is starting to slow down. I have seen it increase to
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