Industrial Real Estate Market, Set To Create Record Breakthroughs in 2017

2016 was truly a record-breaking year for US’s industrial real estate sector. The previous year saw this sector’s demand outpace its supply, and this trend isn’t slowing down in 2017. Because of this bullish trend, the sector’s vacancy rate has driven down to 5.8 percent-this was the figure, which was released by JLL Industrial Investment Outlook, in the third quarter of 2016.

Interesting findings

Because of this trend, the landlords are benefited as the rates of rents rose up to 8.2 percent when compared with those in 2015. Seeing this trend, the investors-are grabbing the opportunities to buy real estate in this expanding market and leveraging the private sector financing via commercial mortgage lenders.

In the industrial real estate sector, the year-over-year investment is down by 28.9 percent from the third quarter of 2015, but the total investment volumes look to be on track because they’re all set to create the second-largest tally since the Great Recession.

Due to this, 2017 has a few uncertainties as far as the industrial real estate is concerned. However, the overall outlook of this sector continues to appear optimistic. The mix of uncertainties and optimism defining today’s real-estate sector has motivated us to give you five top factors that’ll drive the industrial real estate’s demand this year.

Trends that’ll shape 2017’s industrial real estate

Reviving infrastructure

The buzz about the rising infrastructure spending in the US is growing. And the growth of the spending has seriously become faster after Trump has expressed his interest in strengthening and improving infrastructures, such as roads and bridges. And it is a no-brainer that a growing infrastructure spending will surely create a rippled effect on the mighty industrial real estate.

Evolving urban logistics and e-commerce

E-retailers are working pretty hard to ensure that their supply chains are streamlined so that goods are always delivered to end-consumers rapidly and cost-effectively. These e-commerce players are continually finding innovative distribution centers that can feed a consumer’s e-commerce appetite today. In the second part of 2016, the e-commerce growth was one of the key factors that pushed down the American industrial market’s vacancy to less than 6 percent. And this vacancy is continued to decline even more in 2017. A good case in point: Distribution and Marking Services Inc. leased nearly 350,000 square feet of Wonderland Industrial Park’s space in California. The site’s strategic location to speed up the move-in was very critical. So in the future, more of such shifts may happen, which will certainly improve industrial real estate’s growth prospects.

Ports may reap a number of benefits from the updates in infrastructure and e-commerce

Swift growth in e-commerce is expected to contribute to reviving America’s port systems. As the demand for warehouses and mixed infrastructure strengthens, US ports may reap benefits too. The coastal ports in New York and Los Angeles are the favorites for many leading players in today’s industrial sectors. And with repurposing obsolete terminals and increasing infrastructural spending, this year could be the one when the Mississippi waterway reclaims its glory within the global supply chain. Because of such factors, the demand for industrial real estate in this sector is expected to grow.

The institutional investor’s interest goes sky-high

When it comes to making sizeable investments, industrial real estate gives its lenders super-lucrative opportunities. So if you’re a lender looking to improve your commercial capital, then speculate in the industrial realty sector. In fact, as per educated guesses from leading real-estate pundits, the sale volumes of year-end industrial investment can cross the $45-billion mark. Every time, the high-volume investment activity is indicative of the asset class’s capacity to weather financial, political, and economic uncertainties.

Creative industrial realty development is rising

The unprecedented demand for industrial real estate and the push to improve delivery services may easily influence development across the US. This development may further persuade a lot of companies to find a space in secondary or even tertiary markets. Because of this, small-sized urban-core warehouses, reconverted assets, fulfillment centers, and multistory warehouses can easily become solutions for several businesses this year.

As there are many changes taking place in regulations and policies related to trade, transportation and storage sectors might easily get affected. Nevertheless, the fundamentals remain, like always, strong. The construction and infrastructure are doubtlessly looking promising owing to the growth of e-commerce. Because of all these driving factors, we’re pretty optimistic about the prospects of industrial realty sector flourishing in the coming time.

Assessing The Commercial Real Estate Market In Broward County

The industrial and commercial real estate scene in South Florida has been positively impacted by global markets in a lot of ways. This area has benefited from it’s major role as being the “Gateway to the Americas,” and port traffic is also increasing from Asian countries.

Analysts think that this relationship with Latin European and Asian markets will help in the revitalization of the region’s slumping residential markets, and make the commercial property markets fully rebound as well.

Higher Land Prices And Development Costs Are Putting Some Pressure on The Commercial Markets

Current high land prices, coupled with development costs, have helped lessened the building of new industrial inventory, and some real estate professionals forecast construction increasing, as the slump in the residential market may ase material costs in the long term. But, as economic growth in the Asian and the Indian subcontinent may keep the prices for steel, concrete and other building supplies high, this could in turn limit how much speculative space is brought on to the market. Broward County’s commercial and industrial real estate market has remained well below the national average vacancy of approximately 10%.

Some Commercial Property Developers Are Adopting A Wait-And-See Attitude

Many have surmised that some commercial real estate owners and developers appear to be holding on to their investments, as solid returns slowly start coming in during current market conditions. Low vacancy rates, coupled with the lowering currency, make South Florida’s commercial and industrial real estate market a prime investment opportunity. Property owners and developers in this area may may take advantage of conditions once the market shifts more to a tenant’s market, and the vacancy opportunity increases as well.

How The Future Looks For The Area’s Commercial Property Market

Real estate professionals in this county continue to remain bullish on the industrial and commercial real estate sector, while others are noting that signs of a downturn are beginning to surface; however, there are many factors and conditions that may have an impact on the market during the next economic shift.

The scarcity of industrial-zoned land to develop speculative inventory may continue to help low vacancies and demand higher rental rates, however if the residential sector continues to slide, developers could adopt a wait-and-see attitude and cancel or restructure their future plans.

Broward County however, is viewed to be a durable market during the next dip in the economic cycle. It is expected that commercial real estate vacancies will rise in this area, sublease space will come on the market and asking rates will eventually stabilize and go down; however, disciplined development coupled with South Florida’s strong ties to the global market and the import/export sector will continue to help the area’s commercial property markets weather the mortgage slump.

Toronto Real Estate Market

Confused about where to invest? Well, let’s peep into Toronto, for the time being. It houses a full extensive range of investment prospects. Whether you are interested in brown and green fields, port lands, developed urban areas or expansive suburban parks, Toronto has it all! The diversity in Toronto is further complimented by outstanding access to customers, suppliers and trained plus talented labor!

This might be the attraction that foreign investors fall for as there has been a considerable rise of investors in the real estate industry of Toronto! In 2010, this phenomena showed a 5 times increase when compared to 2009. The potential of the Toronto market is not hidden and this new wave of foreign investments is quite encouraging. It is leading the sector of real estate towards success, stability and establishment. Normally, Toronto is on the hit list when it comes to large scale investments in the real estate market. While every other market is suffering from the economic recession all over the world, the Toronto’s real estate sector doesn’t seem to have taken much effect. Due to the massive foreign investment, the market is gradually preparing itself to move towards the next step of higher success, reputation and establishment! The time isn’t far when Toronto’s real estate market would be on the top list of most valuable markets all around the globe!

The major foreign investors who have led Toronto towards this honorable status are the Russians, British, South Koreans, Venezuelans, Greeks, Chinese and people from Ireland. Recently, the citizens of Iran have started taking interest in this blooming sector and their main focus is on vacation homes. So you might soon here people boast about having holiday homes in Toronto, just like they brag about having summer homes in France!

One more significant factor behind this foreign investment trend could be the social tolerance existent in Canada. You rarely find information related racism, class system, gender discrimination, religious discrimination, prejudices or other forms of negative behaviors. The welcoming nature of Canadians irrespective of the person’s religion, class, creed, nationality or culture has attracted the South Asian countries. The impact is influential enough to change the direction of real estate business investment from USA or UK towards Canada.

Today, Toronto is thought of as one of the most visited cities on the planet, Earth. This is yet another major reason which lures the endless inflow of foreign investors and helps them decide where to pour their precious money. Of course the choice is clear! Exactly who would not want to invest in a tolerant, developing and well-renowned market? Especially when the authorities of the market themselves encourage and boost you to come and invest and gain- in simpler words, offer you the membership of the leading real estate market of the world! Therefore, due to all these inspirations, it seems quite obvious and the only right choice to fall for Toronto as it is an emerging, global leader in the real estate investment sector!