CCIMs: Getting Busy With Industrial Deals
The 2Q14 CCIM Quarterly Market Trends Report has “dropped,” as the kids say. What’s in the fine print? Growth. The second quarter of this year has extended a strong national trend in increased dealmaking for industrial real estate. The businesses of making and moving stuff — manufacturing, logistics, warehousing — are lending strength to markets in associated properties, with 82 percent of CCIM members reporting they had received more serious inquiries from buyers over the same time period last year.
Industrial transaction activity jumped for 70 percent of CCIM Institute members who responded to a May/June 2014 transaction survey. Members of the CCIM Institute, a global commercial real estate affiliate of the National Association of Realtors, also experienced positive overall transaction and investment activity in the second quarter, according to the organization’s Quarterly Market Trends report. Approximately 54 percent of CCIM respondents reported greater overall deal flow than the same period last year and 66 percent reported more inquiries from serious buyers year over year in 2Q14.
Industrial asset prices were higher for 52 percent of respondents and remained flat for 40 percent of members. Capitalization rates for industrial properties held steady for 60 percent of members; 32 percent said cap rates declined YOY. Industrial investments also registered highest on the investment value vs. price scale, coming in at 3.2 percent on a scale of 1 to 5 (with 1 being lowest and 5 being highest).
Industrial isn’t the only sector that has enjoyed year-over-year growth, with retail, office, multi-family and hotel also posting gains.