In the real estate market, one of the most important criteria for investment decisions is the analysis of factors that raise the value of the investment object.
Industrial real estate investments historically give you the highest yields compared to other (real estate) sectors. As confidence in real estate starts to rebuild following the spring of 2020, the industry will face a number of fundamental shifts that will reshape its future.
IPG Brokerage has studied and lived through changes in the real estate landscape and identified the key trends which, we believe, will have profound implications for industrial real estate investment and development.
Industrial Real Estate Has Stayed Strong Through The Pandemic
Interest in industrial real estate has considerably increased, making it a key sector of the real estate market in the United States.
Over the past twenty years, industrial properties have provided a relatively stable source of income for many investors, providing trustworthy returns and making sure that the industrial real estate sector continues to be an evolving and dynamic market. Many factors of real estate investing have shifted over the past two decades: Everything has changed, from the political and business environment, the specificities of investments in property, determinants of profitability, tenant estoppel, etc.
Industrial Real Estate is the new “it” thing in the world of real estate.
The industrial real estate class was mostly overshadowed by sectors such as residential and e-commerce real estate. However, investors finally saw that industrial real estate is a prominent asset class and plays an important role in income generation and keeping any global supply chain running smoothly.
Expanding technology used to alleviate the experience
The expansion of many industries requiring industrial and warehouse buildings is causing changes in industrial real estate. Properties such as those used for research and development, have beneﬁted from improved technology, and the performance of warehouse properties served as large-scale distribution centers, attracting more attention.
Technology highlights the impact of business economic activity on land values, and it may be used as an index of the importance of business subcenters without outlying business intersections (blighted areas).
Industrial properties enhance the utilization of property
Many real estate specialists are up for recycling industrial properties as a way to prevent them from becoming abandoned. Also, many studies have elaborated on how to handle vacant warehouse properties and suggested converting them into residential.
While thinking of all the scenarios on how to make older properties good investments, make a note that industrial properties are one of the stronger performers in the real estate industry and that innovative management could rejuvenate older industrial properties, making them outstanding investments.
Adaptive capacity and design
Various studies have examined physical characteristics such as capacity and design, as an important factor for understanding the productive capacity of the facility.
The design capacity is the most important measurement for an industrial engineer, but other factors such as flexibility in technology and capacity expansion are also important in industrial property design. Maximizing potential uses for industrial sites and structures leads to higher returns for investors.
Also, fast-growing cities are going to be presenting a wider range of risk and return opportunities. The greatest social migration of all time – chiefly in emerging economies, will drive the biggest ever construction surge. Industrial sites and the land they are on will continue to hold value.
The commercial real estate world is constantly evolving, partially thanks to the continued integration of technology at all levels of the industry and across all property types.
Of course, investor challenges persist as well, bringing generational changes, evolving occupier demands, and increasing much-needed specialization of product types.
As we have entered a new decade, we need to carefully examine all the current and future trends that are likely to shape the national commercial real estate markets, from this year and beyond. This is why IPG provides help to investors and tenants in taking action steps to capitalize on new opportunities.