Wilson says here is a high likelihood of a recession within the next few years, and e-commerce demand should help insulate multi-tenant industrial from economic cycle factors more than other asset types.
HOUSTON—Due to the continued fervor for e-commerce and demand due to damage from Harvey, a Silicon Valley-based real estate investment firm is optimistic about the industrial asset class during this point in the market cycle. This optimism is obvious by the fact that Wilson Investment Properties recently acquired an industrial portfolio of 19 buildings in six industrial parks, primarily located in northwest Houston, spanning a total of 460,000 square feet.“We feel that the growth of online retail will continue to put pressure on existing industrial assets as space demands remain high,” Tom K. Wilson, principal of Wilson Investment Properties, tells GlobeSt.com. “In addition, there is a high likelihood of a recessionary event within the next few years, and these high demand pressures should help insulate multi-tenant industrial from economic cycle factors more than other asset types.”The portfolio is the company's fifth industrial acquisition since last year. The purchase was made through a syndication of individual investors, pooling capital to purchase a large commercial portfolio with increased occupancy potential, attractive yields and immediate cash flow distributions.“These offerings allow our investors, many of whom are in the technology field, to diversify their investments outside of stocks and Wall Street,” said Wilson. “Many of our clients love that they can invest in an institutional-grade product for as little as $50,000 by utilizing the expertise of an experienced syndicator.”The portfolio is leased to a diversified set of tenants, including manufacturing, fabrication and many local service businesses. The properties fared well during Hurricane Harvey, and industrial assets have been in higher demand due to lower supply from damaged inventory and increased construction, as well as the growth of e-commerce.“We feel industrial assets are still early in their valuation market cycle, and being traded at a relative discount to their true value. This applies especially for class-B flex-industrial that we buy and sell,” Wilson tells GlobeSt.com. “New build class-A warehouse/distribution industrial often runs at $100-plus per square foot, whereas we are able to acquire existing inventory for much less.”Wilson Investment Properties has worked with individual investors in real estate syndications, including assisted living, industrial, office, retail, land development and multifamily since 2003.
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Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
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