CHICAGO—In 2015, investors in the US industrial market completed several multi-billion-dollar mega deals. However, in 2016 the investment landscape underwent a change, and by the second quarter, many buyers had switched to the single asset strategy, according to a recent research report from JLL . As of mid-year, smaller trades are outpacing portfolio activity by three to one. “Last year was all about the national portfolio business, but that inventory has dwindled during the first six months of 2016, leading investors to act increasingly on a single asset basis,” says John Huguenard , JLL international director and head of the Americas industrial capital markets platform. “Single asset transactions are exceptional investments but require buyers to complete considerably more transactions to place the same amount of capital.” According to JLL's US Investment Outlook, just 26% of transactions year-to-date are from portfolio deals. The rest is single asset activity. And these small deals are getting smaller, down to the 200,000-square-foot mark and below for most second quarter trades. And unlike 2015, when foreign buyers were dominant, in 2016 more domestic institutional entities, including private equity and REITs, have poured capital into the industrial market. “Foreign capital is still active,” Huguenard adds. “With lingering global economic concerns, topped off last month by Brexit, international investors are still eager to place capital in the largely unflappable US industrial market. We simply need more portfolios of the scale and size during the back half of 2016 as we've had in the past to meet demand.” Most industrial buyers continue to seek out opportunities in gateway markets – from New Jersey and South Florida to Atlanta, Los Angeles and Dallas – as a hedge against volatility, he says. In these markets, buyers have seen cap rates compress another 50 bps this year along with modest rent and value growth. Some buyers remain active in high-growth secondary markets, but without the luxury of being able to exit at will. But in both cases, investors continue to seek out deals that drive up industrial pricing. And even though industrial investors have spent less on US properties this year than in 2015, the total volume so far still sits above long-term annual averages. According to Huguenard, the second half of this year could deliver a new collection of for-sale portfolios that, in his eyes, could flip the market again. One example: Global Logistics Properties , which is now under contract to purchase a 15 million-square-foot portfolio from Hillwood . In February 2015, GLP was part of a group that completed an $8.1-billion acquisition of the Blackstone Group's IndCor platform. The 63-property Hillwood portfolio features class A assets in markets across the country. “Owners are looking at the market and asking, 'Can fundamentals get even better or should I take my chips off of the table before it's too late?'” says Huguenard. “We could see more portfolios come to market, and likely get quickly snatched up. It wouldn't replicate 2015's transaction volume levels, but it would bring us back into the billion-dollar transaction size.” CHICAGO—In 2015, investors in the US industrial market completed several multi-billion-dollar mega deals. However, in 2016 the investment landscape underwent a change, and by the second quarter, many buyers had switched to the single asset strategy, according to a recent research report from JLL . As of mid-year, smaller trades are outpacing portfolio activity by three to one. “Last year was all about the national portfolio business, but that inventory has dwindled during the first six months of 2016, leading investors to act increasingly on a single asset basis,” says John Huguenard , JLL international director and head of the Americas industrial capital markets platform. “Single asset transactions are exceptional investments but require buyers to complete considerably more transactions to place the same amount of capital.” According to JLL's US Investment Outlook, just 26% of transactions year-to-date are from portfolio deals. The rest is single asset activity. And these small deals are getting smaller, down to the 200,000-square-foot mark and below for most second quarter trades. And unlike 2015, when foreign buyers were dominant, in 2016 more domestic institutional entities, including private equity and REITs, have poured capital into the industrial market. “Foreign capital is still active,” Huguenard adds. “With lingering global economic concerns, topped off last month by Brexit, international investors are still eager to place capital in the largely unflappable US industrial market. We simply need more portfolios of the scale and size during the back half of 2016 as we've had in the past to meet demand.” Most industrial buyers continue to seek out opportunities in gateway markets – from New Jersey and South Florida to Atlanta, Los Angeles and Dallas – as a hedge against volatility, he says. In these markets, buyers have seen cap rates compress another 50 bps this year along with modest rent and value growth. Some buyers remain active in high-growth secondary markets, but without the luxury of being able to exit at will. But in both cases, investors continue to seek out deals that drive up industrial pricing. And even though industrial investors have spent less on US properties this year than in 2015, the total volume so far still sits above long-term annual averages. According to Huguenard, the second half of this year could deliver a new collection of for-sale portfolios that, in his eyes, could flip the market again. One example: Global Logistics Properties , which is now under contract to purchase a 15 million-square-foot portfolio from Hillwood . In February 2015, GLP was part of a group that completed an $8.1-billion acquisition of the Blackstone Group's IndCor platform. The 63-property Hillwood portfolio features class A assets in markets across the country. “Owners are looking at the market and asking, 'Can fundamentals get even better or should I take my chips off of the table before it's too late?'” says Huguenard. “We could see more portfolios come to market, and likely get quickly snatched up. It wouldn't replicate 2015's transaction volume levels, but it would bring us back into the billion-dollar transaction size.”