Focus on Industrial Sector Intensifies and Shifts in Direction

NEW YORK CITY-For the last couple of years, industrial space here meant a trendily decorated dot-com office. Classic industrial tenants were pushed into the outer boroughs and New Jersey. Now, one heavy hitter in particular is expressing a renewed look at industrial services and retrofitting space to meet updated industrial needs.

Steve Sakwa, directing Merrill Lynch’s current research and forecasting efforts on REITs, warns against investing within “the industrial sector, [in those] companies that have relatively low levels of pre-leasing.” He noted, “With the economy slowing and rent growth moderating in many markets, we believe that significant cost overruns will no longer be compensated with higher than expected rents, which would lead to lower than expected development returns.”

Despite this, Cushman & Wakefield says it’s planning to focus renewed energy on the industrial sector. In its efforts, New York-based C&W has named a new senior managing director of industrial services, Pamela Zoellner. The firm’s North American president Bruce Mosler announced, “Industrial, as well as retail and technology, is a main focus point for our firm in 2001 and beyond.”