(To read more on the industrial market, click here.)
LONG BEACH, CA-"Strong and steady" was the mantra for industrial sector insiders at the RealShare Industrial West conference, held yesterday at the Hyatt. However, while industrial product remains an industry darling, it's not without its hiccups.
Besides being "strong and steady" panelists and attendees agreed that the shrinking industrial base, combined with a low amount of deals being completed, means that there can be a high degree of risk. Many in attendance wondered whether some industrial risk takers were betting the farm to save the cow.
"People are taking risks," said Jason Choulochas, regional director for Wrightwood Capital and participant in the Investment Sales panel. "Incrementally, though, are you really getting paid for that risk? With construction costs and land appreciation, we've got great rent growth, but is that good enough to compensate for those two factors? Industrial is looking almost as tight as apartments, so I wonder if the risk-return imbalance is really in the right place."
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