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Industrial Sales at Lowest Level in Nearly Four Years

US industrial real estate investment has plummeted over the past several months.

By John McCloud | Updated on February 22, 2008

US industrial real estate investment has plummeted over the past several months. According to statistics from Real Capital Analytics, volume for November through January was off 42% from the same period 12 months earlier, while the $1.6 billion of sales recorded for January was the lowest figure since May 2004.

“Industrial has held up relatively well considering everything that’s going on in the credit markets, but there’s no question there’s been a slowdown in the past 60 days,” says Real Capital managing director Dan Fasulo. “The story is worse for other property types, but industrial has also taken a hit.”

Estimating that CMBS financing accounted for 25% to 30% of sales last year, Fasulo attributes the recent falloff to the collapse of the that market. “Industrial portfolio sales have really driven the marketplace over the last couple years,” he notes, “Many of these were financed by the CMBS marketplace, which for all intents and purposes no longer exists. In fact, there wasn’t a single CMBS issue in January. We’re going to need the CMBS marketkplace to come back for investment to come back.”

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