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Today's Market Favoring Core Industrial Space

DALLAS-More institutional investors are viewing industrial as a safe haven for stable returns in unstable times. The pipeline aptly shows the hunger more so than Q1's deals.

By Connie Gore | Updated on April 04, 2008

[IMGCAP(1)]DALLAS-With $80 billion of pension funds to deploy this year, institutional investors increasingly are gravitating toward core industrial real estate as properties of choice, seeing it as stable product in unstable times. The attraction is an 8% to 10% annual return that unfalteringly compounds over the long term.

“There’s a huge pent-up demand because industrial real estate matches up so well from an actuarial standpoint,” says Jack Fraker, vice chairman of CB Richard Ellis’ top-ranked investment sales group. “That return and the compounded effect is what chief investment officers are looking for.”

According to CBRE’s first quarter analysis, the average per sf price in Dallas/Fort Worth rose slightly despite a slight slowdown on the Q1 closing front. The region is averaging $67 per sf or $6 per sf below the national average.”The first quarter was incredibly slow. Everyone’s adjusting to what’s going on,” acknowledges Cary Krier, senior vice president of industrial sales for Jones Lang LaSalle in Dallas. “But, industrial certainly is a preferred asset type. Lots of people don’t think there’s as much risk associated with industrial.”

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