CHICAGO—Investors continue to have a big appetite for class A industrial product and that has the sector on pace to see its second-largest year since 2008 in terms of volume, according to JLL's third quarter investment report.

By the end of the quarter, the US market had seen $31.1 billion in 2016 investment sales, a 28.9% drop from the historic year of 2015, during which a number of mega-portfolios worth billions traded hands. Smaller portfolios sales, many below $150 million and focused on a single market, have helped drive the investment market this year. And cap rates sank to just 5.0% by the end of the third quarter, a year-over-year drop of 19 bps.

“The industrial sector has become far more attractive to the institutional investor,” Craig Meyer, president, industrial brokerage and industrial capital markets, Americas, tells GlobeSt.com. “They view it as a safe haven.” And given its performance throughout much of the US, investors have widened their scopes to include many secondary markets, such as Phoenix and Indianapolis, in addition to core regions like Chicago, New Jersey and the Inland Empire. For instance, Phoenix led the way in total space traded in the third quarter as volume reached four million square feet.