Big box distribution facilities are incredibly attractive—they can easily be repurposed if the tenant vacates. That is according to Jim Gibson. GlobeSt.com recently chatted with the regional director of Stan Johnson Co. about the net lease industrial market.
GlobeSt.com: What advice are you giving your clients about timing the industrial market?
Jim Gibson: The net lease industrial market is still very robust. I can't broad-brush the advice we're giving our clients, but demand for industrial properties is very strong right now. We're also pleasantly surprised with how 10-year treasuries are tracking.
GlobeSt.com: What are you seeing in terms of cap rate movement for single-tenant industrial product?
Gibson: In retail, there's been some upward movement in cap rates, but in the industrial sector, “stable” seems to be the word. We don't anticipate any significant movement in the near term.
GlobeSt.com: If you're selling, should you do it now, or wait six months?
Gibson: While cap rates might adjust a little bit in the next few months, we don't foresee much change. We're tracking political and economic influences daily, plus possible changes in 1031 exchange guidelines – but we don't hear any alarms yet, and interest rates look more stable today than they did at the beginning of the year. If investors are considering selling their net lease industrial asset, there's no harm testing the waters now.
GlobeSt.com: What are the most attractive industrial investments?
Gibson: Big box distribution facilities are incredibly attractive – they can easily be repurposed if the tenant vacates. Today's hot investments markets are tax-free states in the South, but value is dictated more by the real estate itself, and the lease that's in place, than the geographic market.
Big box distribution facilities are incredibly attractive—they can easily be repurposed if the tenant vacates. That is according to Jim Gibson. GlobeSt.com recently chatted with the regional director of Stan Johnson Co. about the net lease industrial market.
GlobeSt.com: What advice are you giving your clients about timing the industrial market?
Jim Gibson: The net lease industrial market is still very robust. I can't broad-brush the advice we're giving our clients, but demand for industrial properties is very strong right now. We're also pleasantly surprised with how 10-year treasuries are tracking.
GlobeSt.com: What are you seeing in terms of cap rate movement for single-tenant industrial product?
Gibson: In retail, there's been some upward movement in cap rates, but in the industrial sector, “stable” seems to be the word. We don't anticipate any significant movement in the near term.
GlobeSt.com: If you're selling, should you do it now, or wait six months?
Gibson: While cap rates might adjust a little bit in the next few months, we don't foresee much change. We're tracking political and economic influences daily, plus possible changes in 1031 exchange guidelines – but we don't hear any alarms yet, and interest rates look more stable today than they did at the beginning of the year. If investors are considering selling their net lease industrial asset, there's no harm testing the waters now.
GlobeSt.com: What are the most attractive industrial investments?
Gibson: Big box distribution facilities are incredibly attractive – they can easily be repurposed if the tenant vacates. Today's hot investments markets are tax-free states in the South, but value is dictated more by the real estate itself, and the lease that's in place, than the geographic market.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
