“Logistics will continue to evolve, driven by changing consumer demands and e-commerce growth,” Fraker says. “This will result in greater demand for last-mile facilities and perhaps less-functional urban infill locations as redevelopment opportunities. Other opportunities in this sector include speculative development and acquisitions in select markets, especially multi-tenant warehouse and infill light industrial, as opposed to large-scale portfolio acquisitions.”

With a total of $1.4 billion in non-entity sales, Greater Los Angeles has attracted the most foreign capital to its industrial/logistics sector over the past seven years, says CBRE. Other markets that have seen significant foreign investment during the period include the Bay Area, Seattle and Phoenix. Each of these markets benefits from strong demographics and well-established logistics hubs.

“Many foreign institutional investors view the US as a safe country for investment, with opportunities to scale quickly and establish strong logistics platforms poised for growth,” says Fraker. “Investors from Asia have been motivated to limit their exposure to economic volatility throughout their region, as well as higher valuations and lower yields relative to US industrial assets.” He notes that Koreans have taken this route, “as well as smaller European investors.”

LOS ANGELES–Cross-border investment in US industrial real estate has increased by an average of 67% annually since 2010, says CBRE. Nearly half the $61 billion spent by foreign investors on industrial properties during that time has come from the Asia Pacific region, with notable examples including GLP and Mitsubishi Real Estate.

As cross-border investing has gone up in absolute terms over the past seven years, so has its share of the total industrial investment pie. Year to date, it stands at 14.5%, excluding large-entity deals, compared to 1.9% for all of '10.

“Investor perceptions of industrial assets have changed considerably,” says Jack Fraker, managing director, global industrial & logistics, capital markets for CBRE. “Over the past decade, industrial real estate has evolved into an attractive property sector, with logistics facilities becoming more sophisticated and market fundamentals strengthening due to new consumer buying preferences.” CBRE's recent 2017 Americas Investor Intentions Survey found that more than one-third of investors consider logistics the most attractive asset class, compared to 28% for multifamily.

The rise of e-commerce has had a lot to do with this. CBRE estimates that for every $1 billion in online sales, there's 1.25 million square feet of net absorption in the logistics and industrial sector. Although growth has slowed lately, CBRE notes that industrial rental rates are near record levels, and competition remains strong among institutional buyers for industrial properties.

“Logistics will continue to evolve, driven by changing consumer demands and e-commerce growth,” Fraker says. “This will result in greater demand for last-mile facilities and perhaps less-functional urban infill locations as redevelopment opportunities. Other opportunities in this sector include speculative development and acquisitions in select markets, especially multi-tenant warehouse and infill light industrial, as opposed to large-scale portfolio acquisitions.”

With a total of $1.4 billion in non-entity sales, Greater Los Angeles has attracted the most foreign capital to its industrial/logistics sector over the past seven years, says CBRE. Other markets that have seen significant foreign investment during the period include the Bay Area, Seattle and Phoenix. Each of these markets benefits from strong demographics and well-established logistics hubs.

“Many foreign institutional investors view the US as a safe country for investment, with opportunities to scale quickly and establish strong logistics platforms poised for growth,” says Fraker. “Investors from Asia have been motivated to limit their exposure to economic volatility throughout their region, as well as higher valuations and lower yields relative to US industrial assets.” He notes that Koreans have taken this route, “as well as smaller European investors.”