Industrial Market Finally Hitting a Plateau?

Michael Marconi, principal and managing broker for Transwestern, points out that rent growth hasn’t really increased since mid-2015.

CHICAGO—The Chicago area industrial market is in the midst of perhaps the most sustained boom in its history. Buoyed by the post-recession economy, as well as the extra boost in demand caused by e-commerce, the region has experienced years of positive absorption without any setbacks.

Not surprisingly, investors of all kinds have decided to park their capital in and around the city, buying up not just the sparkling new distribution facilities, but also well-located older product that still attracts high-credit tenants. However, a few trends have emerged that may cause some investors to shy away, and perhaps head to secondary or tertiary markets in search of higher yields.