Matthew Berres

Industrial has been called the darling of the commercial real estate sector as a whole. Now, has become the top target for triple-net lease investors as well. The expansion of the ecommerce market has created strong demand for big box and single-tenant triple-net industrial facilities. The asset class has quickly become the most coveted in the niche market.

“It seems a distant past that for most net lease investors the acquisition appetite for industrial was quite low,” Matt Berres, executive managing director at Newmark Knight Frank, tells GlobeSt.com. “Now given robust e commerce activity along with significant big box industrial development to satisfy the demand, industrial is the darling of the net lease sector.”

While the strong demand in the sector has certainly stimulated investor appetite, buyers are also attracted to the long runway and stability of the market. This is particularly true for warehouse, distribution and third-party logistics facilities. “Most research experts point out that it's the only asset class where you can still experience long term rent growth opportunity during an investor's hold period and lenders are underwriting very favorable terms in order for investors to acquire at aggressive cap rates in gateway markets,” adds Berres. “Federal Express warehouse buildings for example continue to remain very high on investors' radars.”