Cushman & Wakefield's John Morris Moderates I.CON Panel
Presentation was part of two-day Conference presented by NAIOP and SIOR.
- Bergen-Passaic, NJ (1888PressRelease) June 17, 2014 - With the economy improving and industrial real estate leading the commercial real estate rebound, investment trends were the subject of a panel titled "Counter Trends: When Opposite Investment Tactics Attract." John Morris, the Chicago-based head of industrial, Americas for Cushman & Wakefield, moderated the discussion at I.CON: The Industrial Conference 2014. The two-day event at the Hyatt Regency Jersey City was presented by NAIOP, the Commercial Real Estate Development Association, and SIOR, and hosted by the New Jersey Chapter of NAIOP.
"Major developers and companies like Amazon and Walmart have tended to dominate the real estate landscape in many communities," said Morris. "While these large-scale investments have been crucial to the industry's growth, so have the smaller, niche investments that don't often get as much attention.
"Our panel will highlight these investments, addressing some of the key issues and factors that set them apart but still make them appeal as sound investment strategies," said Morris.
"What are investors attracted to and what are their strategies?" he asked.
"Flex and bulk industrial is what people think of in terms of investments, and they are finding risk-adjusted returns from the acquisition, development and operation of high-quality light industrial attractive," said Lewis Friedland, managing partner of Cobalt Capital Partners. "Our company, and others, are taking a value-add approach."
"What's driving demand?" Morris asked.
"It's being driven by retail, post-recession," said Friedland. "In general, distributors want in-fill locations, as close to the center of their market as possible."
"There are benefits of being tied to a specific industry," said Jeff Miller, vice president-industrial for Oxford Properties Group, noting specifically his company's properties in the Edmonton, Alberta market. There, energy is the driver.
Miller also concurred with the analysis that while "the large deals are grabbing the headlines, the smaller deals that don't make the headlines are important drivers of our company's strategy."
"How does industrial stack up as an investment class vs. other types of commercial real estate," Morris asked.
"It is a preferred asset class, with incredible fundamentals both here in New Jersey and across the country," responded Kevin Welsh, senior vice president, investment properties, for CBRE. "There is much development going on, and a number of large deals, as has been mentioned, and that should continue. The rent growth is impressive.
"The amount of institutional capital in the market is amazing," Welsh said. "Everybody is trying to find yield. There is an insatiable demand for industrial real estate, mostly Class B product, with capital moving into that space in a big way."
Where does the economy stand in terms of recovery? Friedland estimated that it is "early in recovery." Morris positioned it "somewhere in the middle, as the demand for industrial real estate indicates and grows," he concluded.
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