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Five Factors Driving U.S. Industrial Real Estate Market's Resurgence

Stocks in this article: JLL

CHICAGO, July 23, 2012 /PRNewswire/ -- The recent entry to the North American logistics and industrial property market by Australian commercial real estate investor and developer, Goodman Group, is the latest news to underscore the resiliency and opportunities in U.S. industrial property market, according to the Industrial and Logistics group at Jones Lang LaSalle.

Goodman Group expects to invest $1.5 billion in the sector across North America, mainly in new developments, through an exclusive agreement with Irvine-based Birtcher Development. Jones Lang LaSalle, which acted as strategic advisor on the Goodman-Birtcher agreement, views the influx of foreign capital to the U.S. industrial market as one of the key trends driving the resurgence of the sector.  "Jones Lang LaSalle has done an excellent job in collaborating with us to help create our national land strategy.  The firm's senior and regional management have assisted our efforts to secure and underwrite prime development sites in our targeted markets," said Brandon Birtcher, CEO of North America for Goodman Birtcher.

Low U.S. interest rates, positive economic indicators and an increasing demand for prime, well-located logistics property are some of the other elements bringing focus to U.S. industrial assets such as warehouses and distribution centers, according to Tim O'Rourke, Executive Vice President at Jones Lang LaSalle.

Other factors such as the revival of the U.S. manufacturing sector, the trend toward on-shoring manufacturing back to the U.S., and the demand for big box distribution space by the thriving e-commerce sector, are driving developers and investors toward U.S. industrial real estate, according to Rich Thompson, Managing Director of Jones Lang LaSalle's Supply Chain & Logistics Solutions consulting practice.

"Compared with other product types, industrial properties are less capital intensive, have not historically experienced the highs and lows in rental rates and values, and remain a stable and predictable asset class," said Mike Fowler, Executive Vice President at Jones Lang LaSalle. "The evolution of global economics and the global supply chain are transforming the U.S. industrial real estate landscape, and attracting the attention of some major global players."

The top five themes driving the industrial real estate resurgence:

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