Chat with us, powered by LiveChat

Industrial Real Estate Sales Lead All Property Sectors

Industrial property sales outperformed other major commercial sectors across the country in the second quarter, driven by the popularity of online retailer Amazon and the migration of brick and mortar retailers to consumer-driven, e-commerce strategies.

While sales in all four sectors of the national and Philadelphia commercial real estate market — office, industrial, retail and multifamily — fell from the same quarter of 2017, industrial sales slid just 2 percent. That compares to sales falling 18 percent for retail, 17 percent for offices and 3 percent for multifamily, according to CoStar Group’s quarterly State of the Industrial Market webinar.

This report involving U.S. and Philadelphia commercial properties is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.

Industrial sales in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – are coming off a record year, contributing to the slight second-quarter drop as many larger industrial portfolios available for purchase already changed hands, CoStar analysts said. The good news is that prices for industrial properties are still climbing and investor appetite is voracious.

“The quantity of bidders has been surprising to us and to the listing brokers,” industry expert Marshall Loeb said in a conference call this past week. “You are getting well over a dozen to 20-something bidders. There is a lot of global capital chasing constructively leased industrial product.”

It is getting difficult to find value in some portions of the national and Philadelphia commercial real estate properties market, Loeb added, particularly outside the five largest segments. In markets such as Phoenix, Denver, Houston, Tampa, FL; and Charlotte, NC; yields have slipped to the upper 4 percent range.

Industrial rent growth outperformed office, retail and multifamily, according to CoStar analysts. Rents for distribution and warehouse space among U.S. and Philadelphia commercial real estate listings rose 5.9 percent from the second quarter of 2017. Rents for food processing, manufacturing, refrigeration/cold storage, showroom, truck terminal, and industrial service space came in even higher, at 6.5 percent. Rents for flexible industrial space that also includes some office space rose 4.7 percent.

Rents in three industrial segments of the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – increased more than their counterparts. Office rents were 1.8 percent higher, while retail rents rose 1.5 percent. Multifamily was up 3 percent in the quarter.

E-Commerce has been the best gift the industrial market could have asked for, CoStar industrial analysts said.

“As more and more shopping has been done online, that has been unequivocally positive for the industrial market, particularly the logistics sector,” said Shaw Lupton, senior managing consultant for CoStar.

Logistics construction is running on all cylinders throughout national and Philadelphia commercial real estate listings. About 210 million square feet of space has been delivered in the past four quarters. Demand has kept up with the supply. Vacancies in the sector are decreasing across the board even as new supply has poured in.

“Logistics has seen the most supply not only of any industrial subtype but indeed of any major commercial property sector,” Lupton said. “But demand has also been extremely strong — 2.1 percent demand growth in logistics in excess of supply.”

For more information about Philly office space, Philly retail space and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space, Philly retail space or Philly industrial space with the Philadelphia commercial properties that best meets their needs.

As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space, Philly retail space or Philly industrial space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.