Nearly 700 Colliers professionals and clients attended the National Industrial Conference in Scottsdale on September 27-28. Here are 10 takeaways and observations surrounding capital markets:
Values always recover. NCREIF data shows that, while it may take some time, industrial values always regain previous cyclical highs.
Increases in borrowing costs have caused deals to fall through. This trend is very recent and presents opportunistic buying prospects.
Forecasting rent growth is more critical than ever. Investors will pick up on differences by location and asset size.
Negative leverage can still make sense, but more on a one-off basis rather than at a portfolio level. Two years is the sweet spot, but it can go as long as four for the right deal.
Development will likely remain restrained, with groundbreaking down nearly 90% in some markets. Those with land banks will look at potential starts in the near term.
Build-to-suit RFPs are picking up, particularly in the solar, EV, and energy spaces, feeding the supply chain and supporting additional demand.
Nearshoring/onshoring is real. Mexico is seeing the biggest pop with strong rent growth and low vacancies.
IRA and CHIPS acts will be catalysts for growth and investment. Arizona has benefitted from numerous $1 billion+ project announcements.
Permanent movement in port volumes suggests capital allocation should follow and persist.
Distress was not a theme, echoing the data on CMBS delinquencies. Compared to other asset classes, industrial feels well positioned.