Industrial Property in 2021 and beyond?

[Logan Hartle]

I own a 30k sqft industrial building in Wheeling WV and am looking to expand that portfolio in 2021 in Charlotte. 

My questions for those of you who have bought or are buying industrial property are:

1. where are you buying

2. what is your outlook for the industrial market in 2021-22?

[Andrew Tripp]

We're actively looking in some select Chicago submarkets (O'Hare/Northwest Suburbs/I-290 corridor).  Small bay stuff, 10K to 50K.  Up to about $5,000,000 in value.  Above that size/value profile, very hard for more entrepreneurial outfits like ours to compete with institutional-level money.  We look for both stabilized, cash flowing assets and value-add repositionings.  We like multi-tenant better than single-tenant, but we will look at both types.  We'll do business with just about any kind of tenant, but we like advanced manufacturing, construction companies, air freight and flex R&D.  Basically the suppliers to the suppliers, and maybe another step down from that. We're looking at taking a similar approach in a few other markets.  Dallas, Kansas City and Indianapolis, possibly.  

I don't see any way industrial slows down in the 2021 short of some sort of major banking-related meltdown that hits everyone.  Of the four major real estate food groups, it probably has the clearest horizon this year.  Multifamily is still probably the best bang for the buck in terms of risk in the long term, but the eviction moratorium complicate things a little in the short term.  Some changes coming to office and retail that aren't entirely clear yet, and are not likely to get sorted out in 2021.  

If anything, the industrial market may overheat a bit in 2021.  Once the pressure eases on the rest of commercial real estate, it should normalize a bit in 2022 I think.