Current Events in the World of Industrial Property

Good News from Commercial Real Estate CMBS activity has flourished in the past few weeks with more than $6.5 billion in new securitization coming to market. In addition, Freddie Mac brought two multifamily-backed offerings totaling $1.86 billion to market. The activity in February alone is almost two-thirds of all CMBS deals offered last year – and for some is reminiscent of 2007 when commercial mortgage-backed securities offerings were at their peak, which has the commercial real estate market bullish and fretful at the same time.

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Great stats on Industrial Real Estate, only having 3.79% of CMBS in special servicing.

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The formal vote comes amid a gradual change by the giant pension fund after losing 42% of the value of its real estate portfolio during the recession. Marc Lifsher, Los Angeles Times February 15, 2011 Reporting from Sacramento — After losing 42% of the value of its extensive real estate portfolio during the recession, the state’s biggest public pension fund has approved a formal plan to pursue a less risky investment strategy. Board members of the $229-billion California Public Employees’ Retirement System endorsed a plan to shift away from residential properties, raw land and highly...

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After visiting Atlanta, Dallas, Chicago, and New Jersey over the past 5 weeks, we definitely agree with the below article. We have heard first hand that the overall industrial market should expect to see continued positive absorption in 2011. By Paul Bubny NEW YORK CITY-Absorption across the 34 industrial markets tracked by Cushman & Wakefield turned positive at the end of 2010, for the first time since the second quarter of 2008, the firm said Tuesday. Along with an uptick in leasing, a 74% year-over-year decline in new construction proved to be a boon in terms of industrial vacancies. “Positive...

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ING Lends $42Mln for 4 Industrial Properties Wednesday, 02 February 2011 ING USA Annuity Life and Insurance Co. has provided $42 million of financing for four industrial properties that were recently purchased for $91.8 million by Industrial Income Trust. The loan matures in 2040, but is expected to be repaid in 2020. It carries a rate of 4.81 percent and amortizes over a 30-year schedule. The four properties that serve as collateral are: - an 842,000-square-foot building in Hagerstown, Md., that is fully leased through 2016 to Home Depot, for which the REIT paid $41.2 million; -...

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This is a great article. We believe consumer spending and confidence will create jobs and lead us out of this economic downturn. Please read this great article by Don Lee at The Los Angeles Times January 29, 2011 The economy grew at a 3.2% annual rate in the last three months of 2010, driven by stronger consumer spending and trade, the Commerce Department reports. Economists expect the recovery to pick up momentum this year, though a shadow still looms over employment. Reporting from Washington — The American economy registered moderately stronger growth in the final three months...

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CoStar’s Positive Industrial Outlook Comes As Commerial Real Estate Market Learns of Possible Mega-Merger Between Two Largest Warehouse REITs By Randyl Drummer January 26, 2011 Warehouse leasing accelerated sharply in fourth-quarter 2010, helping to drive down vacancy rates amid record-low deliveries of new industrial commercial properties last year, according to CoStar’s Year-End 2010 Industrial Review and Outlook. “We saw good, stronger demand in the fourth quarter, given the historic low levels of warehouse supply,” said CoStar Senior Director of Research and Analytics...

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Port of Los Angeles sets a new high in exports, and the Long Beach port sees the biggest annual increase in cargo traffic. Experts believe the recovery will continue, though not at such a rapid pace. The nation’s busiest seaport complex had a record-breaking year in 2010 with a new high set in exports at the Los Angeles port and the biggest year-over-year increase in overall cargo traffic at Long Beach since the port began keeping such records in 1971, officials said. To read the entire article, please click here.

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This is great news for the Industrial sector.  We expect imports to rise during the next 5 years as The United States regains forward momentum. The Panama Canal project, scheduled to be completed in 2014, will increase the amount of containers headed to the eastern ports.  This increase in containers will subsequently increase demand for Industrial Real Estate. McClatchy-TribuneNovember 26, 2010|1:59 p.m. Georgia and South Carolina’s $500-million Jasper Ocean Terminal is being designed to handle 7 million cargo containers a year. Among U.S. seaports, only two — Los Angeles and Long...

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The industrial market is seeing signs of stabilizing rent and high demand in prime logistic locations. By Allen Kenney 11/5/2010 In the third quarter, the four major commercial real estate sectors all showed gains for the first time since 2007, according to the latest data from the CoStar Commercial Repeat-Sale Indices (CCRSI).Overall, CoStar’s indices pegged the increase in the pricing of “investment-grade” real estate from July to September at 5.5 percent, while the “general” property pricing increased 2.3 percent in the third quarter. CoStar differentiates the classes...

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