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Industrial Investment Outlook for 2020: Steady, with Potential Headwinds
U.S. industrial investment is forecast to continue at a steady pace into 2020, though potential headwinds from tariffs and a slowing economy could have an impact, according to an RCM-SIOR Industrial Investor Sentiment Report.
Investors, however, are shifting strategies to find safe havens against potential market slowdowns; strategies include adjusting portfolios toward land-constrained markets.
“As we look ahead and evaluate a softening in the market, we can still expect strong demand to continue for the foreseeable future,” said outgoing SIOR President Robert G. Thornburgh, CCIM, with Kidder Mathews. “Further down the road, the corresponding rise in values, construction, labor and talks of a recession – while not new topics – could clearly develop into sizeable headwinds.”
Other takeaways were that e-commerce continues driving sector growth, while pricing is anticipated to increase by 5% or more in the next 12-18 months. Furthermore, nearly 32% of participants expect continued cap rate compression.
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