The recent heady performance of industrial property is not a bubble, according to a report released in April by ScanlanKemperBard Companies. The underlying fundamentals are strong, the outlook is encouraging, and total returns likely will continue rising, said the report, researched by Zisler Capital Associates.
Why will manufacturing and R&D properties prosper? Employment growth is strong, and this strength is correlated with increasing excess demand for manufacturing labor and manufacturing space. The growth rate of total industrial demand for industrial space currently outstrips the growth of inventory. Consequently, rents and values continue to strengthen. The pricing pressure on all types of industrial space, real estate will benefit net operating income and prices of urban industrial real estate. Total returns are rising accordingly, according to the report.
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