Greater than the sum of its parts: Homogenize industrial real estate portfolios to maximize returns
Industrial is the preferred property type of many commercial real estate investors today, and with good reason: Bulk distribution warehouse, manufacturing and logistics assets can offer predictable yields, solid fundamentals to support rent growth, limited exposure to capital expenditures, and strong prospects for value appreciation as e-commerce growth drives user demand.
Gaining exposure to these types of assets in scale can be difficult, however, given a fragmented market with lower-priced assets. According to Real Capital Analytics data, approximately 70 percent of industrial asset sales take place on a one-off basis, creating a fundamental mismatch between many of the market offerings and the volume of capital seeking to be placed in the sector.
This dynamic provides an opportunity for investors with properly positioned portfolios. An industrial aggregation strategy can allow investors to achieve premium pricing on industrial portfolio sales by catering to the mar