Investors might be expecting a slowdown in the commercial real estate market this year. But that doesn’t mean that they don’t still view commercial assets as worth investing in.
The 2018 Altus Group Real Confidence Executive Survey found that investors consider commercial real estate a solid investment. The survey found, too, that real estate executives are especially bullish on industrial real estate.
Midwest Real Estate News recently spoke with Chuck DiRocco, director of research for Altus Group, about what makes industrial such an attractive CRE investment. DiRocco also spoke about how the Trump administration’s plans for infrastructure spending and immigration reform could impact the CRE market.
Here’s what DiRocco had to say.
Midwest Real Estate News: What is it about industrial that makes it such a favored investment type today? Chuck DiRocco: In our survey, industrial remains king for the second year in a row. Industrial continues to be the biggest driver in the industry. A lot of this is driven by ecommerce. The growth in ecommerce is fueling the industrial demand that we are seeing. We continue to see that happening for at least the next couple of years.
Unfortunately, ecommerce, while it helps industrial, is hurting the retail sector. We saw almost 7,000 major store closings in 2017. But since everyone is shifting a bit to the ecommerce side of things, we are seeing more demand for warehouses and fulfillment centers. The rise in ecommerce has created more pipelines across the board to fulfill all those online orders.
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