5 Reasons Industrial Real Estate is Going to Be Hot in 2019

5 Reasons Industrial Real Estate is Going to Be Hot in 2019

According to the 2019 Commercial Real Estate Outlook’s survey of 500 global investors, industrial, along with other “nontraditional REITs,” is the only asset not trading at a discount of its net value. That is despite growing global uncertainty due to U.S. tariffs and Britain’s exit from the Euro.

Globally, commercial real estate volume went up in the first part of this year by 13% (in the U.S. 9%). Forecasters expect this trend to continue with the vast majority of global investors (97%) plan to increase investments in commercial real estate. Here are 4 reasons why we expect industrial to remain hot in 2019.

#1: Investors Plan to Diversify in 2019

The survey found that the majority of executives around the globe are looking to diversify their portfolios this year. That’s good news for industrial. Whether diversifying to add more retail space, more warehouse space, or more office space, industrial is right there in the mix. Wherever CEOs plan to invest, in order to diversify their portfolios, they will likely add at least some industrial space to their holdings.

#2: Investors Prioritize Flexibility and Agility for 2019

Flexibility and agility have been the buzzwords for the second decade of the 21st century. Technology is changing so rapidly, causing businesses to change, and therefore office design to change, that the smartest investment properties are those that can adapt to massive and constant change.

“Industrial is high on the list for investors and businesses looking for flexible space to be converted into mixed-use or filled out for minimum investment to serve as a retail supply chain warehouse. Few investors are looking for traditional commercial real estate save industrial for atypical industrial purposes,” says XXX.

#3: Data Centers will be Hot Investments in 2019

Non-traditional assets that are expected to see increased investments in 2019 include data centers. With all of the technology necessary for daily life to function in 2019, all of that data is tethered to a data center somewhere. As technology increases, so is the need for more data centers and 2019 will see industrial properties sopping up a lot of those investment dollars.

#4: Repurposed Buildings will Attract New Investors in 2019

Industrial has been the target for developers looking to repurpose existing assets for years now. Forecasters expect that continue in 2019. In fact, investment in repurposing existing buildings is the priority for many globally – particularly adapting buildings for new Smart and green technology.

#5: Location will Make Industrial Attractive Assets in 2019

A lot of industrial is located in the outskirts of town. Traditionally that has been a downside for retail investors or office park investors. Expect that to change in 2019 with more developers seeking to build small communities based around a data center or distribution center. Industrial investors will be actively seeking new industrial over the next year.