2021 Net Lease Industrial Sales Volume & Cap Rates

Quarterly sales volume was down across all regions of the single-tenant industrial market in first quarter of the year.

Source: Stan Johnson Co. Research, Real Capital Analytics

Quarterly sales volume was down across all regions of the single-tenant industrial market in first quarter 2021, however, the data is a bit deceiving. Market activity greatly surpassed expectations in fourth quarter 2020 as investors rushed to close deals before year-end.

This resulted in a record-setting quarter, where more than $12.5 billion in sales were reported. As early 2021 closings were pushed ahead into the previous quarter, first quarter sales activity appears to have lost momentum with a 50 percent drop to $6.2 billion in sales. In actuality, investor demand for industrial product remains quite strong.

Subsets including cold storage, last mile distribution, outdoor industrial storage and others continue to be in high demand, as has been the trend over the past few years. Even as the market emerges from the pandemic, and consumers may depend slightly less on e-commerce in the near term, the outlook still points to a long-term reliance on industrial product, and investors will continue to be drawn to opportunities in this sector.

As expected, the last few quarters have seen compressed cap rates, even falling below the 6.0 percent mark for back-to-back quarters in mid-2020. Average rates have inched back up a few basis points and now sit at 6.0 percent, but they aren’t expected to see much volatility for the remainder of the year.

Focusing on business development, industry and client-specific research, and the analysis of local and national market trends, Lanie Beck has been the Director of Research for Stan Johnson Co. since 2013.

—Posted on Jun. 29, 2021

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