There is no doubt that the COVID-19 pandemic has shaken the global, national, and regional commercial real estate market. Yet even at the peak of the pandemic shutdown, one segment of the market has remained strong and dependable: industrial.
Despite the fact that industrial investment sales volume in 2020 has dropped compared to the year prior, the market was in a fundamentally better place than it was in previous downturns, giving the industrial sector the foundation it needed to survive and thrive.
As a result, industrial investment properties remain among the strongest asset classes for commercial real estate investors in Northeast Ohio. Slowdowns in investment sales activity that were observed during Q2 of 2020 have begun to recover in Q3, and are not expected to leave a lasting impact on the market as we move into Q4 and beyond.
Industrial Investment Sales: Q3 2020 Data
Nationally, net asking rents on industrial properties are on the rise. Rental rates for warehouse and distribution center properties are at all-time highs. Prices on industrial assets are on the rise too, more so than any other commercial real estate sector.
Ecommerce is certainly one of the key drivers of this trend, as consumers have shifted from shopping at malls and retail centers to online shopping. Where COVID-19 social distancing regulations and behavioral changes have hit the retail segment hard, ecommerce acceleration is causing a strong demand in the industrial market.
Locally, the industrial market vacancy rate dipped to 3.8% in Q3 and is projected to hold steady or further decrease in the fourth quarter of 2020, based on the projected pipeline of activity. Construction completions totaled 445,139 sf; this figure was led by the completion of an Amazon last mile facility in Bedford Heights (145,235-sf) and the Scannell Spec building (179,604-sf) in Strongsville that was 40% pre-leased to Wayfair.
There were 55 industrial user sales totaling 1.4 msf and 25 industrial investment sales totaling 2.2 MSF in Q3 2020. Among the most notable industrial investment sales was the acquisition of three assets around the Cleveland Airport totaling 281,000 sf for $18.9 million by Weston, Inc. Additionally, a large 11-building 1.1 msf portfolio of Class A and B properties primarily in the Southeast and Southwest changed hands during the last quarter.
Northeast Ohio Investment Property: 6680 Parkland Boulevard
Now is a smart time to take advantage of this surge in industrial investment sales activity. Cushman & Wakefield | CRESCO is representing a high-quality investment property at 6680 Parkland Boulevard, Solon, OH 44139.
Located off I-422 with easy access to I-271 & I-480, this industrial investment property is less than twenty minutes from Downtown Cleveland. It offers excellent visibility in a highly recognized and tenanted industrial and commercial trade area, and can accommodate single or multi-tenant users. Extensive leasehold and capital improvements were completed in 2019.
The industrial sector has remained one of the most active, top-performing commercial real estate asset classes, even as our nation battles an ongoing pandemic.
Interested in purchasing an industrial investment property? Contact Cushman & Wakefield | CRESCO Real Estate for more information.
To learn more about how CRESCO, Greater Cleveland’s leading commercial real estate company, can help you with your property needs, contact us at 216.520.1200, or fill out the form below. A CRESCO professional will contact you shortly.