Foreign Investment in CRE: A 2020 Look
Foreign Investment in CRE: A 2020 Look
From a global perspective, no industry has been as popular with foreign investors as the US property market. The domestic residential housing arena has been attracting investors for years now, but these gains have got nothing on the commercial side of the business. In fact, some of CRE’s biggest deals have been from foreign investment.
It’s no secret that foreign investment plays a major role within contemporary CRE. Commercial real estate has been catching the eyes of investors all over the world and it’s caused a great boom in the industry in the past few years.
This spark in investor interest has spurred an explosion of popularity for the different commercial sectors – and industrial spaces seem to be the ‘golden child’ of investment opportunities.
Industrial is in Hot Demand — Here’s Why
The need for industrial spaces in the contemporary business module is undeniable. As the world takes leaps and bounds towards cutting-edge digital innovations, web-based marketplaces, and short-term delivery demands; warehouses are the ones carrying this heaviest load. Industrial has a big responsibility in supporting the growth and expansion of tomorrow’s e-commerce culture – and it’s only up from here.
At this point, no one is expecting e-commerce to start slowing down. All of the experts are anticipating the opposite outcome, where the online shopping revolution will continue pushing the boundaries and unceasingly depend on warehousing to make it all happen.
Data shows that 65% of retailers are already promising same-day deliveries as we’re making headway into 2020. The instant-ship concept is becoming the new norm for both brands and consumers. Today’s shoppers are serious about their shipping deadlines and view delivery delays as being borderline unacceptable. So, any company looking to stay afloat amidst these changes needs to collaborate with winning industrial support.
The current outlook is getting even more intense. In response to a recent poll conducted by Afflink, 61% of consumers expressed they want their e-commerce goods to be shipped within 3 hours of making the online order. Besides flooding business into the domestic warehousing arena, the long-lasting promise of abundant business is funneling investors towards CRE’s industrial sector.
The data doesn’t lie. Savvy investors from all over the world are looking at these trends and jumping at the promising opportunities that US industrial real estate has to offer.
With all of the foreign interest zeroing in on the industrial market, it’s become one of the most sought after investment types. In fact, warehousing and industrial were the top-performing CRE sectors at the onset of 2020.
Commercial Real Estate Assets are Set to Weather Any Storm
The evolving economic outlook has driven even more investors to CRE. Global investors are hitting the US markets to beef up their portfolios with top-tier commercial assets.
In addition to being highly profitable, commercial real estate investments are reportedly the most secure investments available today. Compared to other investment outlets, economists and business experts stress the benefits of investing in commercial real estate… more specifically, the industrial market.
Expanding Opportunities within the Industrial Scene
Industrial and warehouse developments were named the 3rd strongest risk-management trends for safeguarding CRE investment portfolios into 2020 and beyond. The experts note that investors should pay special attention to the industrial market’s offshoots such as transportation, delivery, and changing infrastructure needs.
And, 2020’s investor focus isn’t just on the country’s biggest metros. Keep an eye out for secondary and tertiary market opportunities, too.
According to the report, the combination of warehouse developments and public transportation will be a superpower in establishing new hubs for commerce around the country. Investors interested in gaining the upper hand and paving the way for success will be hunting for industrial projects popping up in smaller cities.
Industrial Investment Trends to Watch
If you’re looking to stay up to speed with the upcoming shifts in industrial’s foreign investment, keep these 2 trends on your must-watch list.
Upgrading Existing Properties
Warehouse rehab will be the next big thing for investors in 2020. Since they don’t require entirely new development and construction process, industrial properties that are in dire need of an upgrade will be a major source of business.
Tech integrations will be a concern when enhancing outdated properties. Smart Technology tools, IoT, and 5G will be primary contributors to bringing older properties into the future.
Multistory Warehousing: Coming to a City Near You
While the multistory warehousing module has been alive and well for years now in China and South Korea, it’s still a relatively new concept for the United States. But, foreign investors are set to play a strong role in expanding this industrial strategy onto US soil.
Whether it’s square footage limitations or making the most of a highly saturated market, multistory warehousing can help solve many of the issues facing the industry today.
Foreign investment is transforming the commercial real estate industry in more ways than one. Keep up with all the latest in the biz with VivaCRE.