Last-mile industrial real estate has become highly valued by retailers eager to service customers with quick deliveries, driving increasing demand for these properties. Third-quarter vacancy rates fell to 4.3%, according to JLL. "Space in our markets is effectively sold out," Prologis CFO Thomas Olinger said in an earnings call last month.
REITs as well as private equity firms have been steadily snapping up self-storage properties, driving up valuations compared to a few years ago, with activity driven by the segment's strong performance during the pandemic. "The investment landscape has been changed quite dramatically due to the performance of the industry over the past 18 months," said Isaac Hiatt of Yardi Matrix.
The value of non-irrigated cropland increased in the third quarter, according to the Federal Reserve Survey of Agricultural Credit Conditions. Some areas have seen annual increases of more than 20%, and the outlook for agricultural land values is strong through the end of this year.
REITs fell last week as concerns about the new omicron variant of COVID-19 weighed on all equity markets. The FTSE Nareit All Equity REITs Index was down 1.3% for the week, a bit more modest decline than the 2.3% drop in the Russell 1000.
Blackstone Real Estate Income Trust has acquired 102 US logistics properties from Cabot Properties, and Blackstone's European Core+ business acquired 22 European assets from the same seller. The combined value of the transactions is $2.8 billion.
Some businesses in New York City are opting to own the offices they occupy instead of renting, inspired by the current pricing in the market. This trend can be seen in Google's decision to purchase the St. John's Terminal building in Hudson Square earlier this year and numerous examples of businesses buying smaller buildings.
Simon Property Group's King of Prussia Mall is well-positioned this holiday season and has added 40 new tenants totaling 100,000 square feet this year, with more expected next year. "Traffic has returned but sales have far exceeded 2019," said Bob Hart, general manager of the property.
Now that CBL & Associates has emerged from bankruptcy, it is in a stronger financial position to pursue strategic initiatives at its malls, which include Oak Park Mall in the Kansas City area, says Stacey Keating, CBL's vice president of corporate communications. "We're at a really exciting time in the industry and for the company," Keating says. "We've seen traffic and sales rebound considerably since the pandemic."
Warehouse demand is staying strong as retailers look to meet consumers' appetite for e-commerce, and JLL estimates that 1 billion more feet of industrial space could be needed by 2025. "The industry is effectively sold out through the next year," said Chris Caton, Prologis' managing director of global strategy and analytics.
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