Spurred on by new allocations for investment, the pipeline of industrial sales in the United States is expected to grow by as much as 20 percent in 2013, according to experts with Jones Lang LaSalle's Industrial Capital Markets team. It's growth that will come on the heels of what is expected to be a strong year-end push in transaction velocity in 2012. According to data from Real Capital Analytics, year-to-date 2012 industrial investment transactions are down approximately 20 percent compared with the same period in 2011.
However, a significant number of very large transactions are slated to close in the fourth quarter, which will close the gap to end the year with volume that's roughly equivalent to 2011's $35.3 billion in sales.
"Very little product will come to the market between now and year-end, as election uncertainty pushes sellers to delay launching new sales until 2013," said John Huguenard, international director and leader of the firm's Industrial Capital Markets team. "With improving industrial fundamentals and the election behind us, we expect a very strong 2013, with a great deal of activity in the first quarter, particularly."
Jones Lang LaSalle'sIndustrial Capital Markets team is on track to close on more than 30 million square feet of transactions by the end of 2012. The team has completed more than 18 million square feet in sales as of October 1, with another 14 million square feet either under contract or being actively marketed.
International Director John Huguenard, Managing Director Mike Hochanadel, Executive Vice President Peter Harwood, and Vice President Sean Devaney led the Jones Lang LaSalle team on the year-to-date transactions.
"Strengthening fundamentals along with declining vacancy rates for bulk product all bode well for the industrial sector," added Huguenard. "We've seen nine consecutive quarters of positive absorption, with the main drivers being e-commerce, food and beverage distribution, third-party logistics providers and consumer goods and manufacturing. There's nothing quick about this recovery, but it is solid and should continue to improve into 2013."