Real Estate Investor Up Close

There were signs of the nascent industrial market recovery at Grubb & Ellis’ national industrial meeting held near Dallas this week, where a panel of leading executives debated the state of the market. · Tenants, though still cautious, are beginning to emerge from their shells. Jeff Thornton, Senior Vice President of Duke Realty’s Dallas operations, cited three examples of large tenants beginning to execute on their expansion plans. · Jim Martell, Chairman and CEO of Ridge Property Trust, coined the term “vacancy tranches,” noting that some key size categories are tightening. Jim cited large distribution centers of 700,000 square feet and up in Southern California’s Inland Empire, noting that few options are available for tenants and owner-users. · Brian Townsend, Senior Vice President at CenterPoint Properties, confirmed this trend, noting that a tenant in one of his developments opted for two smaller buildings because a single, larger building was unavail

Grubb & Ellis recently surveyed its investor clients. One of the notable findings is that 81 percent say they are net property buyers in the next 12 months. This is consistent with an informal show-of-hands survey at the company’s client dinner last night in Chicago. Most of our guests had closed a deal in the last 60 days. At a similar dinner around this time last year, no one said they were buying or selling. But now, the commercial real estate industry – and in fact industries across the economy – are moving ahead, cleaning up the excesses of the bubble years and dealing with still-sluggish demand as best they can. They are no longer frozen in place. They are buying, selling, pruning, hiring (selectively) and positioning themselves for stronger growth in the years ahead. That is the very definition of a recovery. Source: Grubb & Ellis Research

The dollar value of U.S. exports rose to $153.3 billion in July, a monthly increase of 1.8 percent which more than erased the prior month’s decline of 1.3 percent. Imports dropped by 2.1 percent to $196.1 billion. The surge in exports combined with the smaller import volume narrowed the July trade deficit to $42.8 billion, a reduction of nearly $7 billion from June. The decline in the trade deficit is a positive early indicator for third-quarter GDP because exports add to GDP while imports are subtracted from the calculation -- although the decline in imports is likely to be a one-month aberration. Overseas demand for U.S. exports should help propel the manufacturing sector even as domestic demand remains tepid. Overall the report is a positive sign for the U.S. industrial market, suggesting that the third quarter should bring a second consecutive decline in the vacancy rate. Source: U.S. Census Bureau, Grubb & Ellis