Capital Analytics Features CenterPoint SVP of Investments PJ Charlton in Invest: Greater Fort Lauderdale 2021
Posted By Staff Writers On June 23, 2021 @ 8:46 am
Capital Analytics featured CenterPoint’s Senior Vice President of Investments PJ Charlton in its annual business intelligence publication, Invest: Greater Fort Lauderdale 2021.
Read what PJ said about CenterPoint’s South Florida investment focus to where he sees industrial real estate heading, among other topics:
What makes the Greater Fort Lauderdale area such a promising market?
When you fly into Fort Lauderdale and look out the window, there are only a few places in the country that look like that – there is essentially no undeveloped land left. There are a limited number of places in the country where the markets are fully built out. That creates barriers to entry and makes it hard to find land, which leads to higher rent growth over the long term.
The area aligns well with our strategy. We invest close to the consumer, close to ports and close to intermodal and logistics hubs, in combination with a big population center. We believe this is a solid strategy that delivers good risk-adjusted returns over the long run. By being in an infill market like South Florida, as opposed to greenfield markets where you can always move further out and find another building, we’re able to achieve higher rent growth. Of course, the pandemic has accelerated the need for being in close proximity to the population base as well.
What is your outlook for the industrial real estate sector?
Our outlook is definitely bullish for the industrial sector. The fundamentals are very sound and probably have never been healthier. The occupancy rate for industrial nationally is somewhere in the mid-’90s, plus or minus, so that’s a pretty healthy number. It’s hard to build industrial properties. It’s hard to find good sites, the land prices have gone up, and the entitlement processes have become more challenging. All of this puts a barrier on how much product can be delivered.
We feel pretty good that the supply side is in check and won’t get overbuilt in the near term. The demand side is very healthy with the continued growth of e-commerce. Our tenants need more space than they ever have, and they need more parking. What’s the result of this? I think we will continue to see rent growth that outpaces inflation. Industrial rents have grown approximately 5 or 6% a year across the country over the last five years, and in the best markets, even higher. We see that trend continuing. We’ll continue to see strong tenant demand, and certainly, there’s tremendous demand by investors. I believe cap rates will remain low and that land values and building values will continue to increase. Certainly, there are challenges, but industrial has a lot of good things going for it.
About CenterPoint Properties:
CenterPoint is an industrial real estate company made up of dedicated thinkers, innovators, and leaders with the creativity and know-how to tackle the industry’s toughest challenges. And it’s those kinds of problems—the delicate, the complex, the seemingly-impossible—that we relish most. Because with an agile team, substantial access to capital, and industry-leading expertise, those are exactly the kinds of problems we’re built to solve. For more information on CenterPoint Properties, visit centerpoint.com, follow @centerpointprop on Twitter or engage with us on LinkedIn.