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“Times have changed, but we’re still very optimistic about industrial. I think this is part of normalization, getting back to basics. There were 500 or 600 million square feet built two years in a row in our sector. That’s a lot of space. It feels like we’re leveling off.”
- PJ Charlton, CenterPoint's EVP, Head of East Region
East Region EVP, PJ Charlton, and SVP Development, Ronel Borner, were among the experts featured at two East Coast events.
East Region SVP, Development, Ronel Borner, was recently featured along with other experts at CBRE’s Regional Industrial & Logistics Forum in New Jersey.
Ronel was joined at the event by fellow East Region Teammates SVP, Investments, Roy Rosenbaum, VP, Investments, Bryan Won, Director of Development Transactions, Andrew Coords, and Analyst, Regan Goldberg.
The following day at the same venue, EVP, Head of East Region, PJ Charlton, took his starring turn on the dais as part of the Capital Markets Deep Dive panel at NAIOPs I.CON East in Jersey City, NJ.
Read NAIOP’s recap of the discussion below.
Other I.CON attendees included Development SVPs Edward Harrington, Brian McKiernan, and Matt Mullarkey, East Region VPs Jay Purdy and Bryan Won, East Region Investment Officer, Thomas Howard, and Central Region Manager of Development Transactions, Michael Brazeal.
Knowing that the markets hate uncertainty, how can industrial investors, owners and developers make wise decisions during a period marked by global trade wars and other wide-ranging geopolitical forces? A panel of experts at NAIOP’s I.CON East this week in Jersey City, New Jersey, shared their perspectives on opportunities and risks facing the industrial capital markets and the critical factors to consider in the year ahead. The panel was moderated by Erik Foster, CCIM, leader for U.S. Industrial Capital Markets, and principal of the Capital Markets Executive Committee at Avison Young.
Joining Foster were PJ Charlton, executive vice president, head of East Region, CenterPoint Properties; Tom Fishman, executive vice president, acquisitions and dispositions, Hillwood; Brandi Hanback, executive vice president, head of development, Rockefeller Group; and Michael Neuman, managing director, real estate, CDPQ.
Compared to other asset classes, Foster said, industrial is doing well, referencing a chart of U.S. National Council of Real Estate Investment Fiduciaries’ Property Index quarterly returns. He noted that while the COVID-19 pandemic era boasted exceptionally high returns for industrial, now “we seem to be stabilizing.”
Turning to compounded annual rent growth for select markets, Foster noted that most of the markets analyzed are positive, including some secondary markets like Nashville. Notable exceptions include the Inland Empire; Indianapolis; Columbus, Ohio; and Las Vegas.
“Before the great financial crisis and even before the [COVID-19] pandemic, 2-3% was [a typical] annual growth rate,” Foster said, “But now 3% and 4% is not unheard of, and we’re seeing that happen in a lot of leasing.”
“I think of our platform and what we’re seeing in leasing and supply challenges, specifically in the Inland Empire,” Hanback said. “A lot of it is due to supply but also indecision and paralysis on the corporate side.”
“We’re developing but taking a little bit more of a cautious approach,” Hanback said. “We’re still bullish longer term but we recognize that absorption is going to take some time to level out.”
Neuman shared his international perspective on investments in U.S. industrial. Based in Montreal, Neuman oversees transactions for all asset types and sectors in the U.S. for Ivanhoé Cambridge, CDPQ’s real estate portfolio.
“We’re investing less and being more cautious,” Neuman said. “We’re also looking for more opportunities to slow down. We’re trying to steer toward more value-add as well and taking risks in very specific areas where we know there are lower supply and lower vacancies.”
“Times have changed, but we’re still very optimistic about industrial,” said Charlton. “I think this is part of normalization, getting back to basics.”
“You know, there were 500 [million square feet] or 600 million square feet built two years in a row in our sector. That’s a lot of space,” Charlton said. “It feels like we’re leveling off.”
Read more at NAIOP.org.
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, follow us on LinkedIn. For all media inquiries, including requests for interviews with CenterPoint executives, please contact media@centerpoint.com or 630.586.8285.
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