ICOnic News | Why Industrial Real Estate Remains A Tight Market: Trends, Tariffs, and Rising Costs
WHY INDUSTRIAL REAL ESTATE REMAINS A TIGHT MARKET: TRENDS, TARIFFS, AND RISING COSTS
As part of ICO Commercial's National Portfolio Management Services, my team represents clients across the country, partnering with local brokers to facilitate transactions across various property types - including office, industrial, healthcare, retail, and land.
Among these, industrial properties present some of the greatest challenges for our clients, particularly in East and West Coastal MSAs. In these markets, the lack of available land for new development often requires the demolition and rezoning of existing facilities to accommodate the modern features and configurations that today's tenants demand. This limited supply, coupled with high demand, has created a significant imbalance in the market.
The effects of the COVID-19 pandemic further compounded this issue, as construction slowdowns delayed the delivery of new and renovated industrial properties. As a result, vacancy rates dropped below sustainable levels, driving NNN lease rates up by 50% to 100% in many markets. In turn, these increased rental rates will likely cause property taxes to rise, further driving up occupancy costs.
Just as some markets were beginning to show signs of stabilization, the introduction of new tariffs has caused another layer of uncertainty. If these tariffs persist, it could lead to increased demand for warehouse space as companies hold inventory for longer periods, placing additional strain on an already limited supply. Moreover, if major retailers and suppliers see profit margins tighten, their credit ratings could be impacted - potentially pushing cap rates higher and forcing landlords to increase rents to meet refinancing requirements dictated by their lenders. This creates a compounding effect that could pressure property owners until market conditions shift or capital markets stabilize.
While the long-term impact remains uncertain, one thing is clear - industrial real estate will continue to face supply-demand imbalances and rising costs. Navigating this market will require a strategic approach, leveraging strong broker partnerships and deep market knowledge to help clients make informed decisions.
- Cameron Tapley, ICO Managing Director - National Portfolio Management Service Specialist
ICO 2024 AWARDS CELEBRATION
ICO is truly grateful and appreciative of the dedication, effort and exceptional performance that our team members make to our organization year over year. Beyond the work itself, we are thankful for our team's positive attitude and collaborative spirit.
Every year ICO recognizes and celebrates our team's successes, contributions, and ICO tenure at our annual Company awards event! Individual awards are given to recipients based on the majority votes by the rest of the team.
Here's a glimpse of just a few of this year's standout awards:
Chief Closer Award - This award recognizes an ICO team member who consistently excels at closing deals, turning leads into sales, and surpassing high sales targets. Their exceptional closing abilities and outstanding performance set them apart as a top producer within our team.
Spotlight Award - This award is presented to an ICO team member who consistently shines in their role, demonstrating exceptional performance, dedication, and a positive attitude that uplifts and inspires those around them. They help foster a culture of appreciation and motivation within our organization.
Extra Mile Award - This award is given to an ICO team member who goes above and beyond to ensure maximum productivity and success. Their unwavering commitment and willingness to go the extra mile to get the job done make them an invaluable asset to the team.
The whole ICO Team is instrumental to our success, and we enjoy celebrating our wins together!
GETTING TO KNOW SETH GREEN
1. What is your favorite book and why? "For Whom the Bell Tolls - I've always appreciated Hemingway's writing style, but this book stands out to me because it's a powerful story about finding God's beauty and love even in the darkest, most challenging times. It's a reminder that no matter how hard life gets, you can't give up-even if, in the end, you have to sacrifice everything for what truly matters."
2. What is your favorite podcast and why?
"I have to admit-I'm a bit of a "Joe Bro." The Joe Rogan Experience is my go-to because of the incredible variety of guests he brings on. His ability to engage in deep, thought-provoking conversations keeps me coming back."
3. What has been your favorite vacation and why?
"My favorite trip was the first time my wife, Susanne, and I went to Colorado together. We climbed a mountain, and on the way down-humbled by the experience-I watched her and our dog hiking ahead of me. In that moment, God made it clear: This is why you're here. It was a moment of clarity and purpose that I'll never forget."
4. What is the best business advice you have received?
"I've been fortunate to receive a lot of great business advice over the years, but a few key lessons stand out:
Know your worth-and be able to put a monetary value on it.
"Go into draft mode"-if something is really bothering you, write a draft email expressing exactly how you feel. Then step away and revisit it the next day. More often than not, you'll delete it and start fresh.
Recognize the cycle-no single deal or issue is the end of the world. Business ebbs and flows, and perspective is everything."
5. Summary of your business and who an ideal client/prospect might be:
"My business is all about making the right land deals happen-whether that means finding the perfect piece of land for a buyer or connecting a seller with the right buyer. At the heart of it, I bring people together to ensure both sides walk away satisfied. My ideal client is anyone with a genuine need to buy or sell a solid piece of land."
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