Why are institutions buying industrial buildings at extremely aggressive cap rates? It’s all about the opportunity to move the low in-place rents up to market. This is known as a “mark to market” opportunity. While office and retail rents generally sit at or above market, industrial rents are commonly 10%-50% below market. Buy one of these buildings, push rents up by 30%, sell at a similar cap rate, that’s the basic strategy. This strategy is not only open to large institutions buying massive properties. We see these conditions frequently on smaller $1-$5 million properties…
Read the full article here: https://nerej.com/industrial-the-mark-to-market-investment-strategy-by-harrison-klein
