Sales Volume & Cap Rates

For the first time in recent quarters, single-tenant industrial sales outpaced the other property types, reporting more than $5.2 billion during Q3 2017.

quarterly sales volume vs. average cap rates, industrial single-tenant*

Source: Stan Johnson Co. Research, Real Capital Analytics
*Monthly chart cycles among office, industrial and retail.
Source: Stan Johnson Co. Research, Real Capital Analytics

For the first time in recent quarters, single-tenant industrial sales outpaced the other property types, reporting more than $5.2 billion during Q3 2017, compared to $5.1 billion in office and $3.7 billion in retail. This brings year-to-date sales volume for the industrial sector to nearly $13.5 billion, or $1.4 billion more than at this time last year. Industrial cap rates continue to be the highest across the three primary single-tenant property types. However, they saw the largest quarter-to-quarter compression, falling 15 basis points to end third quarter at 6.7 percent—office and retail cap rates fell less than five basis points each. This continued compression across the industry, albeit it fairly insignificant, continues to illustrate the “U-shaped” cap rate trendline that we’ve been experiencing for the last 18+ months. Looking forward, we expect cap rates to bounce along the bottom for another several quarters before beginning noticeable and sustained upward movement.

— Focusing on business development, industry and client-specific research, and the analysis of local and national market trends, Lanie Beck has been the Director of Research for Stan Johnson Co. since 2013. Beck began her career with the Dorey Cos. where she provided Atlanta commercial real estate research as a research analyst and then manager. Responsible for building a local platform, Beck subsequently joined JLL as its Atlanta research manager. After successfully expanding the company’s research coverage to the Carolinas, Beck moved into a nationally focused role as the Director of Research Operations, where she was named a company vice president in July 2011.