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The Industrial Shift

[vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”left” top_padding=”2%” bottom_padding=”2%” overlay_strength=”0.3″ shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_link_target=”_self” column_shadow=”none” column_border_radius=”none” width=”2/3″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_column_text] 30 years ago, the average industrial broker spent nearly all of his or her time doing leases as opposed to sales. At that time, interest rates were in the […]

[vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”left” top_padding=”2%” bottom_padding=”2%” overlay_strength=”0.3″ shape_divider_position=”bottom” bg_image_animation=”none” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_link_target=”_self” column_shadow=”none” column_border_radius=”none” width=”2/3″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_column_text]

30 years ago, the average industrial broker spent nearly all of his or her time doing leases as opposed to sales. At that time, interest rates were in the 18 percent range, and buying a building did not make financial sense for most companies. As interest rates decreased, the percentage of sales over leasing increased. Today, the average industrial broker spends 65 percent of his or her time on sales and 35 percent on leases. One of the main side effects of all these tenants becoming owners is that the overall tenant base has decreased, since the universe of tenants has not grown with the expanded population base.
Here’s an example of how the industrial multi-tenant market has been affected by the shift from leases to sales:
During the economic upturn of the 1990s, the White Bear Lake area had an explosion of multi-tenant buildings being built and filled. On Buerkle Road along Interstate 694, eight multi-tenant buildings totaling approximately 300,000 square feet were constructed, and another eight buildings totaling 350,000 square feet were built between Vadnais Heights and White Bear Lake, adding 650,000 square feet to the industrial universe. Compared to today’s climate of no current construction underway in the White Bear Lake area, it’s easy to see the stark difference in the marketplace.[/vc_column_text][/vc_column][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_link_target=”_self” column_shadow=”none” column_border_radius=”none” width=”1/3″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid” bg_image_animation=”none”][vc_widget_sidebar sidebar_id=”blog-sidebar”][/vc_column][/vc_row]

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