Sep
14

North Carolina’s Industrial Market Primed for Expansion

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North Carolina’s industrial market is stacking up as a hotbed of investment activity for development and acquisitions.

In a new report, David AuBuchon, analyst for Milwaukee-based Robert W. Baird & Co., believes EastGroup Properties Inc., Liberty Property Trust and Duke Realty Corp. are ready to expand their industrial portfolios in the state, with Charlotte as a priority for two of the three investors. Sweetening the prospect is the ample capital chasing investment opportunities in North Carolina’s industrial markets. He cited a recent transaction that drew 22 offers and only one with a financing contingency.

AuBuchon places cap rates at 7 percent and replacement cost at $60 per square foot for industrial product. “While the fundamentals in North Carolina appear OK on a relative basis, the demand drivers suggest there is a basis for outperformance among Charlotte, Raleigh and Greensboro,” he concluded. “Based on our analysis of office payrolls in the top 25 markets, these three markets rank among the best in terms of the depth of the downturn and the pace of recovery – two years into the new cycle.”

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