REDnews DFW Industrial Summit

• As multifamily, retail and office “feel the pain,” industrial is holding up well, and accelerating, as e-commerce continues expansion; investors are transferring their attention to industrial from these other sectors
• Companies are bringing back manufacturing from Asia to the U.S. and to Mexico, which is much closer to DFW; companies are coming here from California; labor costs in Mexico now approximate those in China, as China’s economy has strengthened
• Distribution and heavy manufacturers seem strong, but some light manufacturers are seeing stress
• DFW is strategically located in the middle of the country, is in the central
time zone, is one day’s drive from Mexico and Port of Houston, and it is “the” hottest industrial market in the country, and some say “the world;” DFW has a super freeway network and good general accessibility
• Manufacturers wanting to “near-shore” from China to Mexico are hampered from the difficulty of business travel to MX during COVID
• After a pause with the onset of COVID, investment deals are do-able and cap rates are back to where they were at the start of the year
• Loans are available at an average of 60 percent LTV, with lenders requiring ample debt service coverage—however, low leverage requires more expensive equity and mezzanine money
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