Insights Jul 26, 2018 Elion Partners

Industrial Sector Fuels Surge in U.S. Commercial Property Value

Industrial Sector Fuels Surge in U.S. Commercial Property Value

This month, Green Street Advisors released its Commercial Property Price Index, a leading measurement of values across five major property sectors. While commercial property values have generally plateaued over the past eighteen months, there was marked growth in the industrial category. Industrial outperformed the broader commercial property market, which saw values remain flat between June 2017 and the end of the first half of this year. This is likely to support the continued growth of Elion’s portfolio of funds, which are heavily invested in industrial assets.

One might ask: why are industrial properties such a critical part of growth in the real estate industry? As James Carville once coined the phrase: it’s the economy, stupid.

This week, The Federal Reserve released U.S. industrial production data, which showed an increase in June. Industrial production rose 0.6 percent last month and accelerated at a 6.0 percent annualized rate in the second quarter after a 2.4 percent growth pace in the first quarter. This is boosted by a sharp rebound in manufacturing, among several other trends. According to the report, as cited by Thomson Reuters: this is the latest sign of robust economic growth. Manufacturing output increased at a 1.9 percent rate in the second quarter after growing at a 1.7 percent pace in first quarter. Manufacturing, which accounts for about 12 percent of the economy, is being supported by a strong domestic and global economy. Elion looks forward to continuing offering investors access to the positive output of this promising trend.