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  • Real Estate Investment as an Inflation Hedge

Rob Sistek, senior managing director, investments at BKM Capital Partners, tells that capital markets are bullish on the industrial sector because there’s both strong secular demand for the asset type and a shortage of supply in some of the industrial sub-sectors.

“Investments in industrial real estate have largely outperformed other asset classes due to strong fundamentals, which have benefited from e-commerce (particularly last-mile distribution), labor shortages, increased consumer expectations and, more recently, US onshoring of manufacturing.

“In fact, manufacturing demand is expected to rise this year as more companies onshore their operations to avoid supply chain disruptions.”

Sistek said that investors are expected to continue targeting real estate for attractive returns and stability relative to other asset classes, and increasingly, as an inflation hedge, which is expected to drive increased investment volumes in 2022.

“Industrial real estate is proving to meet and exceed the return requirement investors seek, compared to other asset classes or investment options,” he said. “Investors are paying close attention to rapidly rising rents and increasing NOI, which in turn boosts IRRs and equity multiples.”

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