Every lender in the country is fighting for any industrial deal that comes to the market, including warehouse, distribution, flex and cold storage properties. Borrowers are seeing extremely aggressive terms such as higher leverage, longer interest-only periods and sub-3% rates. The low cost of tenant improvements and common area maintenance combined with the “stickiness” of industrial tenants makes this property a no-brainer for lenders.
All this competition will push lenders into smaller markets, especially since core industrial assets in primary and many secondary areas are owned almost exclusively by institutional-grade investors, most of which do not need new lending relationships. Lenders will also start to consider more vacant properties or those that are not fully stabilized.
Life companies will be the most active in the space, while banks will be the best option for bridge and construction loans. CMBS lenders, credit unions, bridge lenders, debt funds and private money lenders will also strive to win these deals this year.
