Industrial real estate is booming in the South despite rising interest rates. Developers are building speculative warehouses without pre-leased tenants, and overlooked mid-size markets like Wichita are attracting investors who can move faster than larger competitors.
I think we're going to continue to see a lot of development in the southern part of the United States.
What are the trends that we're seeing kind of from where we're sitting now going forward?
The desire is there for more product, trying to be more strategic about that growth. You have to keep in mind that interest rate increase that affects the guy that's building the building is probably even more impactful for the guy that's running the company that has a $200 million payroll.
So maybe there's a lack of data, but from what you've seen, I mean, cap rates, they've gone up but not a ton, right? Or what have you seen in the market?
It does depend on the asset class. We've seen some of the, you know, the smaller retail strip centers.
If you're active in the market, you have a pretty good sense of what these numbers are going to be, right? You know what your construction is going to be. We're seeing active leases, so a pretty good sense of what the lease rate is. The expectation is there's likely going to be future growth. You can even build an empty shell without having to know who the end user is going to be.
I think in some of the mid-sized markets, you know, stuff we've done down in Wichita is overlooked by some of the larger developers. I think that's a great opportunity to go build in a market like that.
