As 2010 came to a close, analysts predicted that commercial real estate would not experience a full-fledged double dip and investors hurried to get into commercial properties while the getting was good. However, there was one type of property that they largely steered clear of: industrial real estate. This sector of the commercial market, which includes mostly warehouses and distribution facilities, had been predicted to lag in recovery behind multifamily housing, resort properties and even retail and office space, failing to make a recovery until 2012 at the earliest[1]. In the first month of 2011, though, industrial real estate looks to be overtaking other sectors of the market and could be gaining some serious momentum in early 2011 even in “hardest hit” areas like Las Vegas, Nevada[2].

One of the latest moves that indicates industrial real estate is about to make a comeback is a “$2 billion bet” by Blackstone Group LP, owner of Hilton Hotels[3]. The firm has built a portfolio of 275 industrial properties over just the last six months, and some insider industry experts predict that the group plans to triple its industrial holdings this year. Because industrial property has not been perceived as particularly attractive in recent years, the sector “had not recovered at nearly that same pace as apartments, hotels or the majority of other sectors,” explains Steven Frankel, a Green Street Advisors analyst. As a result, he added, industrial property pricing has “looked very attractive on a relative basis.”

Currently, Blackstone Group is not commenting on its industrial portfolio or future purchasing plans. However, the big buys have some experts wondering if the group is about to take its industrial arm public. Do you currently have assets invested in industrial real estate? Is this a sector you would consider buying in this year?

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[1] http://www.tulsaworld.com/business/article.aspx?subjectid=32&articleid=20110122_32_E1_Tulsaa462840

[2] http://www.lasvegassun.com/news/2011/jan/24/las-vegas-expected-have-huge-economic-recovery/

[3] http://www.reuters.com/article/idUSTRE70O68920110125