The industrial sector is slowly beginning to recover and see an improvement in fundamentals, according to Ben Butcher, CEO of STAG Industrial Inc. (NYSE: STAG), a REIT that focuses on the acquisition, ownership and management of single tenant industrial properties throughout the United States.
Butcher said the industrial market is tracking the general economy and has continued to improve, “although in a muted way,” in the last year.
“We’re also seeing on-shoring of manufacturing, which is occurring, in part, due to the Tsunami in Japan and the floods in Thailand,” Butcher said during a REIT.com video interview filmed in New York during REITWeek 2012: NAREIT’s Investor Forum. “So we are seeing generally good economic activity and an increase in industrial activity in the U.S.”
While the industrial sector is improving, Butcher said maintaining that momentum may be a challenge due to macroeconomic concerns.
“Well, the concerns in Europe obviously are affecting our tenants’ ability to make decisions quickly. We are not seeing changes in strategy so much as we are in longer times to get transactions accomplished,” he said.
When it comes to making acquisitions, Butcher emphasized that STAG Industrial’s focus is on buying Class-B assets in secondary markets. As such, he said he has noticed robust transaction activity in that particular portion of the commercial real estate market.
“We’re finding great opportunities for external growth,” he said. “It is probably as good as we have seen it in five years, so it’s a very good opportunity to grow externally for STAG.”