“Infrastructure is the foundation that makes it possible for Americans to thrive and live lives of their choosing."
Clear patterns are gifts to investors, and real estate investors benefit from plenty of established relationships between the various asset types and macro-economic, secular and even cultural trends. Industrial real estate has a particular relationship with our transportation infrastructure, and a recent paper reveals new details about how trends in the movement of goods are strong predictors of private and publicly held industrial real estate values.1
The research finds “statistically significant positive long-run relationships” between truck tonnage and the Dow Jones Transportation Equity Index and industrial property values nationally. Trucking activity leads to higher warehouse demand, driving up rates and value. This was found to be true for the entire study period, but the effect of trucking tonnage on industrial values “increased significantly” after the financial crisis. Crude oil futures also have a significant relationship with industrial property values, but the relationship has been less consistent.
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