YardDog Market Watch - Nov 12, 2024

THIS WEEK’S TOP 3
Stats to Know

1) The U.S. CRE market is $26.8 trillion, and IOS is just 0.7% according to a study done by Clarion Partners and Rosen Consulting Group. But don’t let the seemingly small percentage fool you—here’s the breakdown.

• In the same report, they attempted to filter out properties that would not appeal to institutional investors and the total size of the institutional universe is estimated closer to $11.7 trillion.

• Alternatives (which includes IOS) are becoming an increased share of institutional-investor portfolios. Alternatives account for 37% ($9.9 trillion) of the investable universe and $3.6 trillion, or 31%, of the institutional universe.

• Of the $200B estimated IOS market size, this report suggests that 80% of that is (or can be considered) institutional-level assets. That’s a $160B opportunity for you, YardDogs!

2) The Great Freight Recession is officially over. How do we know this? Let’s break it down!

• Increased Tender Rejection Rates: Indicates carriers are refusing more contracted loads, pointing to tightening capacity.

• Spot Rate Growth: Rising rates show stronger demand for available trucking capacity.

• Reduced Trucking Capacity: New regulations are limiting driver availability, contributing to capacity constraints.

• Political and Market Dynamics: Anticipated policy and economic shifts are expected to boost freight demand further.

Check out FreightWaves to read the article and watch this funny and informative video.

3) PwC and Urban Land Institute's Annual Report reveals top markets to watch for in 2025. No specific IOS callout in the report …but we do think these cities are great picks:

1. Dallas-Fort Worth

2. Miami

3. Houston

4. Tampa – St. Petersburg

5. Nashville

6. Orlando

7. Atlanta

8. Boston

9. Salt Lake City

10. Phoenix

Which market is your favorite for IOS? Reply to this email and let us know for a surprise

CHART OF THE WEEK 
Market Size of Alternative Property Types

The IOS opportunity looks great on this graph when directly comparing market size to other alternative property types that receive more national attention (I’m looking at you Data Centers, Life Science, and Student Housing)!

NOTABLE QUOTES
They said…

“Overall, [we’re] feeling good about economic activity. At the same time, we got one inflation report. … It wasn’t terrible, but it was a little higher than expected.” 
- Jerome Powell said after the 0.25% rate cut was announced last week

“We believe this is just the beginning as more institutional investors seek scale in the highly fragmented IOS sector, and we look forward to continuing to pursue growth opportunities as market fundamentals remain strong.” 
- Matt Pfeiffer, CIO and Managing Partner at Alterra said regarding the 51-asset portfolio sale to Peakstone Realty Partners

RUMOR HAS IT
We’ve heard…

• Peakstone isn’t the only big player purchasing a national IOS portfolio… supposedly there are at least 2 more national portfolios that have been awarded and should close around the end of the year.

• There is incredible IOS momentum carrying us through the end of 2024 and into 2025 and supposedly there are more national IOS portfolios that are launching soon to add to the mix…

Make sure you’re subscribed to the newsletter where we’ll cover these stories and more in future editions!

Please note that these are just rumors we’ve heard in the market. We are not representing any of these claims as true or false, and will cover them in greater detail when more sources and information is available.