Published in mid- 2023 and updated in Q2 2025, Alpaca Real Estate’s research on infill industrial properties reveals a compelling investment thesis centered on off-market acquisitions of multi-tenant warehouses in established urban markets with significant embedded value potential.

Key Findings:

• Light industrial warehouses represent approximately 50% of U.S. industrial inventory, yet only 8% of sub-125k SF assets are institutionally owned, creating opportunities in fragmented markets
• The 100k-300k SF multi-tenant segment maintains vacancy rates as low as 3.4% for sub-100k SF buildings and 5.9% for 100-300k SF buildings, significantly outperforming larger distribution facilities 
• Logistics companies spend only 3-6% of total costs on facility leases versus 45-70% on transportation, making location more critical than rental rates for tenant decision-making
• Embedded mark-to-market opportunities range from 20-40% across major markets, with Alpaca’s analysis of ~14 million SF showing average rent increases of 27% at full mark-to-market
• On shoring of manufacturing combined with E-commerce growth continue to drive demand for infill locations with proximity to dense population centers

Alpaca Real Estate’s disciplined approach targets these overlooked assets through local relationships and professional management strategies, capitalizing on the sector’s structural advantages and fragmented ownership landscape.

Download the full research report ➡️