Leading Merchant Builder Dov Hertz Identifies Market Trends
Dov Hertz
Dov Hertz sees smaller property investment, community outreach and demand for power as key issues for the year ahead
Dov Hertz addressed the narrative that the post-Covid industrial marketplace is over-developed, noting that the sector is poised to overperform, with projected annual NOI growth higher than any other asset class, especially in geographies that are underdeveloped. In particular, Hertz sees opportunity in infill markets, which are poised to outperform, with 7.8 percent projected annualized growth.
“With urban, East Coast properties, you’re not dealing with cornfields,” Dov Hertz tells Kaplan. “You’re retrofitting for today’s needs -- adding loading docks, developing better parking ratios, bringing in more electricity.”
Indeed, power needs could be the most important trend facing industrial development in the years to come. “The needs of data centers, especially AI data centers, are absolutely extraordinary,” Dov Hertz says. “Companies are talking about sites that need the power of an entire medium-sized city. How investors and regulators solve for that will be critical – really for the country as a whole.”
Dov Hertz sees smaller buildings as an opportunity, with higher rents, higher occupancy and more tenant demand. “Investors have an increased appetite for smaller deals,” he says.
As well, Dov Hertz notes that foreign investment into the industrial real estate sector is up, rising to 32 percent in 2024, nearly triple the 11 percent allocation in the period from 2011 to 2019.
Among the challenges facing developers in the coming year, the developer talked about working with community groups to recognize that people’s needs are layered. “People are concerned about traffic and congestion,” he says. “But I always ask the question: What percentage of your community orders online? Because we know the answer is 100 percent. They can stop ordering online right now, and there won’t be any warehouse tenants. The reality is a logistics company can go to 50 different households, as opposed to 50 households driving 50 cars to the mall. Constituents have complex needs, it’s not just a good guy and a bad guy.”
About DH Property Holdings
DHPH is a leading operator and developer of industrial facilities in primary and port centric markets. Led by Dov Hertz, the team brings unparalleled experience in the acquisition, design, development and repositioning of industrial properties nationally. Since its founding in 2016, DHPH has acquired over $2.1 billion in real estate assets across over 4.0 million square feet of Class A developments, over 1.7 million square feet of infill industrial buildings and over 50 acres of industrial outdoor storage in the Northeast and Mid-Atlantic Regions. The company developed the first multi-story industrial building on the east coast.
Kevin Pearce
Pearce Media
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