Institutional Capital Discovers Small-Bay Industrial, and Greek Real Estate Partners Is Already There

Institutional Capital Discovers Small-Bay Industrial, and Greek Real Estate Partners Is Already There

For roughly 50 years, small-bay industrial properties drew little attention from institutional investors, who consistently favored larger, higher-profile deals. That is changing quickly. Investors are now circling the asset class, drawn by steady cash flow and a tenant base that has proven reliable for decades. Some observers compare the moment to the institutional discovery of industrial outdoor storage several years ago.

David Greek, Managing Partner of Greek Real Estate Partners, shared his perspective on the trend in a new feature by Paul Bergeron for BINJE, New Jersey's business news publication. The article profiles GREP's portfolio of approximately 23 million square feet, of which 6.5 million square feet is classified as small bay, concentrated in Central and Northern New Jersey and the Greater Philadelphia region of Pennsylvania.

"Institutions are looking for ways to participate in real estate markets while reducing risk and vacancies in their portfolios without cutting large checks," Greek said. "They look for downside protection, stability, and a narrative that provides upside without relying on macroeconomic changes." However, as Greek notes in the article, ground-up small-bay development remains largely uneconomic, which means the supply constraint on the asset class is structural even as demand accelerates.

The data supports the shift. Industrial transactions under $100 million recently represented about 70 percent of all industrial trades, the highest share in more than a decade, while national small-bay vacancy sits near 4.2 percent compared with 7.4 percent for large-scale product. Small-bay rents have grown by more than 40 percent since 2020.

The article also highlights an emerging layer of recreational tenants, from trampoline parks to dance studios and indoor cricket training, leasing small-bay space instead of traditional retail strips. Greek explains the economic case: industrial rents run well below retail rents, the physical plant suits these uses without expensive retrofit, and fit-out costs are lower because operators need open volume rather than storefront finishes. Within GREP's own Central New Jersey buildings, a children's trampoline and play facility, a dance and theater school, an indoor cricket training center, and a cross-fit gym all operate today.

Read the full feature for a detailed profile of GREP's small-bay holdings, including 400 Apgar Drive in Somerset, 10 Alvin Court and 40C Cotters Lane in East Brunswick, and the Walsh Drive cluster in Parsippany.

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