Small-bay industrial remains largely held by local operators and individual investors. Fragmentation is what makes aggregation and professionalisation possible.
In most institutional asset classes, fragmentation is treated as a problem — a sign of a market too small, too messy or too labour-intensive to deploy capital into efficiently. In small-bay industrial, we think it is the point.
The current ownership picture
Light industrial transactions under 150,000 square feet accounted for 62% of industrial transaction volume in 2024, according to Corebridge Financial. Institutional buyers accounted for 20% of that volume — up from 16% the prior year, but still a minority of a segment that represents the majority of transactions.
The remainder sits with local operators, founding families, retiring owner-occupiers and individual investors. Many hold a single building. Many have owned it for decades.
What fragmented ownership tends to produce
Assets held individually and managed part-time tend to share characteristics:
- Below-market rents, particularly where a long-tenured owner values stability over income
- Deferred capital, because a single-asset owner cannot spread capital costs
- Inconsistent leasing, often handled directly and without market pricing discipline
- No brand or standard, so the tenant experience varies building to building
- Limited data, since one owner sees only their own enquiry flow
None of this reflects poor stewardship. It reflects the natural limits of owning one building.
Where an operator can add value
An operator with more than one asset can do things a single-asset owner structurally cannot: centralise leasing and management, spread capital programmes, apply a consistent standard of presentation, negotiate with vendors across a portfolio, and — importantly — see demand across many buildings at once.
That last point is underrated. Enquiry volume by unit size, time-to-lease, renewal behaviour and rent achieved across a cluster of assets is real market intelligence. It informs pricing, unit mix and what to buy next.
The honest caveat
Aggregation is not automatic value creation. Buying fragmented assets at full price and managing them the same way the previous owner did produces a larger version of the same result. The opportunity depends on acquiring at a sensible basis and then actually doing the operational work.
That is why we describe this as an operating business rather than a passive holding.
Sources: Corebridge Financial, “Light Industrial Outlook: Small Bay, Big Play,” June 2025.