TRENDING
Industrial properties soar to new highs amid tight inventory: report
Properties are trading for $158/square foot in the first quarter
The feverish industrial investment market reached new highs in the first quarter, as tight supply continued to drive rates up.
Sale prices rose to an average of $157 per square foot, up 17.3 percent year-over-year for buildings larger than 10,000 square feet in Los Angeles. Some properties are trading above $300 per square foot, according to a new report from commercial brokerage JLL.
That’s quite a jump from what industrial buyers were paying back in 2013. In just five years, the actual sales price average jumped nearly 70 percent, up from $93 per square foot.
The lack of supply, plus an uptick in demand from food and beverage companies, logistics, manufacturing, and e-commerce companies, have been the main drivers for the soaring prices, brokers said.
Often, the buyers that are paying top-dollar for industrial properties are institutional investors, pension funds, REITS or even private investors, said Joe Dimola, an industrial broker at JLL, said. “We’re seeing land trading at all-time highs,” he said.
Earlier this year, Newport Beach-based Bixby Land Company announced plans to acquire up to $400 million in industrial properties in California and four other states. That came shortly after acquiring a 121,300-square-foot property in Anaheim, as well as a 160,000-square-foot building in Cypress.
Earlier this week, a SpaceX-leased industrial campus hit the market. With 1.4 million square feet, sources said the property could trade for at least $180 million.
Meanwhile, companies in the sector are consolidating. The Blackstone Group reached a deal to buy New York-based industrial landlord Gramercy Property Trust for $7.6 billion this week. That came on the heels of another recent acquisition, where Prologis, a major industrial landlord in L.A., spent $8.4 billion for DCT Industrial Trust.