NEW YORK -- Jan. 31, 2006 -- More commercial property investors are taking a liking to industrial real estate. The segment is dominated by warehouses and distribution facilities but also includes research and development (R&D) buildings and "flex" space that includes both offices and industrial uses.
Improving fundamentals in the sector have sent development and investment into the stratosphere in some markets. Investment activity has also been on the increase thanks to sale-leaseback deals in which firms sell their facilities and then lease them back from the acquiring company.
Real Capital Analytics reports that approximately $33 billion of industrial space changed hands in 2005. Over that same 12-month span, the average asking price for an industrial building increased 11 percent to $62 per square foot with space in downtown markets going for substantially more.
"There's no question that industrial real estate is very strong right now; it's a great market to be operating in," says First Industrial Realty Trust President and CEO Michael Brennan. His real estate investment trust (REIT) owns and manages more than 100 million sq. ft. of industrial properties nationwide, including $2.2 billion of assets his company acquired in just the past six months.
Source: Investor's Business Daily, Joe Gose (01/30/06)
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Thursday, February 02, 2006
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