**Industrial Occupiers Shift Toward Ownership of Older Properties**
As industrial tenants continue to expand into the 2 billion square feet of new space delivered since 2021, they are also leaving behind older facilities. However, rather than remaining vacant, these aging properties are being snapped up by other industrial companies eager to transition from leasing to ownership.
According to a recent CBRE report, property sales to industrial occupiers surged by 32% year-over-year in 2024. This uptick in demand has also led to a 5% increase in average property prices, now averaging $152.42 per square foot.
More than half of these acquisitions involve facilities built before 1980. In high-activity markets, all buildings purchased by occupier-owners were at least 25 years old.
Key motivations behind the trend include:
– Long-term cost savings once mortgages are paid off
– Tax benefits
– Greater customization capabilities for operations
– Avoiding rent hikes and risk of lease termination
CBRE projects that nearly 21,300 industrial leases will expire over the next three years, with more than 12,600 involving pre-existing buildings. With this anticipated rise in availability, CBRE expects that occupier acquisitions will begin to account for a larger share of industrial net absorption.
This shift signals a strategic long-term investment by industrial companies seeking increased control and stability over their operating spaces.
