**Industrial Occupiers Moving Toward Ownership as Older Properties Gain Popularity**
As the industrial real estate market continues to evolve, a growing number of industrial tenants are leaving behind newer facilities—delivered as part of the 2 billion square feet added since 2021—in favor of purchasing older industrial properties. This trend is gaining momentum, with industrial companies increasingly buying up aging facilities rather than allowing them to remain vacant.
According to a recent report by CBRE, industrial property sales to occupiers in 2024 have surged by 32% year-over-year. This increase in demand has contributed to a 5% rise in average sales prices, which now stand at $152.42 per square foot.
Interestingly, a significant portion of these acquisitions involve older buildings. More than half of the properties purchased by industrial occupiers so far in 2024 were built before 1980. In the nation’s most active industrial markets, all properties acquired were at least 25 years old.
A key image from the report, titled “Acquisitions by Building Age,” highlights this growing preference for older facilities among buyers.
Several key factors are driving industrial occupiers to shift from leasing to ownership:
– Long-term cost savings once mortgages are paid off
– Tax advantages associated with ownership
– Greater ability to customize properties
– Protection from rent increases and unexpected lease terminations
CBRE also reported that nearly 21,300 industrial leases are set to expire over the next three years, with more than 12,600 involving pre-existing buildings. As the supply of available properties grows, the firm anticipates that industrial occupier acquisitions will take on an increasingly significant role in the sector’s net absorption.
This trend signals a strategic shift in the industrial property landscape as businesses seek more control over their facilities and financial outcomes by transitioning to ownership.
