Despite a downturn in industrial sales volume attributed to higher interest rates, tightened capital markets and a shift toward normalizing demand, the industrial property market hasn’t seen any significant discounts. Even with sales figures experiencing a dip in recent quarters, the average sale price of industrial properties continues to rise with a 9.6% quarter-over-quarter increase and a 2.0% year-over-year uptick.

In fact, according to the latest U.S. industrial market report from CommercialEdge, nationwide industrial sales reached $5.7 billion in the initial two months of 2024 with properties trading at an average of $132 per square foot.

LA Leads Early 2024 Industrial Sales

Los Angeles led the pack in industrial sales volume for the first two months of 2024 by closing deals totaling $435 million. Notably, a significant portion (nearly $200 million) stemmed from a single acquisition — CenterPoint Properties’ purchase of four facilities in Los Angeles’ South Bay submarket at the end of February.

Following closely behind was Chicago, which recorded $373 million in industrial sales in February. Meanwhile, the Bay Area captured the third spot with a deal volume of $321 million.

Likewise, significant activity also extended to other key markets across the country, as well: Dallas-Fort Worth secured the fourth position with $318 million in sales, followed by Phoenix at $298 million. Denver also witnessed notable sales of $240 million.

Beyond the top performers, the latest industrial property report revealed several other major markets surpassing the $100 million threshold in sales. Namely, Houston, Texas, reached $220 million in industrial sales through February, followed by Seattle at $176 million. And, on the East Coast, New Jersey emerged as the leader in the Northeast with transactions totaling $171 million.

Atlanta also recorded significant activity with deals worth $168 million. Not to be outdone, Inland Empire, Calif., ($143 million) and Columbus, Ohio, ($123 million) followed closely behind. Finally, Boston closed out the list with notable sales of $107 million in the first two months of 2024.

Western Markets Dominate Average Sale Prices

Western industrial markets topped the charts in terms of average sale prices for the first two months of 2024 with Los Angeles leading the way at $320 per square foot. Clearly, this high price reflects continued investor interest, despite a recent slowdown in price appreciation. For example, Los Angeles’ average sale price jumped 44.7% between 2019 and 2021, rising from $190 to $294 per square foot. And, while the growth has moderated, a recent increase of 8.9% brought the average to $320 per square foot in 2024.

Following Los Angeles, the other strong performers on the West Coast were the Bay Area at $274 per square foot and Seattle at $256 per square foot, in second and third places, respectively.

Moving eastward, New Jersey emerged as the leader in the Northeast with an average price of $249 per square foot, followed by Boston at $234. Then, in the South, Nashville, Tenn., took the top spot at $197 per square foot.

Nationally, the average sale price stood at $174 per square foot. Several other markets met or approached this benchmark, including Portland, Ore. ($174); Inland Empire, Calif. ($170); Phoenix ($168); and Dallas ($165). Notably, the Twin Cities was the only Midwestern market to break the $100 barrier, averaging $123 per square foot.