Industrial real estate has remained in vogue well into 2021. Transactions totaling $18.1 billion closed in the sector through May, and this year’s volume should match—if not surpass—the $44.4 billion closed in 2020, according to a recent CommercialEdge report. It isn’t just a matter of more properties selling, however: Demand in supply-constrained markets, especially those near major ports, has led to a massive spike in pricing. Sales in the first five months of the year averaged $103 per square foot, a 16.3 percent increase over last year.
Although more than 60 percent of industrial transaction volume through May was focused on properties near ports or in rapidly expanding Sun Belt markets, industrial assets in many other parts of the country are also drawing capital. The table below, based on CommercialEdge data, highlights the five largest single-asset industrial transactions closed this year through May.
|Rank||Property Name||Sale Price (MM)||Buyer||City|
|1||10Edison||$247.0||Property Reserve||Edison, N.J.|
|2||951 Willowbrook Road||$201.5||CenterPoint Properties||Allentown, Pa.|
|3||Elion Logistics Park 55 – 29901 S. Graaskamp Blvd.||$130.0||Silver Creek Development||Wilmington, Ill.|
|4||Mid-Atlantic Commerce Center – 7600 Assateague Drive||$125.0||BentallGreenOak||Jessup, Md.|
|4||1835 U.S. Route 9||$125.0||Real Capital Solutions||Castleton-On-Hudson, N.Y.|
4. 1835 U.S. Route 9
Real Capital Solutions’ $125 million acquisition of a 1 million-square-foot Amazon facility in Castleton-On-Hudson, N.Y., was the largest industrial deal to close in the state during the first five months of 2021. The seller, Scannell Properties, developed the asset, which opened late last year. The property is Amazon’s first fulfillment center in upstate New York and the e-commerce giant plans to eventually employ 1,000 people at the facility.
As the company rapidly scales up its distribution channels nationwide, investor demand for its facilities has also escalated: A recent CommercialEdge report showed that, since the beginning of 2020, Amazon-leased facilities have sold, on average, for $145 per square foot—approximately 50 percent higher than the asset class as a whole.
4. Mid-Atlantic Commerce Center – 7600 Assateague Drive
BentallGreenOak paid $125 million for an 853,520-square-foot structure in the Mid-Atlantic Commerce Center of Jessup, Md., barely one year after the seller, Greenfield Partners, acquired the property in February 2020 for $88 million. Following that earlier transaction, Greenfield implemented a number of major capital improvements at the 1973-built property, upgrading the roof, adding new electrical systems and overhauling the property’s parking.
After renovations wrapped up, retailer TJ Maxx signed a 205,306-square-foot lease, bringing the asset to 92 percent occupancy. The property at 7600 Assateague Drive has clear heights between 30 and 32 feet and 139 dock-high loading doors.
3. Elion Logistics Park 55 – 29901 S. Graaskamp Blvd.
While the bulk of industrial investment volume this year has been concentrated within either coastal or high-growth Sun Belt markets, Chicago’s importance as a major transportation and logistics hub continues to attract capital—and Transwestern’s $130 million disposition of three buildings within Elion Logistics Park 55 in Wilmington, Ill., marks the largest Midwestern deal so far this year. Silver Creek Development purchased the asset, with $80 million in financing from Pacific Life Insurance.
The structures at 29901 S. Graaskamp Blvd., some 50 miles southwest of downtown Chicago, are fully leased to Michelin. The 2 million-square-foot facility, built in 2015, has 70 loading docks and 220-foot truck courts and is part of a larger, 30 million-square-foot planned industrial campus.
2. 951 Willowbrook Road
This year’s second-largest industrial deal through May was CenterPoint Properties’ $201.5 million acquisition of the 1 million-square-foot 951 Willowbrook Road in Allentown, Pa. Rockefeller Group traded the asset in April, shortly after the building opened its doors at the start of the year. JLL represented the seller in the deal.
Construction began on the 69.6-acre site in late 2018, with TD Bank providing $64.2 million in project financing. The structure has 40-foot clear heights, 149 loading doors in a cross-dock configuration and parking for 166 trailers. Logistics firm GEODIS signed a long-term, full-building lease prior to delivery.
The largest single-property industrial deal through May was Rockefeller Group’s $247 million sale of 10Edison, an Amazon distribution center in Edison, N.J., to Property Reserve. The January deal closed shortly after construction work on the 900,022-square-foot facility wrapped up the month before. JPMorgan Chase had financed the project with a $76.6 million loan.
Located on the site of a former ExxonMobil research center at 2205 State Route 27, the property features 40-foot clear heights, 158 dock-high loading doors and ESFR sprinkler systems. The development began in 2019 as a speculative project, with Amazon signing for the facility in late 2020.