Los Angeles Leads in Industrial Sales So Far This Year
But that is largely due to CenterPoint spending $196.5 million acquiring four properties in South Los Angeles.
Los Angeles has shown, by far, the highest dollar volumes of industrial transactions early this year, according to data from Yardi Matrix. As of February 29, the metro area had $435 million in sales.
“Nearly half of that volume is due to CenterPoint spending $196.5 million acquiring four properties in the South Los Angeles submarket,” the report said. “The submarket is supply constrained and offers access to the ports as well as transportation networks. Investor appetite remains strong for Los Angeles properties, but price gains have plateaued following a period of rapid gain.”
The price per square foot so far in 2024 has been $320. That compares to the national average of $132 and is even more than the trend in the area. Average sales prices grew 44.7% between 2019 and 2021. That was a lift from $190 per square foot to $294, which set a high base. Since then, however, the average sale price grew only 8.9% to reach that $320 figure.
To show the Los Angeles activity in a larger context, Chicago, the number two market, had sales of $373 million, or 85.7% of the number one spot. But the Chicago price per square foot was $97, so by square footage, Chicago made a better show.
The Bay Area came in third with $321 million in sales at a $274 per square foot rate. Then was Dallas with $318 million total and $165 per square foot; Phoenix at $298 million and $168 per square foot; Denver’s $240 million and $123 per square foot; $220 million in Houston at $124 per square foot; Seattle with $176 million and $256 per square foot; New Jersey’s $171 million and $249 per square foot; and Atlanta, $168 million, $118 per square foot.
Something interesting in the data is while quarterly transactions have since the end of 2021, price per square foot has continued to rise. One might think that fewer transactions meant less demand, which should have depressed prices. However, Yardi has an explanation: “The average sale price of an industrial property so far this quarter is up 9.6.% over the last quarter and 2.0% year over-year. Increased interest rates, tightened capital markets and normalizing demand have not created discounts in the market for industrial properties.”