One Blockbuster Deal Pushes Up Industrial's Average Sales Price

Both the number of industrial property transactions and their total sales volume slipped in the U.S. in the first quarter of this year. However, a single enormous deal for California property owned by Genentech pushed the average sale price up 22% from the previous quarter, according to CommercialEdge’s April 2024 national industrial report.

In total, the U.S. recorded sales volume of $9.97 billion for industrial property, with an average sales price of $147 per SF. However, the average would have been $130 per SF had it not been for the acquisition of Genentech’s manufacturing facility in Vacaville from Roche for $1.2 billion in cash by Swiss company Lonza. That sale was for $2,810 per SF, CommercialEdge stated.

At 427,000 SF, the Vacaville site in California’s Bay Area is one of the largest biologics manufacturing facilities in the world by volume. It has a total bioreactor capacity of around 330,000 liters. Lonza said the acquisition will increase its large-scale biologics manufacturing capacity for mammalian therapies and expand its network of facilities in the U.S. Lonza also plans to invest CHF 500 million ($550 million) to upgrade the facility.

“We expect biotechnology and biomanufacturing to continue to be an in-demand sector in the Bay Area,” CommercialEdge commented.

The Vacaville deal helped push 1Q 2024 industrial sales in the Bay Area to $1.6 billion, with a sales price of $777 per SF. That total was double second-place finisher Dallas-Fort Worth’s haul of $831 million at $145 per SF. Other metros with sales exceeding $500 million were Chicago ($585 million), Los Angeles ($545 million) and New Jersey ($520 million).

Meanwhile, 406 million SF of industrial space is under construction nationally – a drop of two-thirds compared to the same period in 2023, the report said.