The trend of owner-occupiers purchasing industrial properties has gained significant traction, with many opting to buy rather than lease their facilities. This movement has reshaped the landscape of the industrial real estate market.

Record Sales Growth in 2024

According to a recent report from CBRE, there were a notable 2,504 industrial sales made by owner-occupiers in 2024. This figure marks a substantial increase of 32% from the previous year’s total of 1,895 transactions involving facilities exceeding 10,000 square feet.

Impact on Property Values

The increasing preference for ownership among occupiers is contributing to rising industrial property values. The average selling price of an industrial property saw a 5% increase, reaching approximately $152.42 per square foot over the last year.

Drivers Behind the Trend

CBRE identifies several long-term advantages that drive this shift to ownership, including:

• Tax deductions associated with property ownership.
• The ability to make renovations or customize the space to fit specific operational needs.
• Using the property as a long-term investment strategy.

Owner-Occupiers Prefer Older Assets

A fascinating aspect of this trend is that owner-occupiers are often choosing older industrial properties. More than 75% of acquisitions in the previous year involved buildings constructed before 2000, with nearly half of these built prior to 1980. In contrast, investors are increasingly shying away from older assets, favoring newer developments.

Market Highlights

Chicago emerged as the leading market for owner-occupier sales, recording 188 transactions in 2024. Houston followed with 143 transactions, and Los Angeles secured the third spot with 123 sales.

Significant purchases include United Therapeutics’ acquisition of a 96,000-square-foot industrial space in Durham, North Carolina, for $33 million, facilitated by CBRE. Additionally, a 31,000-square-foot flex/industrial building in North Andover, Massachusetts, was sold to a privately held owner-occupier earlier this year by Marcus & Millichap.