Industrial space is high on the wish list of investors today. And industrial space that is fully leased to one user? That’s especially popular.
Avison Young reported that investors spent $2.03 billion on 187 single-user industrial propertes in the first quarter of 2018.
Many of these single-user transactions fall into the sale-leaseback category. That’s where companies monetize the asset while staying on as a tenant to lease the facility.
“Many corporations are realizing the tremendous benefits of sale leasebacks, which allow companies to generate capital for business expansion and general expenses,” said Erik Foster, principal with Avison Young and leader of the company’s industrial capital markets group. “These types of single-user sales are particularly attractive to investors, as they provide long-term stability through the triple-net-lease structure.”
Chicago had a good quarter for single-user industrial sales. The city ranked fourth in the first quarter, with $147 million of these sales. New York, not surprisingly, ranked first during the quarter with $264 million in single-user industrial sales.
Los Angeles ranked second with $200 million in sales, while San Francisco notched $166 million.
Midwest-based businesses closed some of the bigger single-user sales during the past 24 months ending in the first quarter of this year. Real Capital Analytics reported that Tribune Media, based in Chicago, sold six properties for $270 million. 3M Company, based in St. Paul, Minnesota, sold three buildings for $205.4 million.
Sears Holdings, based in Hoffman Estates, Illinois, sold 10 buildings for $142.5 million.