As demand and deliveries in industrial real estate continue to grow, it could be expected that more players will join the table. However, one veteran investor is looking to jump head first into the industrial sector by making a huge move on a well established east coast company.
According to Crain’s Chicago Business, billionaire Sam Zell is putting down upwards of $3.4 billion to acquire the New Jersey based Monmouth Real Estate Investment Corporation. Crain’s reports that the company currently owns and manages 24.5 million square feet of space over 120 different assets.
The move is a shift for Zell, whose Equity Commonwealth has mostly operated in owning and managing office space. Crain’s notes that Zell and company have been liquidating office assets over the last several years and piling up a stack of cash from those deals.
The timing of the news comes as the nation has well surpassed a year since the beginning of the pandemic and major societal shifts that have come from it. Office markets throughout many major cities have been soft in the last year, but industrial has been pushing ahead. Demand from ecommerce companies, logistics groups and and data centers have witnessed significant upticks since the start of the pandemic.
Within the Chicago area, demand, rent prices, and deliveries continued to climb in the last year. A wave of build-to-suit developments have been constructed in the suburbs as retailers seek more space for inventory and transportation. Meanwhile, demand for spec facilities has outpaced supply.
Could Zell’s move into industrial indicate more interest from deep pocketed business leaders? If current real estate trends continue as they have over the last year, it wouldn’t be too surprising.
