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  • Writer's pictureRealFacts Editorial Team

One Blockbuster Deal Pushes Up Industrial's Average Sales Price


A street in vacaville california

In the first quarter of 2024, the industrial property market in the United States experienced a slight dip in both transaction volume and total sales, but a blockbuster deal in California significantly impacted the average sales price, pushing it up by 22% from the previous quarter.


According to CommercialEdge's April 2024 national industrial report, the U.S. recorded a sales volume of $9.97 billion for industrial properties, with an average sales price of $147 per square foot (SF). However, this average was greatly influenced by a monumental acquisition of a California property owned by Genentech, a subsidiary of Roche.


The acquisition, carried out by Swiss company Lonza, saw Lonza purchase Genentech's manufacturing facility in Vacaville for a staggering $1.2 billion in cash. This sale, at $2,810 per SF, significantly impacted the average sales price. Without this transaction, the average sales price would have been $130 per SF.


The Vacaville site, located in California's Bay Area, spans 427,000 SF and stands as one of the largest biologics manufacturing facilities in the world by volume. It boasts a total bioreactor capacity of approximately 330,000 liters. Lonza's acquisition of this site is strategic, as it will bolster the company's large-scale biologics manufacturing capacity for mammalian therapies and expand its network of facilities in the U.S. Lonza also plans to invest $550 million to upgrade the facility.


CommercialEdge noted that the demand for biotechnology and biomanufacturing in the Bay Area remains strong, underscoring the significance of the Vacaville deal.

The impact of this blockbuster deal extended beyond just the Bay Area. In the first quarter of 2024, industrial sales in the Bay Area soared to $1.6 billion, with a sales price of $777 per SF. This substantial figure doubled the sales of the second-place finisher, Dallas-Fort Worth, which recorded $831 million in sales at $145 per SF. Other metros with significant sales volumes exceeding $500 million included Chicago ($585 million), Los Angeles ($545 million), and New Jersey ($520 million).


Despite the notable transactions, the report also highlighted a significant drop in industrial space under construction nationally. Compared to the same period in 2023, there was a two-thirds decrease, with only 406 million SF of industrial space under construction.

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