Sales of industrial buildings in Chester County have
reached levels that haven’t been seen since before the recession.
Demand for these structures, which can range from
warehouse, flex and distribution, is being driven by a combination of low
interest rates enabling companies to buy buildings cheaper than renting them
and economic deals on the properties. Prices for industrial and flex buildings
stood at $100 to $120 a square foot before 2008 but are now trading for $65 to
$70 a square foot, said Bill Wilson of Lieberman Earley & Co., a commercial
real estate brokerage and development firm.
Those factors have meant one thing: “It makes more sense
for these owners to buy for their companies,” Wilson said.
Firms that buy get added tax benefits from owning and the
potential that their properties may increase in value in the future.
It doesn't work for everyone and seldom does a dynamic
such as this emerge when it makes more sense for a tenant to buy rather than
rent a property. The numbers do show that sales have increased. During the
first half of this year, $23 million in sales of flex-warehouse properties took
place, Wilson said. That’s up from $7 million last year and $1.4 million in
2012.
A majority of those transactions were made by firms
buying for themselves. Some properties bought by companies for their own use
include:
424 Creamery Way, a 27,000-square-foot building in Exton,
Pa., bought by Liberty Tools.
264 Welsh Pool Road, a 10,600-square-foot building in
Exton, bought by Taylor Products.
757 Springdale Blvd., a 24,300-square-foot building in
Exton, acquired by Brian’s House.
200 Philips Road, a 7,150-square-foot building in Exton
bought by Bala Builders.
The trend to buying has meant some of the better
properties have been scooped up leaving some of the less desirable ones to
linger on the market, said Phil Earley, who is also with Lieberman Earley. Some
of these buildings have even been challenging to lease for a range of reasons
including not having the right office-to-warehouse ratio or the configuration
of the building just doesn’t work for a firm’s operations.
Next up? Build to suits.
“We’re just starting to see those come back,” Earley
said.
Source: Philadelphia
Business Journal
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