Industrial Land Prices Compete With Multifamily

Louis Tomaselli

Industrial land prices are reaching historical highs, and are now competing with multifamily land prices in some areas. Land prices have been in fueled by the tremendous demand and industrial rent growth in the last few years, which has led industrial to become one of the most profitable asset classes for development. Now, the market is competing with multifamily pricing. Although zoning restrictions don’t often allow the markets to compete directly, the comparison illustrates strength of the industrial sector.

“Industrial is a great return, and it is so low on the risk profile compared to the other asset classes,” Louis Tomaselli, senior managing director at JLL, tells GlobeSt.com. “If you lease a big box for five years, you don’t have to put that much money into it. If you are leasing the same square footage in multifamily and you are turning leases every year, the cost is much higher than industrial.”