Not surprisingly, high-quality industrial sites are attracting the most amount of attention. Timothy Gunter, CEO and president of IDI, says his company is pursuing purchases and "will be willing to pay up for quality."His company is also divesting of a number of properties in which Gunter jokingly says he'd "love to find a way to buy our products." The company is not, however, selling at a loss. He says those kinds of transactions don't make sense for anyone.

Greg Thurman, president of Panattoni, agrees. His company is focused on value acquisitions and it's finding there is actually product out there to be purchased. For example, Panattoni will close in the next several days on a broken industrial property in the Northeast. But finding a good deal is more of a challenge than ever before. Thurman says he might look though 50 deals before finding one of interest.

Thurman says his company is looking at some vacant industrial buildings, but Panattoni seems to be the only company at this point interested in property lacking in tenants. The other panelists say they shy away from a property that needs to be leased after purchase.

"It's been really tough for Prologis," Ted Antenucci, president and CEO of the company says. "We grew at a rapid pace and paid the price. We're not at an offensive place now but hope to be soon. We're not at a position to buy vacant buildings now."

The toughest thing right now for industrial-focused companies like Panattoni or ProLogis is the vast amount of developable land sitting on the books. Thurman says his company has tried to sell some plots of land but there aren't buyers in the market right now. "We'd love to sell it, we'd damn near give it away," he says.

Antenucci admits that his company is sitting on some 2.5 billion square feet of land and the company has spent a significant amount of time trying to crunch the numbers on the balance sheet to make this work. "It's a huge issue," he says. The large tracks of land has forced ProLogis to think creatively to optimize the land. The company is attempting some build-to-suits to get the land off the balance sheet.

Instant Insights /

Industrial Market Recovers, Land a Burden

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