Industrial buildings have long been a staple for Detroit construction. Large patches of land throughout pockets of the metro create an ideal environment for big industrial buildings.
See CoStar COMPS #4116987 and #1608325.
Sales for these buildings are continuing at a fast pace with almost 600 transactions year-to-date. Most noteworthy is the transacting sale price for many of these properties. The largest sale over the past 12 months was for nearly $47 million, or about $181 per square foot, for a 260,150 square-foot warehouse in Warren. This is the largest trade in the metro apart from a $90 million sale in 2007.
See CoStar COMPS #3974838.
Several additional properties sold for similarly high prices highlighting a renewed confidence in the industrial market. The majority of recent trades transacted for significantly more than what the metro is accustomed to seeing. On average, the price per square foot in Detroit is around $50. In one of the largest sales by price per square foot, Ontario based GFL Environmental bought a 10,000-square-foot warehouse in Lapeer for $3.5 million.
Trades for industrial space are predominantly in the lower half of the Detroit metro where access to trade routes are easily accessible. More specifically, these sales were largely concentrated in Canton and Auburn Hills, both neighborhoods known for their expansive inventory of industrial space. Interestingly, Auburn Hills was the former home of the Detroit Pistons, which have since relocated to the Downtown submarket.
See CoStar COMPS #3939482.
Thus far, trends in multifamily and office have garnered the most attention in Detroit. However, it is worth noting trends in the industrial sector are just as active. Similar to investment-add trades in multifamily, some industrial properties are being purchased and pumped with renovations to create a better space. ABB, Inc. purchased a 542,800-square-foot manufacturing building in Auburn Hills for $37 million, which they plan on pumping an additional $9 million into to house a new training center. Industrial activity is facilitating growth throughout the metro aside from the major changes taking place downtown and midtown.