A red-hot industrial market is pushing some developers to do the unthinkable—replace office buildings with warehouses.
Up until now, that’s the opposite of what would have happened, but the rise of e-commerce is incentivizing developers to tear down offices in soft markets and reposition them as warehouses, the Wall Street Journal reports. This is especially true in parts of New Jersey and Long Island, where some older office complexes are losing tenants but boast proximity to NYC, ports and highways.
And prices for industrial space are soaring—the average sale price on Long Island is $96.80/SF, up from $62.50/SF three years ago while New Jersey warehouses sell for an average of $74.84/SF compared to $63.78/SF back in 2013. [WSJ]
