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Warehouse Construction Surge Lifts Industrial Land Prices
The e-commerce-fueled surge in development of warehouses and distribution centers has generated double-digit, year-over-year percentage increases in prices for industrial land in major U.S. markets, according to a new report from CBRE. The average price for large industrial parcels of 50 to 100 acres – usually earmarked for construction of large, regional warehouses – increased to more than $100,000 per acre from roughly $50,000 a year ago.
Similarly, industrial plots of five to 10 acres – often suited for construction of smaller, infill distribution centers in urban or suburban settings – increased to more than $250,000 per acre this year from roughly $200,000 a year ago.
CBRE’s David Egan notes, “Escalating land prices are a big reason why new supply of U.S. warehouses and distribution centers hasn’t kept pace with strong demand in recent years.”
Double-digit percentage increases in land prices were recorded in major industrial markets, including:
– California’s Inland Empire, up 35% this year to $980,000 per acre
– Northern New Jersey, up 17% to nearly $1.8 million
– Las Vegas, up 17% to $220,000
– Chicago, up 16% to $250,000
– Atlanta, up 14% to $100,000
– Houston, up 14% to $196,000
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