Sam Zell is making a huge play in the industrial real estate game

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As demand and deliveries in industrial real estate continue to grow, we can expect more players to join the table. However, a seasoned investor is looking to jump into the industrial sector headfirst by taking a huge step towards a well-established East Coast company.

According to at Crain’s business in Chicago, billionaire Sam Zell is investing more than $3.4 billion to acquire New Jersey-based Monmouth Real Estate Investment Corporation. Crain’s reports that the company currently owns and manages 24.5 million square feet of space across 120 different assets.

The move is a change for Zell, whose Equity Commonwealth has primarily operated in owning and managing office space. Crain’s notes that Zell and his company have been liquidating desktop assets over the past few years and amassing a pile of cash from those deals.

The timing of the news comes as the nation is well over a year since the start of the pandemic and the major societal changes that have come with it. Office markets in many major cities have been weak over the past year, but the industry has picked up. Demand from e-commerce companies, logistics groups and data centers has seen a significant increase since the start of the pandemic.

In the Chicago area, demand, rental prices and deliveries have continued to increase over the past year. A wave of bespoke developments have been built in the suburbs as retailers seek more space for inventory and transportation. Meanwhile, demand for specific facilities has exceeded supply.

Could Zell’s switch to manufacturing indicate more interest from deep-pocketed business leaders? If current real estate trends continue as they have over the past year, it wouldn’t be too surprising.

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