5 Industrial Properties You Can Buy for Less Than $10 Million

Despite rising inflation and interest rates this year, many key indicators for the industrial market such as absorption and rental rates have continued to rise throughout 2022.

There are several newer industrial buildings available at relatively attainable prices in some of the nation’s most sought-after markets. Here is a sample of those properties currently listed for sale on LoopNet for under $10 million.

Rent growth in the markets below all surpasses the national forecast of 8.2% in 2022-23, according to data from CoStar, the publisher of LoopNet.

Here are some of the industrial buildings available on LoopNet that are asking less than $10 million today:

California’s Central Valley is one of the top emerging industrial markets in the country, with the entire West Coast less than a day’s drive away. This 35,000-square-foot speculative warehouse built last year is about two hours from downtown San Francisco, and adjacent to the Merced Regional Airport. The grocery chain Safeway leases a portion of the building, month-to-month, at $7.32 per square foot, a rate that a new owner could raise with new tenants, said Jacob Twining of Matthews Real Estate Investment Services, which is handling the sale.

An owner-occupant could also occupy the entire building. The property would currently deliver a 7.08% capitalization rate to an investor at its $5 million asking price ($141 per square foot). That beats the average 5.7% cap rate reported through 22 industrial sales in the last 12 months in Merced.

The Buckeye state’s capital is centrally located, has a growing consumer base and ranks third in the nation in 12-month industrial rent growth at 18%, more than double the national average, according to CoStar research. All of these indicators favor this nearly 38,000-square-foot facility built in 2017 in Columbus.

The property is currently leased to flooring company America’s Floor Source, which also operates a showroom in the building. The challenge for a new buyer is that America’s Floor Source is vacating the property by the first quarter of 2024, and the building’s showroom lends itself more to a similar future use instead of a traditional logistics tenant. But the current tenant’s planned move also presents an opportunity for a new owner to raise rents with a new tenant, said listing agent Doug Tenenbaum of HER Commercial Real Estate.

“I think a lot of landlords are waiting for their leases to burn off so they can dramatically increase their rents,” he said.

With proximity to the ports of southern California, the growing Phoenix metropolitan area and its booming population, Las Vegas is one of the top emerging industrial hubs in the country.

This 34,000-square-foot gray spec-heavy industrial building is situated across from the Las Vegas Motor Speedway and located less than one mile from Las Vegas Boulevard. The building is expected to be completed in the third quarter of this year, according to the listing.

The Las Vegas industrial market is reporting strong fundamentals, including 14% rent growth over the past 12 months, and a record-low 1.7% vacancy rate, driven by 9.2 million square feet of absorption in the past year, according to CoStar research.

This 36,000-square-foot flex industrial building was built in 2015 and is triple-net leased to a publicly traded manufacturer for more than 10 years. The base rent is $448,000 per year with 3% annual increases, according to the offering memorandum. A sale at its current asking price would result in about a 5% cap rate.

Tampa is one of the fastest growing industrial markets in the country, with 16.5% rent growth in the past 12 months, resulting in a current average rent of $10.06 per square foot. There are more than 8 million square feet of industrial space in the construction pipeline and a 3.5% vacancy rate, according to the latest CoStar research.

Rapid population growth and major corporate relocations have driven historic industrial growth in the Lone Star State’s capital. This 13,700-square-foot flex warehouse was built in 2018 on Interstate 35 just outside Austin city limits.

The existing tenant is a drilling supply company, and the building comes equipped with two five-ton cranes, a hydraulic breaker pit and a soundproofed executive office and conference room.

Austin is one of the strongest emerging industrial markets in the country, with an average rent of $13.35 per square foot and 10.8% 12-month rent growth, according to CoStar research. The overall vacancy rate is 4%, with absorption ranking 11th in the country at nearly 12.3 million square feet of space in the past 12 months.