An Analysis of the Determinants of Industrial Property Valuation

Abstract

Recent research investigated the relationship between physical factors and the asking price of industrial buildings. We extend prior research by including physical, locational, financial and economic variables to determine the factors that influence the sales price. This research provides an initial valuation framework for appraisers and is a first step toward the development of an industrial property index. Eleven variables— building size, office space, dock doors, ceiling height, age, distance to the Dallas/Fort Worth Airport, county of sale, industrial cap rate, prime rate, tenant type, and date of sale—are found to explain the sales price of industrial property.