MANUFACTURING VERSUS DISTRIBUTION - IMPLICIT PRICING OF REAL-PROPERTYCHARACTERISTICS BY SUBMARKET

This article develops and tests the idea that the industrial real esta te market is an aggregate market consisting of at least two submarkets -manufacturing and distribution. While there is no observable differen ce in implicit pricing of most industrial property characteristics acr oss these two submarkets, some property-characteristic implicit prices do differ. Therefore, manufacturing and distribution submarket proper ty-pricing functions are best estimated in aggregate, while making all owances for variability of coefficients on some property characteristi cs. For this sample of 331 industrial property sales from the southeas tern region of the United States, the two submarkets vary with regard to implicit pricing of building volume, below-average building conditi on, site area, and dock-high doors.