HIGH DESERT – Southern California’s shortage of available warehouse space, as well as other factors, has caused companies to rethink how and where warehouse sites are chosen. According to logistics expert Jon DeCesare, CEO of World Class Logistics Consulting, future warehouse facilities are likely headed for the High Desert including Apple Valley, Victorville, Hesperia, Adelanto, Barstow and Phelan.
During the Society of Industrial and Office Realtors industry dinner, DeCesare talked about factors that have caused the supply-chain disruption including the pandemic lockdown, increased demand from e-commerce sales and port congestion.
“We don’t see the tide turn in 2022 – infrastructure problems, labor constraints, high demand and reduced capacity will continue to trouble the market,” said DB Schenker Chief Operating Officer for ocean and air freight Thorsten Meincke. “Stakeholders in the industry don’t see much relief coming for shippers anytime soon. It will not get better and 2023 will be worse.”
DeCesare mentioned four opportunity areas in Southern California where the next building booms may occur – the High Desert, Antelope Valley, Tejon Ranch and I-10 corridor east of Banning to Indio.
Newmark Research reports that industrial space in the Inland Empire is currently non-existent as pre-leasing has become the norm for industrial tenants. With little space to choose from, tenants are locking in deals for properties before they come to market. This tight market has pushed rents up to the highest rates the region has ever seen.
Industrial developers are also noticing the surge in demand – around 33.3 million square feet of industrial real estate is under construction across the Inland Empire.
According to the report, developers are moving further inland to “areas once deemed tertiary,” including Victorville, as more cities become hesitant to add industrial properties.
To read the full Newmark report click here.