Industrial developers across southern California markets (and most of the U.S.) continue to build new warehouses/industrial property. Companies are quick to occupy quality space that becomes available, even at new high-water marks for pricing. When you look at the economy in general, it is continuing its robust upward trend, even with trade-war talks. The unemployment rate continues to decline as millions have been added to the labor force, especially in the private sector. The stock market has climbed significantly over the past 3-4 years. Interest rates for those seeking to borrow money have persisted relatively low.. With even more reductions of late, capital is easier to obtain for business growth and expansion. There is also a renewed push to bring manufacturing back into the United States.
With all these economic indicators moving in a positive direction for business, why is there still skepticism about the industrial real estate market and the economy in general? Some people feel that we are “due for a correction” because of the run we have been on. Others are wondering how the 2020 election and political culture will turn out, creating some uncertainty. Furthermore, some question the long-term implications of tariffs and trade war talks. However, those “feelings” or concerns are not necessarily making their case by the numbers, at least not yet.
What's on The Horizon
We have now moved past that summertime slowdown and in Q4 2019 and Q1 2020 companies and investors will again be looking at expanding their businesses and real estate holdings. What is on the horizon for your business, and what real estate decisions are you facing? Has the growth in your business brought about the need for more space or a 2nd location? Or, are you looking to place your accumulated capital to work by acquiring industrial property for your business or as an investment? Do you currently own real estate and are considering leasing or selling your property, and you want to make sure you are getting the best price?
Whatever the scenario, our team can assist in evaluating your needs and options to help you make wise choices in a dynamic marketplace. Contact us today to discuss the choices and decisions you are facing.
Christopher J. Destino, SIOR, a Principal at Lee & Associates, is an engaging, responsive professional who enjoys working closely with his clients and helping them succeed.