LOS ANGELES—Large box speculative industrial projects are becoming more commonplace, compared to two years ago. Large box industrial, specifically defined as industrial facilities that are larger than 1 million square feet, is seeing huge demand right now, giving developers ease that they will be able to fill or sell projects upon completion.
“Today, this is a more acceptable size range for a speculative project than it was two years ago, and that is simply a reaction to the great user demand that we are seeing in the Inland Empire,” Chuck Belden, EVP at Cushman & Wakefield, tells GlobeSt.com. Belden recently closed a pre-sale deal for a 1.3 million-square-foot building, which broke ground two years ago. The developer thought a presale was the best way to monetize the asset, but today, there are more developers waiting until completion to bring the property to market.
Belden says that there are at least two 1-million-plus-square-foot buildings under construction and several others that are in the pipeline in the Inland Empire. “We are going to see five buildings compete in this size range, potentially, in the next four months,” he says. The Inland Empire market isn't the only market that is seeing large box industrial development. Valencia has also seen an uptick in large industrial facilities, which are breaking ground in response to the high demand and dearth of supply. Current projects in these markets include the International Airport Commerce Center, a 1.3 million square foot facility, and Gateway V, also a 1.3-million-square-foot building.
These projects have become especially popular in the Inland Empire and Valencia because of the availability of land for these developments. Even in those markets, however, land is still limited for this size range. “It has proven to be a limited size category because it is difficult to identify sites for development,” says Belden about the Inland Empire specifically. “Part of that is helpful in that the demand of these buildings is so strong that as soon as they get built, they get leased.”
Belden says that the demand for this size range is strong enough that every single 1-million-square-foot building that has been built since the recession has been leased or pre-leased upon completion of construction.
The industrial sector has become the hottest segment in commercial real estate. How will logistics companies keep up with the market forces of omnichannel commerce? When will new supply finally catch up with demand? Who's putting investment capital into industrial and what does the future hold? Join us at RealShare Industrial on November 16 and 17 for answers to these and other questions. Learn more.
LOS ANGELES—Large box speculative industrial projects are becoming more commonplace, compared to two years ago. Large box industrial, specifically defined as industrial facilities that are larger than 1 million square feet, is seeing huge demand right now, giving developers ease that they will be able to fill or sell projects upon completion.
“Today, this is a more acceptable size range for a speculative project than it was two years ago, and that is simply a reaction to the great user demand that we are seeing in the Inland Empire,” Chuck Belden, EVP at Cushman & Wakefield, tells GlobeSt.com. Belden recently closed a pre-sale deal for a 1.3 million-square-foot building, which broke ground two years ago. The developer thought a presale was the best way to monetize the asset, but today, there are more developers waiting until completion to bring the property to market.
Belden says that there are at least two 1-million-plus-square-foot buildings under construction and several others that are in the pipeline in the Inland Empire. “We are going to see five buildings compete in this size range, potentially, in the next four months,” he says. The Inland Empire market isn't the only market that is seeing large box industrial development. Valencia has also seen an uptick in large industrial facilities, which are breaking ground in response to the high demand and dearth of supply. Current projects in these markets include the International Airport Commerce Center, a 1.3 million square foot facility, and Gateway V, also a 1.3-million-square-foot building.
These projects have become especially popular in the Inland Empire and Valencia because of the availability of land for these developments. Even in those markets, however, land is still limited for this size range. “It has proven to be a limited size category because it is difficult to identify sites for development,” says Belden about the Inland Empire specifically. “Part of that is helpful in that the demand of these buildings is so strong that as soon as they get built, they get leased.”
Belden says that the demand for this size range is strong enough that every single 1-million-square-foot building that has been built since the recession has been leased or pre-leased upon completion of construction.
The industrial sector has become the hottest segment in commercial real estate. How will logistics companies keep up with the market forces of omnichannel commerce? When will new supply finally catch up with demand? Who's putting investment capital into industrial and what does the future hold? Join us at RealShare Industrial on November 16 and 17 for answers to these and other questions. Learn more.
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Kelsi Maree Borland
