Inland Empire Leads US Industrial Recovery

ONTARIO, CA-NAIOP Inland Empire’s 2013 Mid-Year Market Review held in Ontario, Calif. offered an in-depth look at the macro and microeconomic indicators defining industrial real estate activities in the region and across the US. The consensus—the Inland Empire is leading the country in industrial development and is the first submarket recovering from the economic downtown. Keynote speaker Gene F. Reilly, Prologis CEO of the Americas, highlighted the region’s dominance as a distribution hub for retailers and manufacturers. He also addressed the important role the area is playing to revive the industrial market. “We remain bullish about the Inland Empire as one of the earliest submarkets in the US to recover from the economic downtown three years ago,” said Reilly, whose company recently completed an 800,000-square-foot distribution center in Redlands. Following the keynote, a panel of local experts that included CBRE vice chairman Darla Longo, Lee & Associates EVP Bill Heim, Jones Lang LaSalle executive vice president Michael McCrary, and CBRE SVP Phil Woodford, highlighted the region’s strong position as the gateway to the country’s goods movement. “Companies have to be in the Inland Empire. We are the gateway location to Asia and with the intermodal yard in San Bernardino we are also the gateway for westbound product,” said McCrary. Approximately 43% of all imported cargo enters the US through the ports of Los Angeles and Long Beach, and 75% of those goods are handled in the Inland Empire before being shipped to their final destinations. Each year the BNSF Intermodal Container Facility in San Bernardino, one of the most modern hubs in the industry, handles a half-million transfers of international and domestic cargo from China and the Pacific Rim. Becoming a key player in the country’s goods movement, the Inland Empire is now home to roughly 400 million square feet of warehouse and distribution property. Another 16 million square feet of speculative warehouse property is currently being built. Compared to other industrial hotspots, according to panelists, there is more industrial construction activity taking place in the inland region than anywhere else, and three times as many industrial projects planned for the market.