Mark Cafferty Cafferty: “We know that when a company choses San Diego, they do so because we have highly-skilled manufacturing talent and a unique competitive advantage when it comes to our proximity to Mexico. That is something other regions cannot claim.”

SAN DIEGO—San Diego, along with the rest of the country, celebrated Manufacturing Day on Oct. 7. The event, which takes place on the first Friday in October, is one opportunity for the region to shine the spotlight on the increasingly important industrial real estate sector, San Diego Regional EDC president and CEO Mark Cafferty tells GlobeSt.com. We spoke with Cafferty about how the event affects industrial real estate in this region.

GlobeSt.com: What impact does Manufacturing Day have on industrial real estate in San Diego?

Cafferty: Now in its fourth year, San Diego Manufacturing Day is organized in conjunction with MFG Day, a national program that celebrates American manufacturing and addresses common misperceptions about the industry. Home to more than 3,000 companies, San Diego's manufacturing industry employs 108,000 people across the region.

Currently, there are 4,889 buildings with more than 84 million square feet of industrial and manufacturing space available in San Diego. With continual development occurring, there is 157,444 square feet under construction. With San Diego's strong concentration of genomics and biotech companies, manufacturing takes place in R&D and lab space across San Diego as well. When factoring in this space, available real estate increases to 7,802 buildings with more than 161 million square feet of available space, and 337,904 square feet under construction.

Driving job growth, business expansion and investment and overall economic development, the manufacturing industry is an important part of EDC's—and other regional peers'—work. MFG Day is one opportunity for us to shine the spotlight on this sector.

GlobeSt.com: What is the biggest challenge facing the manufacturing sector of real estate in this market?

Cafferty: While challenges vary by company, industry-wide issues include cost of real estate in California when compared to other regions, cost of energy and water and the regulatory environment. These are very real challenges; however, San Diego remains one of the most competitive California regions for advanced manufacturers.

We know that when a company choses San Diego, they do so because we have highly-skilled manufacturing talent and a unique competitive advantage when it comes to our proximity to Mexico. That is something other regions cannot claim.

GlobeSt.com: Are there emerging growth hubs for manufacturing in San Diego?

Cafferty: San Diego's manufacturing growth areas are non-traditional, and driven by an innovation and cross-border economy. We see high growth occurring in three main sectors: life sciences, sports and active lifestyle and craft brewing.

In life sciences, the region bodes significant growth potential in the fields of genomics and medical-device manufacturing, with companies like Illumina, Thermo Fisher Scientific and BD expanding operations in San Diego and Northern Baja.

Encompassing both R&D and manufacturing, San Diego's sports-and-active-lifestyle industry will continue to be a key driver and unique part of the region's manufacturing base. Driven by San Diego's penchant for an active, outdoor lifestyle—with companies ranging from major surfboard shapers to top golf-equipment manufacturers—sports innovation shows promise in the region.

Another driving force in the region: craft brewing. Home to nearly 150 breweries, San Diego's craft-brewing industry continues to grow, spurring the attention and investment of beer lovers around the world. As we've recently seen with Ballast Point's acquisition by Constellation Brands and Stone Brewing Co.'s expansion into Germany, local breweries are expanding their global reach while continuing to invest in manufacturing right here in San Diego.

GlobeSt.com: What else should our readers know about Manufacturing Day?

Cafferty: Manufacturing Day is a platform for regions across the country to not only promote their manufacturing strengths, but to educate and inspire the future manufacturing workforce. Companies open their doors to the public to showcase locally made products and innovations, instilling a sense of pride and connectivity between community and business.

American manufacturing has changed since the mid-1900s. It is a sophisticated industry full of well-paid engineers, shipbuilders, scientists and more. In San Diego, manufacturing employees earn an average of $97,793 annually. It has become increasingly important to create a well-trained talent pipeline to ensure the growth of the industry, which impacts real estate, life sciences, defense and many other industries critical to San Diego's economic vitality.

From San Diego City College's CATC Program to Solar Turbines' inclusive internship program, local schools, companies and organizations continue to educate and encourage the growth of the region's manufacturing industry, staying true to San Diego's collaborative culture.

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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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.