SAN DIEGO—While San Diego's strong economy has shown recent signs of slipping, its industrial prospects remain among the brightest in the country, according to a recent report from Ten-X. The report ranks the region as one of the five top markets in the country in which investors should consider buying industrial assets.

“While the whole Western region is benefiting from heightened trade and distribution activity, San Diego stood out, in particular, due to its potential for future growth in rents and NOIs,” Matthew Schreck, quantitative strategist for Ten-X, tells GlobeSt.com. He says his firm expects San Diego industrial vacancies to decline through 2018, which will drive solid rent growth. “We're also predicting a modest pullback in absorption, vacancies and rents amidst our downturn scenario in 2019-2020. During this period, San Diego has a better outlook than Orange County, partly due to the fact that Orange County vacancies are already very tight (2.8% in Orange County as opposed to 6% in San Diego).”

As we recently reported, local investors are looking outside of the San Diego market for higher-risk/higher-return investment opportunities, particularly in high-job-growth markets like Seattle, Austin, Denver and Phoenix, Scott Peterson, senior VP, debt and structured finance, for CBRE Capital Markets, told us. According to a recent report from CBRE Research, prices in the region were up for most property types, despite a slower-than-average half in sales volume and properties sold. Sales volume should rebound, since several major properties went on the market in the first half and are expected to close by year-end.