Otay has become the new hotspot for industrial development in San Diego—and considering the location, it isn't surprising. Thanks to a combination of ecommerce demand—which every major market in the country has experienced—and demand from the border crossing, the industrial market is dynamic. A new border crossing, currently under construction with estimated delivery in 2021, will likely increase demand. As a result, the market is poised for additional growth.
“We have a very vibrant border crossing that has historically been a very active point of entry,” Jeff Givens, EVP at Kearny Real Estate, tells GlobeSt.com. “It is the second busiest port outside of Laredo, Texas. The cross-border industry is viable, and it makes up a lot of the Otay industrial base today and will continue to be that going forward.”
Kearny is developing a 311-acre industrial site with 140 build-to-suit and for-sale industrial lots. The land site is one example of what is possible in Otay and how the market is rapidly changing. “Users are having to go to other parts of the county to buy or lease a building,” says Givens. “Over the next 10 years, we think that is going spur a lot of growth in Otay. It is really the largest remaining market in San Diego County where you can build industrial product.”
While Otay has become the hotspot in San Diego, the market in general has seen a surge of demand. With limited supply and land available, many users are being forced into less desirable areas. “Where we see increased demand in San Diego that hasn't been the historically is from the ecommerce market,” says Givens. “Like L.A. and Orange County, the industrial vacancy countywide is less than 5%, and there is very little land to build. It is very challenging for those types of users to find buildings that they can occupy because the vacancy is so low and it is hard to find land for development.”
The new border crossing will be open in 2020 to 2021, and it will have a major impact on the Otay market as well as greater San Diego. “That will be a major center that will be co-operated by Mexico and the United States,” Givens explains. “This is a work in progress, but it is a confluence of a large piece of land in a strategically located area where a lot of different things are coming together from an infrastructure standpoint. We hope to benefit on that going forward.”
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Kelsi Maree Borland
