Kurt Strasmann is a executive managing director at CBRE.

Industrial investment activity is on track to set new records this year in Southern California. Through August of this year, industrial investment is up 5.5% in the Los Angeles, Orange County and Inland Empire region, according to research from CBRE. In total, investment is $7.4 billion so far this year, with e-commerce, last mile and cold storage the favored asset types in the sector. Industrial investment has continued to increase each year, and experts say that it isn't surprising capital demand continues to grow.

"Industrial assets have outperformed all other asset classes.  Investors have taken note and increased their allocations to the Industrial sector," Kurt Strasmann, executive managing director at CBRE, tells GlobeSt.com. "Secondly there has been an exceptionally increase in very large portfolios/entity type acquisitions in 2019. Lastly the outlook on the basic fundamentals for Industrial continues to excel. We don't see this changing anytime soon. These factors along with a few others position industrial product as the favorite among investors heading into 2020."

While investment activity is growing, the drivers are the same. Strong returns and tenacious demand for limited product is creating a voracious appetite for industrial deals. "First, superior returns and rental rate appreciation is driving demand. Second, in most markets demand continues to outpace supply, and third, development is not getting any easier so in the infill markets especially there are significant barriers to entry that limits new construction or an over-supply situation," says Strasmann about the drivers of the activity.