San Diego Industrial Investment Sees Record Pricing

The San Diego industrial market is seeing record demand and pricing for quality assets, despite the market uncertainty triggered by the pandemic. The Cushman & Wakefield Southern California industrial investment—which includes Jeff Cole, Jeff Chiate, Bryce Aberg, Ed Hernandez, Mike Adey and Zach Harman—have closed a number of deals since the onset of the pandemic, illustrating the recent sales activity and the continued capital demand for industrial assets.

“Our investment team based in Southern California has arranged the sales of several high quality industrial properties within the past year—and during the pandemic—across Southern California and the Western region,” Jeff Cole, vice chairman of capital markets, tells GlobeSt.com. “We continue to see the buyer pool for industrial property continue to grow. Demand continues to compress cap rates and propel record sale prices.”

Cole outlines the top deals closed by the team, most of which are class-A buildings with strong occupancy by ecommerce tenants. “The properties include a 85,824-square-foot, fully leased industrial asset in central San Diego in late September; a 213,818-square-foot newly constructed class-A industrial building in Las Vegas that is fully-leased to a national ecommerce company in October; a 152,000-square-foot industrial building in Los Angeles County earlier this year; three industrial buildings that are fully leased to a major ecommerce/tech company in Phoenix, Inland Empire, and Salt Lake City during 2Q and 3Q; 56 acres of industrial zoned land in the Inland Empire East market in March;  a brand new 226,691-square-foot class-A, multi-tenant industrial distribution facility in north San Diego in December of 2019; and most recently a 27,510-square-foot, fully leased industrial building in north San Diego in October,” says Cole.

In addition to deals that have closed, the team has several buildings currently in escrow, and the strong demand has encouraged owners to bring assets to market. “Our Team also currently has six buildings that are leased to a major ecommerce/tech tenant that are in escrow,” says Cole. “We were also recently hired to bring to market for sale San Diego’s largest iconic industrial building, a 601,417-square-foot facility representing a critical mass of Class A industrial real estate in southern San Diego which is seeing extraordinary buyer interest.”

It isn’t only ecommerce properties that are in demand. The team has also noted demand for assets in the 100,000-square-foot range. “Of note, our colleagues at Cushman & Wakefield have also sold several other single- and multi-tenant high quality/class-A industrial assets in northern San Diego of over 100,000 square feet this year, most of which were either fully or largely leased,” says Cole.