Ecommerce Boom Helps High Desert Survive the Pandemic

“Industrial transactions are the main driver of activity in the high desert,” according to Soua Vang of San Bernardino County. During the pandemic, the boom in ecommerce has kept activity moving in the region with a total of 6.7 million square feet of industrial absorption, the second highest on record since 2010.

“At 6.7 million square feet, it was just shy of the all-time high of the 6.8 million square feet recorded in Q4 2018. The warehouse is now so much more than a location for storing product as information technology and automation are increasing its role in managing inventory,” Vang, interim economic development director at San Bernardino County, tells GlobeSt.com.

There is a perfect storm of factors driving activity in the market. First and foremost is availability of land for new development, but labor and affordability have also played a key role in the market’s growth. “Labor, location and affordability have increased interest in the High Desert,” says Vang. “Housing costs are affordable. As young families look to invest out in the High Desert it creates a substantial workforce. There are 450,000 people in the region and approximately 60,000 or so people drive down the hill for work each day. It is estimated that about 35,000 of those are engaged in the warehouse and distribution industry. Most of them would rather work close to home, so there is a pent-up workforce supply in the immediate region. When a business locates to the High Desert, there is a line around the block of job applicants.”

The High Desert Training Center in Victorville and the Victor Valley College supports job training in the area. According to Vang, these facilities offer hands-on training programs related to jobs that are in high demand in the market. This includes apprenticeships for electronic technicians and industrial mechanics.

Location also plays a vital role in the market’s attractiveness to industrial investors. According to Vang, Highway 40 and Highway 15 carry almost two-thirds of the amount of goods moving West to East across the country. “High Desert cities have a competitive advantage as it pertains to outbound transportation freight,” she says. “It’s why BNSF Railway expanded its Barstow facility adding an intermodal yard to further increase its Inland Empire operational footprint and unlock critical capacity in Southern California which supports the region’s growing intermodal demand. This infrastructure is valuable to the e-commerce industry especially when you consider that transportation is almost 50 percent of the industry’s operational costs.”