As NIMBY Pushback Grows, So Does SoCal's Warehouse Footprint

Last month, two more cities joined a growing list of Southern California municipalities that have said enough to the largest warehouse sprawl in North America, an industrial footprint that Transwestern—who aims to make it larger—estimates at 2.3B SF.

By unanimous vote, the Norco city council enacted a 45-day moratorium on the construction of new industrial real estate projects involving warehouses. Their vote followed a decision by Pomona officials to extend their warehouse moratorium for another 10-and-a-half months.

These are just the latest in a growing NIMBY backlash among towns in the Inland Empire trying to stop the warehouse sprawl that has filled all but a handful of infill sites in the Western half of the two-county region—which encompasses the area between the LA city limits and the Arizona border—from spreading to the Eastern half and northward.

At 2.3B SF and counting—in a looming economic slowdown that has seen e-retail giant Amazon cull more than 50M SF of its national warehouse footprint—has the nation’s busiest logistics hub finally reached its limits?

Not according to Transwestern, which has focused its SoCal industrial strategy on new, ground-up development of industrial space.

“{We’re] 90% focused on new, ground-up development. While land is tight, especially with how hot the industrial market has been, there are still many suitable areas of development in the region,” Stephen Batcheller, Partner – Western US, Transwestern Development Co., told GlobeSt.

Batcheller said Amazon’s nationwide pullback would not impact on industrial expansion plans in Southern California, where vacancies have been less than 1% all year.

“We’re not delaying any of our projects due to the Amazon slowdown. Amazon is obviously a huge player, but their slowdown has not materially affected the Southern California industrial market,” he said.

“With supply chain issues getting under control, we are seeing increased demand from retailers as they seek to increase safety stock or just-in-case stock and aggressively pursue inventory control,” Batcheller said.

Transwestern believes that the proliferation of new retail 3PL omnichannel platforms will create growth opportunities that will support the company’s ground-up development strategy.

“3PL activity accounts for approximately 37% of current demand for industrial space. This demand and the lack of current inventory is supporting current market rents,” Batcheller told us.

“At the same time, more than two-thirds of US occupiers plan to expand in the coming year. So, you have both groups creating demand for the warehouse products we build,” he added.

In 2021, facing opposition from environmental and community groups concerned about the impact to air quality and desert resources, Transwestern withdrew an application it had made to the Palm Springs Planning Commission to build the Eastern Empire Fulfillment Center on a 148-acre site south of 1-10 in Whitewater, CA.

Batcheller doesn’t expect the growing NIMBY backlash to hinder Transwestern’s SoCal industrial growth strategy.

“Transwestern is strategic and we focus on municipalities that support logistics buildings. We have come across very few cities in Southern California that have active moratoriums prohibiting warehouses,” he said.