The ‘sexiest’ real estate in Southern California may be a warehouse
By one national measure — from Orange County-based Green Street Advisors — industrial real estate values have essentially doubled since the recession ended, up 11 percent in a year through April vs. a 1 percent decline for overall commercial real estate prices.
Trammell Crow’s new industrial real estate in Riverside.
If you think it’s hard to find affordable Southern California housing, try locating a warehouse to buy or rent.
There’s a noteworthy shortage of perhaps the most boring slice of real estate: so-called “industrial” properties that house everything from warehousing to logistics operations to manufacturing.
And it’s all because of you!
All that online shopping has changed the warehouse game. It used to be retail outlets held most of the consumer goods you bought. Today, the growing habit of clicking at home (or work) to buy puts more goods through warehouse shelves to be delivered to your door. And the consumer’s urge to have goods quickly — even the same day — means warehouses must be close to major metropolitan areas.
Like other real estate sectors, developers haven’t kept up with demand. As a result, forget ocean views … the hot properties are all those inland acres filled with dull concrete facilities filled with consumer goods and related transportation hubs.
“What industrial lacks in sex appeal … it makes up for in demand. It is clearly the most desired product,” says Mike Severson, chief acquisitions officer at Bixby Land Co. from Newport Beach.
Let’s talk industrial real estate numbers around Southern California …