Inland Empire – The Big-Box Capital of the U.S.

The Inland Empire continues to attract its share of large industrial projects. Thus far in 2014, 17.7 msf of industrial space has come online, with an additional 12.3 msf underway. Looking at what's entitled and planned, there could potentially be 60 to 70 msf of new development in the next five years (provided the economy cooperates and leasing stays strong). Although proximity to the ports remains an important reason for the continued growth of the market, e-commerce has also become a driving factor. The Inland Empire has the land capacity to build modern fulfillment centers with higher clear heights, more power, ample parking, and proximity to UPS and FedEx hubs. In fact over the past 24 months, leased five fulfillment centers in the Inland Empire totaling 4.2 million square feet, making them the largest tenant in the Inland Empire. has also recently announced plans to build a state-of-the-art 1.2-msf facility in Chino, a submarket located on the western edge of the Inland Empire. The building will exceed the new standard of 36’ clear heights with a 40’ clear ceiling. The facility is part of Wal-Mart’s overall strategy to compete with for internet sales.       With low rents relative to most of Southern California, the Inland Empire remains the most cost effective option for many companies seeking to expand within or enter the Southern California industrial market. This, along with its proximity to the ports makes it attractive to big-box users and guarantees substantial activity in the pipeline for the foreseeable future.

The sheer physical size of the Inland Empire is remarkable; combined, the two counties of Riverside and San Bernardino cover more than one-sixth of California, about the same area as the state of Virginia. Once home to one of the nation’s largest concentrations of dairy farms, the Inland Empire has evolved into the “big-box” capital of the U.S. with an industrial base of 450 million square feet.
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Industrial Build-To-Suit Projects Span Geographies

Industrial Structures
Industrial construction in the U.S. has increased significantly since the bottom of the recession. Historically, build-to-suit (BTS) construction has remained a smaller factor in the industrial market than speculative projects, although from 2010 to 2012 very little speculative industrial space was delivered as few developers would risk construction without a tenant in place. In 2011, as industrial development slowed to a trickle, more than 85% of all new construction was BTS. As the economy has rebounded, BTS has become a smaller portion of total construction across the U.S., as expected. Less than half (45%) of the industrial construction expected to come online in 2014 will be BTS. Still, BTS construction in 2014, will account for 72.9 million square feet (msf) of new space, an almost 70% increase over 2013 and a 118% increase over 2012. Some of the largest projects completed this year will be BTS.

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Sticker Shock for Landlords and Tenants in D.C.


As of January 1, 2015, commercial office building taxes will be assessed using a pooled market value—a comparison of similar properties to recently sold assets of the same class and submarket. This marks a sharp change from the current method that considers factors such as current vacancies and tenant roll-over, concessions offered, and building profitability, and will result in steep increases for many properties as shown when new assessment rates were released earlier this year.
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The Effects of the Panama Canal Expansion on U.S. Ports

Panama Canal

The expansion of the Panama Canal is often referred to as a game-changer for global trade. The extent of the impact of Panama Canal expansion will depend largely on how U.S. ports and inland transportation providers invest in improvements to their infrastructure. With 65% of the canal’s tonnage either departing from or arriving to ports inside the U.S., it comes as little surprise that the canal’s expansion has prompted significant investments as port cities race to upgrade infrastructure in order to maintain competitiveness. Since 2009, the federal government has directly invested more than $400 million in infrastructure projects at 33 U.S. ports in 22 different states through the Transportation Investment Generating Economic Recovery (TIGER) program alone, all to improve the condition, efficiency and capacity of the nation’s ports— including roads, rail and waterside corridors that connect them with producers and consumers.
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New Jersey Industrial – Investors Want In



The New Jersey Industrial market (Northern & Central New Jersey) has performed well during the last year and a half. Overall vacancy has fallen more than a full percentage point since year-end 2012 and tighter market conditions have supported 7.1% rent growth over the same period. Robust demand in recent quarters yielded more than 6.0 million square feet of leasing activity in each of the first two quarters this year and more than 14.0 msf of space has been absorbed since the beginning of 2013.
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Brazil Post World Cup

World Cup

The World Cup ended on Sunday and despite their loss the early consensus is that Brazil was generally well-regarded as host by the international community. The next big hurdle that awaits Brazil are the Olympic Games in 2016. While Brazil can take a sigh of relief now that one of their major forays onto the world stage appears to have successfully passed, investor skepticism has not lifted quite yet. Their recent economic slow-down and the civil unrest that preceded the World Cup still dominate global headlines, making investors somewhat wary.
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BRICKELL CITY CENTRE – The Best is Yet to Come


Brickell is not only transforming into a true 24/7 city, but attracting worldwide recognition. Innovative skyscrapers have helped brand it as one of the most prestigious neighborhoods in the county. There is a collection of cool and low-key bars and boutiques that are magnets for young professionals. The culturally heterogeneous mix of people that live and work in Brickell have led to a recent surge in commercial activity. Brickell is alluring due to its pedestrian-friendly environment featuring select local merchants and specialty restaurants. Its strategic location, surfeit of amenities and unique urban atmosphere have led to increased demand for residential space in Brickell. Cranes are again in the air. Several projects are under construction in the market with many more in the planning stage. International buyers who purchase second or third homes here and young professionals migrating to the urban core are each driving the current wave of residential real estate development, which is being absorbed at a rapid pace.
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Bayou City Outpaces The Nation


Houston’s economy continues to add jobs well above the pace of the nation and in other large metropolitan areas. The unemployment rate in April was 4.6%, far below the national rate of 5.9%, with more than 85,000 jobs added over the last 12-months. The rate of job growth has averaged between 3% and 4% since the end of 2011, and is projected to remain above 3% through 2016 according to Moody’s Analytics. The energy industry is the primary driver of Houston’s economy, with manufacturing, distribution and logistics, the Port of Houston, health services (including biotechnology), and aerospace all contributing significantly to the region’s economic base.
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Positive Momentum For The Industrial Southeast

Palm Beach
Cushman & Wakefield’s recent Southeast Industrial Client Webinar highlighted significant gains in the region’s fundamentals and indicate strong, positive momentum going forward. Construction, which has been confined mainly to build-to-suit or build-to-own opportunities over the past several years, saw solid growth on the speculative end, with over 2.5 million square feet currently under development. In fact, many developers have dusted off old plans long forgotten since before the recession, hoping to get projects shovel-ready as the market continues its expansion.
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Live-Work-Play Model: The Hipsterfication Of Los Angeles


Los Angeles has a limited supply of funky brick-and-timber buildings ready to repurpose. Despite this scarcity, there is an abundance of single-story, stand-alone concrete buildings in soon-to-be-hip areas that can serve as incubators for the start-up creative companies that crop up on a weekly basis throughout the city.
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