Will Inland Empire’s rising industrial prices drive companies out of California? – Press company

As someone famous once said, “These are just opinions, but they’re all mine!”

Today I’m starting the first “random thoughts” column of the year. It’s been a while and emptying your inbox is cleansing, so let’s go!

Forecast for 2022

Our chapter of the Society of Industrial and Office Realtors meets annually to provide a review and outlook on what is happening in the commercial real estate sector. We recently held our first meeting since February 2020.

Yes, the pandemic has affected in-person gatherings, but I digress.

It was great to see the gang. But what must have looked like a good idea when planning the event – al fresco dining – turned into a bunch of trembling realtors huddled around too few heaters. Outdoor event in February? What a good idea. It was a little weather game. The office and industrial markets for Orange County and the Inland Empire were examined. Below are the highlights…

Industrial – Orange County: Robust activity, lease and sale price increases in the 30% range, little to no inventory available. Expect older office buildings to be bought and demolished for new industrial developments – think former OC Register campus, BofA data center in Brea etc. (Both campuses were trapped by Amazon, by the way, one in a sale, the other as a lease.) Expect more of the same in the coming year.

Office – OK: The office market remains mired in uncertainty as large employers fear a return to the office. However, some studies have shown that productivity falls off in a remote workforce. As a result, CEOs are trying to balance security and productivity. Expect hybrid models to prevail—flexible hours and days when an office is fully staffed. Mediation in this uncertainty is a challenge.

Office – Inland Empire: Domestic vacancy rates are lower than Orange County. OC has 13 spots with 100 spots left, while Domestic has 10. We have seen a mass exodus of population from the coastal areas to the inland areas in the last two years. Why pay the exorbitant coastal prices when you don’t have to commute to the office? When all uncertainties have subsided, we expect more corporate headquarters to be located inland. After all, employers follow people. Especially if you have a workforce that is reluctant to commute.


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