East Bay will have a record year for industrial development
2019 is expected to be a strong year for new industrial product in the East Bay.
January 16, 2019
- 2019 is expected to be a strong year for new industrial product in the East Bay. Over 2.9 million square feet is currently under construction, most of which is expected to deliver by the end of this year. Of the properties under construction, 81.1 percent are Warehouse/Distribution, which corresponds to strong tenant demand for last-mile delivery solutions.
- Three-quarters of the proposed development is located within the secondary submarkets of Richmond and Livermore. Although development costs are relatively cheaper in secondary submarkets, Prologis and Black Creek Group are making strategic use of urban-infill locations with projects along the I-880 Corridor.
- Although many expect 2019 to be a pause year, industrial development is one of the best bets for investors in 2019 according to PricewaterhouseCoopers’s Emerging Trends in Real Estate report. According to one of the interviewees, “the expansion of e-commerce is far from over, and the need for facilities to accommodate a denser distribution network is acute and will only increase over time”. Savvy developers with unique solutions for last-mile delivery and a vision for innovative facilities are set to thrive as many market participants adopt a wait-and-see approach.
Source: JLL Research, PricewaterhouseCoopers