Why the West is Such a Strong Industrial “Buy” Market

Muoio: “Much of our trade with China and other Asian countries flows through West Coast ports (due to proximity), and this has fueled a robust demand for warehouse space near these ports.”

IRVINE, CA—Industrial vacancies have been low all cycle, and absorption has been robust, allowing the West and Southern California to digest fully the new supply coming on line, Ten-X’s senior quantitative strategist Chris Muoio tells GlobeSt.com. According to a recent report from the firm that identifies the top five “buy” markets and top five “sell” markets for industrial real estate assets (based on a variety of statistical trends and proprietary calculations), the western region lays claim to four out of the top five “buy” markets, with Southern California benefiting in particular from trade flows with China since Trans-Pacific commerce is driving absorption in the region. The Ten-X Research report also reveals that technological shifts in the overall economy have been steadily delivering benefits to the industrial sector and have helped drive vacancy rates to their lowest levels in nearly two decades.

We spoke with Muoio about the reasons for the West’s strength in industrial trades and how long this strength is expected to continue.