John Tipton John Tipton

LOS ANGELES—The California industrial market is poised for another strong year, according to the latest survey from Allen Matkins and the UCLA Anderson Forecast. GlobeSt.com has exclusively obtained a video of the experts discussing the market for the year ahead. While sentiment in some markets has declined nominally, the overall sentiment throughout California is strong.

“Industrial has consistently been one of the strongest areas,” John Tipton, a partner at Allen Matkins, tells GlobeSt.com. “This survey shows that sentiment in three of the markets has actually increased from very high starting levels to begin with.”

This chart shows developer sentiment across property types. This chart shows developer sentiment across property types.

The chart shows that in some markets, the sentiment decreased. In those markets, Tipton says the decline shows a softened enthusiasm rather than concern for the market. The Inland Empire is one of the markets with a decrease in sentiment. “Over the last three years you have had a increase in online shopping, and that of course leads to more distribution centers. The Inland Empire is really the king of distribution space, and you have had a n awful lot of building in the Inland Empire, and you have seen the market really catching up to the increase in demand,” says Tipton. “Some people think that there could be a rise in vacancy rate. It won’t be enough to halt the rise in rental rate, but it means that perhaps the enthusiasm has dampened a little bit.”

The slowdown in the Chinese economy has contributed to some of the concern in the industrial sector, but Tipton says that there is not a direct relationship between the slowdown in the Chinese economy and the amount of goods America imports from China. “The world has become an interconnected place, and when a large economy starts to slow, it is going to have an affect on the other’s economy,” he explains. “It is really going to be more of an indirect affect a Chinese slowdown would have.”

Watch the below video for more insights on the market from the latest Allen Matkins and the UCLA Anderson Forecast survey.