Expect Slower Industrial Growth Next Year

Industrial activity has exploded this year for both big and small box product in Southern California—but activity may slow in 2019. While the market is expected to continue to grow, as a result of a supply-demand imbalance that is unlikely to change, the rate of growth will begin to slow.

“The industrial sector will likely see slower growth in 2019. For example, in the last 24 months, the industrial real estate market has experienced significant percentage increases in asset values, land pricing, lease rates and small box owner-user sales,” Jon Pharris, president of CapRock Partners, tells GlobeSt.com. “The industrial sector will continue to outperform most other real estate asset classes but the nominal percentage change when compared to the last two years will be less substantial.”

Despite the potential slow down in growth, the industrial market will continue to be a top asset class for investment, offering phenomenal growth. As a result, CapRock remains a bullish and active investor in the Southern California industrial market for the foreseeable future, particularly on the West Coast. “CapRock Partners continues to be bullish on the Western U.S. industrial real estate market. With our various partners, we will be under construction on more than 5,500,000 square feet of Class A industrial space in Southern California and Nevada in 2019. And, we have additional construction starts already in our pipeline forecasted for 2020.”