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NAIOP Recaps Inland Empire Markets
The recent NAIOP Inland Empire panel, which took place prior to the San Bernardino County State of the County event, revealed many interesting trends shaping the market. Four CRE leaders shared insights on a panel entitled “Innovation in the Inland Empire Real Estate Market.” If you weren’t able to attend the event, here are a few of the key takeaways presented:
Colliers International’s Robert Caudill, Office market:
- Offices are packing in more employees, which translates to less square footage per person and thus denser work environments
- Trend is downsizing from an average of 200 square feet to 100 square feet of space per user
- All corporate occupiers have plans to reduce their footprint
- The design trend is to have open spaces for groups, with a separated private space to be used only on an as-needed basis
- “Local flavor” offices instead of standardized look
NGKF’s Myron Galchutt, Manufacturing:
- 9% of the manufacturing workforce is at or near retirement
- 47,000 will need to be replaced in the next 10 years
- There is a skills gap to meet the jobs that will be open
- We’re in “crisis mode” to meet the gap; technical training is needed (see InTech)
- Laborer salaries in China and India are growing at a pace of about 20% per year, vs 3% in the US
CBRE’s Joe Cesta, Retail:
- Amazon go trend – the automated store (you’re charged when you leave the store with items; no checkout)
- Retailers need “omni-channel:” both web-based and high-tech brick and mortar
- Millennials expect “on-demand;” how do you get them into a store?
- Experiential retail
- Malls are going “inside out”
Lee & Associates’ William Heim, Industrial:
- For this cycle (starting Q1 2011):
- 84M square feet constructed in the Inland Empire
- 280M square feet of gross leasing activity
- 105M square feet of net absorption
- E-commerce annual sales to reach $500B by 2018
- That equates to a need for 50 to 60M new square feet of space to meet that demand
- Trend is increased clear height (40 to 42 feet going forward?)
- Mezzanine decks
- Increased clear story glass
- “Creative Industrial:” outdoor patios, walking paths, and WiFi
- Multi-story warehouses
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