Rent-Growth Rates Spiking as Land Scarcity Is More Apparent

Let’s jump right into some confirmation bias around the I.E.’s commercial real estate market:

“… industrial rent growth in California’s Inland Empire, located in easily deliverable distances to much of Southern California’s coastal area, was an incredible 58 percent in 2021.” (emphasis ours)

That chunk of heavy copy is from a Prologis report, recently released. That’s the better news. The not-so-great news is that the need for warehouse square footage is far exceeding one critical factor: land scarcity. (They’re just not adding land like they … well, ever.)

Here’s another chunk of data to process: the U.S. will need an additional 330 million square feet of warehouse space by 2025 to keep up with e-commerce growth, according to CBRE. 

Spurring a great portion of this demand for warehousing is e-commerce. CBRE estimates e-commerce sales will rise by $330 billion between now and 2025. That means fulfillment centers and warehouses, that may or may not exist yet (or, you know … ever).