Strong Start To What Will Be A Record Year for Industrial
The economy continues to see modest expansion in the first quarter of 2018 reporting an annualized GDP of 2.8%. The historically low unemployment rate of 4.1% remained unchanged, as national non-farm payroll employment rose by 616,000 in the first quarter. The industrial sector also continues to expand with the value of final products increasing by 2.31% over the last quarter. The ISM Manufacturing Index shows that industry sentiments regarding new orders, inventories, production, and employment remain in expansionary territory. This translated into a strong industrial real estate market that in 2017 had the lowest vacancy rate on record. The National Real Estate Institute’s fourth annual survey projects that the expansionary cycle will continue projecting that the West Coast will outperform the rest of the U.S. for the third consecutive year.
The East Bay industrial real estate market continues to be one of the most in-demand in the nation. The Port of Oakland is the seventh busiest port in the nation, and is in the process of redeveloping the former Oakland Army Base into a modern warehouse and distribution hub. Construction on Phase 1 of the Oakland Global Logistics Center (“OGLC”), a partnership with the Port of Oakland and Prologis finished at the end of last year and the building has already been leased. Personal On Demand Storage (“PODS”) leased Phase 1 of the OGLC in the first quarter. By the end of the year, Phase 2 of OGLC will provide an additional 231,660 square feet of redeveloped industrial property to the 256,216 feet already provided by Phase 1. Industrial property around the Port of Oakland remains highly coveted given its “last mile” location and immediate access to all major transportation.
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