Didja know? Fulfillment is where it’s at. Despite the downturn, newer bulk-distribution warehouses saw little demand decline during the recession.
Warehouses of at least 100,000 square built since 1990 have never posted a quarter of negative absorption, and their total occupied space is more than 200 million square feet above prerecession levels.
For investors, this presents value-added opportunities in the outlying SoCal markets places like Acton, Poway and Ferris. These local/regional industrial hubs that tend to get less building post higher occupancies today and have done so historically.
Investors in these large warehouses enjoy good leasing velocity, high-credit tenants and strong liquidity.
Experts advise that investors should also invest in markets with less sophisticated tenants as a strategy to backfill distribution space as it ages. The nice part about it is the lack of supply in this kind of market enables it to post consistently higher occupancies as tenant demand rises, giving landlords better long-term pricing power.
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