The East Bay’s industrial development pipeline has hit an all-time low, fueling a dynamic, constrained market that experts say is unlikely to be resolved any time soon.
East Bay has 1.55 million square feet of retail and warehouse space under construction. Number represents an all-time low for the area. Developers, he said, began constructing industrial projects on a speculative basis around 2014, and since then most of the vacant land eligible for new industrial development has been purchased and developed.
The slowdown in new development comes as demand for warehousing and distribution space increases. The pandemic has not only spawned e-commerce giants like Amazon, which have transformed the way e-commerce companies think about mitigating risks related to their supply chain and logistics.
“Most didn’t have enough inventory for emergencies. We ran out of toilet paper during the pandemic, well, people aren’t going to make that mistake again.” Facilities that are available in the United States for those very reasons should there be some kind of crisis…They are building an extension and additional inventory at this facility. The need for storage space is correspondingly large. Most renters in the market are looking for between 100,000 and 250,000 square feet. The region currently has approximately 21.5 million square feet of active tenant needs.
Even if every vacant industrial building in the East Bay were rented, the East Bay would still need about 13.5 million square feet more to meet those needs. built in the region: Just 4.8 million square feet of warehousing and distribution space to be delivered to the East Bay by 2024. So real estate experts believe the imbalance is long-term.
Demanded monthly rents along the I880 corridor increased 14 cents to $1.18 per square foot from the fourth quarter of 2022 to the first quarter of this year. That’s partly because landlords are charging rents starting at $1.50 per square foot per month for newly built industrial facilities. currently in hand or on the way, tenants are willing to pay the higher price, the report said.
