Information provided in this report is based on data derived from CoStar.
North San Bernardino includes Adelanto, Apple Valley, Barstow, Hesperia, Victorville and their surrounding cities, which encompasses ±19,507,908 Sq. Ft. of existing industrial space, according to CoStar. The City of Victorville makes up ±7,948,142 Sq. Ft. or ±40% of the existing industrial inventory, with ±4,466,746 Sq. Ft. located at Southern California Logistics Airport (SCLA) ,home to companies such as Dr. Pepper Snapple Group, Newell Rubbermaid, M & M Mars, Plastipak and other large national industrial/manufacturing tenants.
According to CoStar, we ended the 1st quarter of 2018 with an industrial vacancy rate of 7.5%, down from the 4th quarter of 2017’s rate of 8%. This may appear high when compared to the 5.3% vacancy rate the Inland Empire is currently experiencing, but when you take into consideration that only five properties makeup ±1,135,545 Sq. Ft of the ±1,438,609 Sq. Ft. of vacant space currently available, and the fact that four out of these five properties are suited for very specific uses and are outdated, you are looking at an adjusted vacancy rate closer to 2%. This actually indicates that North San Bernardino has a critical need for more industrial space which is simply not being met.
The last significant industrial building constructed was delivered in June 2017. This project is known as Distribution Center 18 and is located in the California Logistics Center at SCLA; comprised of ±370,000 Sq. Ft. this facility was fully leased to Newell Brands and Plastipak Packaging.
Two major projects are presently underway in the Northern San Bernardino region that when completed will dramatically increase the total industrial square footage in the market but will not really change the landscape of the industrial market in regard to adjusted vacancy. Watson Land Company recently broke ground on a ±1.35 million Sq. Ft. distribution center for Big Lots in Apple Valley that is expected to be completed in 2019, and Industrial Integrity Solutions is currently developing a ±600 million Sq. Ft. Industrial Park in the City of Adelanto; known as the HDO Industrial Park, it is expected to be delivered in 2018. The HDO Industrial Park development has largely been spurred by the City of Adelanto’s pursuit of the nascent Medical Marijuana industry. The former project is likely to remain owner occupied for a long time coming, and the latter’s development is largely hinged on volatile market demand, projected profitability and what appears to be a dwindling supply of privately capitalized cannabis entrepreneurs.