Inland Empire Housing Market: Investment Opportunities Based on Industrial Expansion
By Charles Schaffer
At SDC, we are bullish on California's Inland Empire for future multifamily investment opportunities.
To underscore the importance of the Inland Empire as a distribution and warehouse center, let's start by looking at The Port of Los Angeles (POLA) and The Port of Long Beach (POLB) in San Pedro Bay.
These are the two busiest container ports in the United States, accounting for nearly 40% of containerized imports.
The Port of Los Angeles has been ranked the #1 container port in the Western Hemisphere for 23 consecutive years (2000-2022).
The top five containerized imports — mainly originating from Northeast and Southeast Asia — are furniture, auto parts, apparel, plastics, and footwear.
The Southern California Association of Governments (SCAG) expects continual increases in San Pedro Bay containerized imports through 2035, as measured in twenty-foot equivalent units (TEUs).
Source: SCAG
The SCAG also states that an additional 400 million square feet of space for warehouse and distribution centers will be needed by 2035 — but less than half the required space is identified as suitable and available.
The closest California counties to the port available for distribution center expansion are those of the Inland Empire — Riverside and San Bernardino counties.
The Skechers’ Distribution Center in Moreno Valley, Riverside County, is a 1.8 million square foot warehouse and office complex. It sits on approximately 85 acres. This is just one example of the scale of distribution capacity that's been needed until now.
The founder of Skechers is also one of the primary backers of The World Logistics Center in the same community, with planned expansion of 40 million square feet of commercial warehousing.
The $25 billion facility will be constructed over seven years.
Of course, it's better for everyone if employees can live close to their place of employment.
Data from the Building Owners and Managers Association (BOMA) International shows 469 square feet per tenant employee for private sector industrial building occupancy.
This translates to 2,132 employees per million square feet of industrial space, which means 40 million square feet could result in as many as 85,000 jobs.
There's already a need for more multifamily housing in the Inland Empire. Even if SCAG's projections are rounded down, demand for employee housing will continue to outstrip supply for at least the next decade.
Please get in touch with us to learn more about what we are doing to support workforce housing.
Charles Schaffer
President and Founder, SDC Capital Ventures
Charles has founded and operated several development companies over his 35+ year history to pursue his passion for Alternative Investing where he believes outsized returns can be achieved without a corresponding increase in risk. Under Charles' leadership, SDC has developed and financed over $80 million of commercial real estate and renewable energy projects.
