Friday, June 13, 2008

New Inland Empire Columnist

The Inland Empire has two major papers; The San Bernardino County Sun and the Riverside Press Enterprise.

Here is the latest article that I wrote about logistics in the Inland Empire.

They want this to be a monthly piece, so hopefully I can be more controversial in upcomming editions, this first piece was just a primer to get the whole thing started. The last sentance wasn't mine, I guess that is the bio they branded me with. I am not complaining at all of course, it is just that I havn't had a ton of time to develop a sound econometric model yet, but it is in the works.

I.E.'s a silent partner to the global economy
Article Launched: 06/12/2008 06:44:20 PM PDT

Most people do not realize the vital importance of the Inland Empire in worldwide commerce, because the goods-movement industry works silently behind the scenes to keep the nation running smoothly.

Major firms have distribution centers here to store and consolidate products from multiple overseas and domestic producers. Around a third of these goods will stay in Southern California with the rest being shipped out of the region.

The Inland Empire has a high concentration of transportation and material-moving jobs, jobs that account for around 3.3percent of the work force, much higher than the national average.
Since 2000, improvements in logistics technology, increased global trade and improvements in supply-chain management have led to record demand for high-tech warehouses and distribution centers.

Industrial tenants have migrated from Los Angeles and Orange County to be in the Inland Empire because of lower rents and newer buildings.

Having enough land to build modern warehouses within close proximity to our nation's largest ports has been a huge boon to industrial development in the Inland Empire, which in 2007 accounted for more warehouse completions than Chicago and Atlanta combined.
The industrial market in the Inland Empire is beginning to change, negatively impacted by macroeconomic forces in the greater economy.

The collapse of the residential home building market and decreased demand for foreign goods has reduced demand for warehouse space.

Revaluation of risk in the credit markets has made it tougher for developers to finance large projects, and smaller warehouse users, who typically own their buildings, are starting to feel the pinch of reduced consumer demand and more stringent lending standards.

Vacancy rates for industrial space are starting to rise due to construction completions and tenants either consolidating space or going out of business (Wickes Furniture, for example. This is putting downward pressure on lease rates and causing an increase in landlord concessions.
Conditions in the Inland Empire industrial market will improve as the economy at large improves and warehouse demand increases.

However, high fuel prices, dislocations in the credit markets, falling home prices and tepid consumer demand remain hurdles to a quick recovery.

Thomas Galvin is a research associate at Colliers International commercial brokerage firm in Ontario who uses econometrics to study Inland Empire real-estate trends and produce theory models.

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