Why This California Inland Empire City Is Considered the ‘Next Frontier’ for Industrial

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Victorville, California, Attracts More Than 2.5 Million Square Feet of Proposed Development

Jack Witthaus | CoStar News

A high desert city in California’s Inland Empire is teeming with industrial development as Southern California’s appetite for this type of real estate grows.

At least three projects totaling roughly 2.8 million square feet have been proposed in Victorville, California, since December, expanding the city’s existing industrial real estate footprint by 26%, according to public documents and CoStar data.

The city is emblematic of the boom in demand for warehouse space in the Inland Empire. It’s a critical area for industrial real estate near greater Los Angeles, the nation’s most valuable market of that property type by asset value, according to CoStar data.

Industrial rents are more affordable in the Inland Empire, and land tends to be more plentiful for industrial development, making way for newer and larger construction than in Los Angeles County.

The recently proposed industrial projects in Victorville include:

• a roughly 1.1 million-square-foot development on 66 acres at Mojave Drive and Onyx Road

• a roughly 1 million-square-foot development on 52 acres at 15980 Bear Valley Road

• a roughly 816,000-square-foot warehouse on 40 acres west of Stoddard Wells Road and south of Abbey Lane.

New Industrial Boomtown Sprouts

Victorville itself is benefiting not only from the Inland Empire’s growing demand for industrial space but from its relative lack of newer industrial product being built.

The city of roughly 134,000 people has a mere 10.6 million square feet of space, or less than 2% of the entire Inland Empire’s industrial footprint. Other Inland Empire cities have seen bigger booms in industrial construction, which has caused land prices to soar and, occasionally, resulted more regulations like moratoriums on industrial construction.

Industrial Property Group, based in Lake Stevens, Washington, sees promise in Victorville for its 66-acre project called Mojave 68 along Mojave Drive. The project may cost $150 million to build and is being marketed by Michael Chavez of Lee & Associates. Construction may start in late 2023 and wrap up in third-quarter 2024.

“We believe the High Desert (also referred to as the Inland Empire North) is the next frontier for logistics,” Craig Wilde, development manager of Industrial Property Group, said in an email. “Users are looking for ways to preserve their economics while facing growing pressures in the Inland Empire due to increased regulations and escalating land prices. Victorville allows for a logical solution to these constraints.”

Industrial Rental Rates Spike

The 727 million-square-foot Inland Empire industrial market space has seen average industrial market rents soar 15.8% year over year and has nearly 40 million square feet of active construction.

The industrial market is one of the nation’s largest and benefits from its proximity to the ports of Los Angeles and Long Beach, some of the busiest ports in the U.S. Big-name tenants have set up shop in the Inland Empire including Amazon, Walmart and Target in a sign of robust demand for industrial space there.

Rafael De Anda, associate director of market analytics of CoStar Group, said that rent growth, coupled with restrictions on development, make cities such as Victorville more desirable for bigger industrial developments.

“There are fewer opportunities for larger developments of that size,” De Anda said.

The Mojave River Valley industrial market, which includes Victorville, has an average market rent of $14.50 per square foot, above the Inland Empire average of $13.91 per square foot.

The market’s vacancy is 2.8% near the Inland Empire average of 2.7%.

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5 COMMENTS

  1. Stop calling Victorville ‘Inland Empire”. It’s about time you down-the-hill” folks get it right. We are about twice as high in altitude than you are and separated from you by a mountain chain. Therefore, we are NOT INLAND EMPIRE. We are our own entity. We are NOT Inland Empire’s step children. Thank you.

  2. Great for developers but as a long time resident dealing with water I wonder how many more huge home developers are going to surge here when these other industrial units are built? More traffic on the roads. At least if they really make the train between down the hill, and to Apple Valley to Vegas that would help. They also need to extend the train to Palmdale and Lancaster.

  3. Of course its cheaper. Check the crime rate. Those businesses are going to be a honey pot for all the gangs and crooks! Cheap is not always the best deal.

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