By Brad Umansky
I attended the RealShare Inland Empire event last week and it was really a treat to be in a room of people interested in the Inland Empire, but who were not strictly retail focused. As a guy whose entire working life has involved living and breathing retail, I sometimes forget about the broader picture. Here are some of my takeaways from this event:
SoCal’s Ports Are Some of the Best in the World
It takes a lot less time to ship a container from China to Los Angeles and then send it across the country by rail then it does to ship it through the Panama Canal to the east coast. This gives the Los Angeles/Long Beach ports a tremendous competitive advantage that will be difficult to alter. As the panelist said, “China is Where China is”. The corollary is, “the Inland Empire is where the Inland Empire is”. It’s wonderful love story that will hopefully lead to many years of happiness.
The LA/Long Beach ports carry 3 times the amount of traffic as the New York/New Jersey. Simply put, we’re #1 and they are #2.
The Media Puts its Own Spin on Things (Surprise, Surprise)
There was a consensus that states that “job steal” from California is an over exaggeration. It’s true that California has a lot of entrepreneurial talent and momentum, and nearly every time we lose a business to another state, it becomes newsworthy. However, it doesn’t happen nearly as frequently as it is portrayed.
Businesses are Thriving in California
According to Larry Vaupel, Economic Development Administrator at the County of San Bernardino, a recent study showed that of the businesses started in CA in 2008, 75% of them are still in business today. The next closest state was under 55%.
The Big Box Industrial Market is Hot
SoCal has the largest industrial base in the US and the US is the “glow in the dark place for capital (according to one panelist) in the world”. There is 70 million SF of industrial boxes over 500,000 SF in some form of the planning stage in the Inland Empire.
E-commerce is Stepping Up its Game, but Retail is Ready
Of the 25 million of industrial space absorbed in the Inland Empire in 2014, almost 10 million of it was for e-commerce. These e-commerce distribution facilities create a lot of jobs and bode well for the overall Inland Empire economy. If e-commerce is going to challenge retail, at least our region is getting many benefits from it.
Unions Are Slowing Down Production
The one area of trouble that was most interesting is the log jam that they are currently having at the port. Apparently, the unions are exercising some of their powers to demonstrate that they can slow shipments down, being that there is a shortage of both trucks and truck chassis to move the containers out of the ports and lack the necessary truck drivers. The hopeful answer to these issues was that they would pass as the imbalance gets resolved by market forces.
The Future of the Inland Empire Remains Optimistic
The one consensus about the economy is that we need good jobs. There is a belief that our region will attract more healthcare and construction jobs in the near future. This additional job growth and people’s improved credit (and potentially lender’s easing their credit standards) will result in further growth in the IE.
Overall, it was great to hear a group of people talk about growth in the Inland Empire and the fact the IE is on the radar screen from an international perspective.