NAIOP hosted its annual industrial conference, I.CON West in Long Beach, CA on March 8-9, 2023. Below are some key findings and takeaways from the various sessions.
Keynote: Industrial Real Estate Outlook: An Economic Perspective
- The outlook for industrial is closely tied to the labor market and the workforce is aging, with 23% of current workers reaching retirement age in the next decade.
- Technology is key to continuing to increase output as our population declines.
- According to the U.S. Bureau of Labor Statistics, warehousing and final mile jobs are 65% of all new industrial jobs.
- The U.S. will expect to enter a mild recession and goods spending will pull back, industrial vacancy is expected to increase from 3.3% to 6% in 2024, though this is still considered a historically tight market.
- Manufacturing will expect to soften as well, though not auto or aerospace.
- There will be a slowdown in leasing, but the bright spot will be that 3PLs will continue to grow.
- The end of 2023 and 2024 are expected to be a growth years for industrial capital markets. As the cost of debt goes up, investors will be very income-focused and industrial assets benefit from strong net operating income (NOI) growth.
Colliers Insight

“The Mexico market is hot – the top markets are U.S.-MX border markets, Tijuana, Juarez, Reynosa, Monterrey and the cities of Guadalajara and Mexico City. All of these markets boast a sub-1% vacancy rate.”
Opportunities for Industrial Development in Mexico
- The Mexico market is hot – the top markets are U.S.-MX border markets, Tijuana, Juarez, Reynosa, Monterrey and the cities of Guadalajara and Mexico City. All of these markets boast a sub-1% vacancy rate.
- Mexico has seen increased nearshoring manufacturing opportunities, particularly in Monterrey, as companies retool their supply chains to be closer to their markets – Tesla just announced a new Gigafactory in Nuevo Leon, Mexico.
- The mid-Mexico markets of Mexico City and Guadalajara are where 3PLs are based, to access the huge population concentration surrounding there.
- Labor availability and lower labor costs makes Mexico a desirable market – younger demographics contribute to a strong labor supply and labor is less expensive than in the U.S. or China.
- Rafael McCadden, Colliers Industrial & Logistics Director| Mexico City, noted that the biggest challenge facing Mexico now is access to strong, reliable power, and more infrastructure investment is needed by the government.
Labor Data Trends in the Inland Empire
- The Inland Empire remains a key powerhouse industrial market due to its skilled labor force, labor availability, population access, and proximity to the Port of Los Angeles/Long Beach.
- Results from a Hinkey & Associates market participant SWOT survey for Inland Empire: Strength – quality of life/livability, Weakness – too much competition for warehouse workers, Opportunity – increasing workforce training initiatives, Threat – employment cost of doing business in California.
- Steve Bellitti, Colliers Senior Executive Vice President | Ontario, Colliers noted that the companies that should consider lower-cost alternatives like markets in the Southwest are companies that don’t have a major reliance on ports and their end user is not in southern California.
- Micah Landsburg, Chief Development Officer for NFI, noted that amenities to attract labor include temperature-controlled warehouses, a campus-like environment, giving employees tools to be successful and a growth path.
Best Practices for Achieving Net-zero Targets in Industrial Real Estate
- Most of the carbon output comes from the construction side so pick suppliers and partners who are transparent about their carbon output and bring in a solar consultant early in the process to help streamline implementation and reduce costs.
- One opportunity EQT Exeter has utilized to achieve net zero is to take advantage of community solar opportunities that exist in various jurisdictions. Installing solar on industrial roofs and participating in community solar allows the owner to earn extra revenue as outside subscribers can purchase the additional energy.
- Prologis, Cabot, and others are making strides to install solar on buildings, converting tenants to Gross leases.
The NAIOP I.CON conference and breakout sessions allowed for a great opportunity to network amongst developers, principals, brokers, and vendors. As a broker, it allows me to see most of my clients in one place, over a two-day period. These meetings are highly productive and valuable.