http://www.bloomberg.com/news/2013-04-24/bmw-to-amazon-space...About 7.8 million square feet of industrial space is under construction in the area, up from 4.3 million at the end of 2011, according to a report by CBRE. Tenants are currently on the hunt for about 20 million square feet, which has resulted in a 60 percent pre-lease rate for speculative construction, according to Bo Mills, managing director and head of industrial markets for the western U.S. at Chicago-based Jones Lang. snipYou have an abundance of capital that looks to the Inland Empire as a choice location because you have brand-new buildings, and your tenants are Fortune 500 companies that have been recovering very well,” said Michael McCrary, an executive vice president at Jones Lang.The drop in yield from the “mid-sevens about three years ago” is buoying construction because building is becoming cheaper than buying, said Philip Hawkins, chief executive officer of DCT Industrial Trust Inc. (DCT), a Denver-based real estate investment trust.“After demand was dormant from 2008 to early 2010, it has been going through a resurgence,” he said. “Combined with very low vacancy rates in the region and growing rents, that makes this the strongest market in the country. It’s also made things more expensive. So now is a good time to build.” The Inland Empire in Southern California is building. It appears that maybe the velocity of money is picking up. If this speeds up it will feed on itself. While a boom bust cycle is possible, even probable, so I wouldn't rush out to California and buy and industrial RIET, the repercussions from a healed, or healing economy in California would be big.While you can double the economy of North Dakota and it would barely move the needle on income tax receipts, a small increase in income across the state of California will be felt in Washington.It also means that you can get some spot shortages in building materials. With the big copper mine shut in, even a small increase in demand, or a shock like a rebuild from a hurricane could drive and outsized change in price.Copper is something to watch.CheersQazulight
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