BREAKING DOWN THE CALI-BAJA IOS MARKET WITH RAMIN SALEHI OF CBRE

How do you define the CaliBaja market? 

Geographically, our team defines the boundaries of the CaliBaja Market as San Diego to the North, Tecate/Calexico/Mexicali to the east, and Tijuana, Rosarito and Ensenada, Baja California to the South. This economic and industrial region is a cross-border hub for manufacturing, maquiladoras, aerospace and medical device manufacturing, supply chain, and business trade/logistics. Looking at these markets as a region is imperative when working with occupiers and investors.  Transportation costs, location and labor pool allocation all go in to final decision making with all companies. 

Who are the largest IOS owners/buyers targeting the CaliBaja market? 

Currently, the largest IOS Buyers in the region are trucking and logistics companies.  With the new Otay Mesa II Commercial Border Crossing under construction, there is a strong demand for truck parking on both sides of the border. 

Which submarkets show the most IOS activity? 

Historically, Otay Mesa in San Diego has always had a strong IOS presence.  It is one of the last remaining areas in San Diego with any industrial land left for IOS.  Tijuana is also experiencing a dramatic decrease in available land as many companies are looking to relocate to the CaliBaja region in order to minimize risks in their current supply chain. 

What recommendations would you make to the local economic development staff to better attract logistics users? 

No particular items on US side. On the Mexico side additional investment in streets and roadways in the area of the border could dramatically reduce truck transit times and also make the automobile access to border crossing far more user friendly.  

What unique challenges do you see with a cross-border market? 

While the CaliBaja market offers many advantages, one of the main challenges that we encounter is related to infrastructure (specifically in Tijuana).  Water and Electric are extremely limited and the local government has had difficulty supplying the necessary improvements to provide such utilities.  

What IOS type is most lacking (truck terminal, contractor yards, cross-dock, etc)? 

The most in-demand type of IOS currently is truck terminal and contractor yards. With the addition of the new border crossing, the Mexican government acquired a large area of industrial land that was previously used for truck parking/drop lots. This loss of land combined with major shortage of developable industrial land is forcing those users to look for land on the US side of the border. 

Are there any particular amenities or features that IOS users are craving in your area? 

Most users are able to get away with DG, fencing, and electric.  The larger occupiers often also require modular trailers with utilities and/or a building if doing cross-docking operations. 

Any notable recent transactions that you would like to share?  

Recent transactions for our team include the following: 

• 37K SF Building Purchased for $9.4M-Represented Agramont Worldwide Logistics (Buyer)

• 3AC Industrial Yard Purchased for $5.84M-Used for Truck and Auto Transport/Trucking-Represented AMK Auto Group (Buyer) “Market record pricing”

• 2.1 AC Industrial Land-Sold for $4.1M-Represented Westport Properties (Seller) 

• 127K SF lease to K&N

• 350K SF lease to PIMS

• 37 Acre development site sale to Macquarie

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