The industrial sector has proven itself to be a highly resilient asset class that has continued to draw investor interest, even over the turbulent past few years for commercial real estate. While transactions remained at nearly a standstill for the majority of 2024, there was steady demand for well-positioned industrial assets.

Industrial is appealing to investors seeking a hedge against inflation to preserve capital. While still elevated slightly from their historic lows, cap rates are compressed, with most transactions closing at sub-5 percent cap rates in prime markets. It was also the only major product type to see a decrease in loan delinquencies in the fourth quarter, a further testament to the sector’s stability through an evolving economic landscape and unprecedented global events.

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Yes, there have been persistent headlines of oversupply and softening demand in Los Angeles County and the Inland Empire and attention being driven toward emerging markets in the Southeast and Midwest. That said, Southern California and other Western markets remain critical hubs of commerce and logistics that will continue to benefit from the same demand drivers and fundamentals that have historically propelled these regions. In fact, there are emerging submarkets within these regions with strong growth potential that are attracting businesses, developers and investors alike.

Strong outlook for demand drivers

Even in the face of a new administration and geopolitical uncertainty, Western markets in particular remain a key hub for both global and domestic commerce. In 2024’s fourth quarter, year-over-year volume at Southern California’s San Pedro Bay Port Complex (home to the ports of Los Angeles and Long Beach) was up 19.5 percent, according to Freightos data, and costs per container from East Asia to the West Coast declined 13 percent.

While some investors are still hesitant to make moves amid headlines of rising vacancies resulting from significant deliveries, strong absorption rates indicate that these will likely begin to fall again in 2025. In fact, throughout the Inland Empire, average gross and net absorption rates were up in the fourth quarter as a result of stronger demand.

From an overall economic standpoint, higher employment rates and improving sentiments are signs we will see industrial users making moves. This will create ample opportunity, as many tenants are poised to strategically navigate their own growth and invest in their supply chains this year. At DAUM, we’ve assisted several companies, including retailers and distributors, with expansions this past year and expect this kind of activity to continue.

Opportunities in emerging submarkets

We’re even seeing new and planned construction of state-of-the-art distribution centers and mega-warehouses in historically underutilized areas of the Inland Empire and Los Angeles County that still have ample developable land.

One example of this is L.A. County’s Antelope Valley, which is located just an hour from the ports, north of the city of L.A. and just west of the Inland Empire. With growing business and residential populations, an educated workforce and a business-friendly government, it is poised to continue attracting businesses and represents an area of industrial growth and fertile ground for investment.

Industrial users, including logistics firms and manufacturers, are attracted by the region’s affordability, given that rental rates remain high in submarkets near downtown Los Angeles. Additionally, drayage costs to the Antelope Valley are the same as to Beaumont and Banning and lower than the High Desert, Tejon and the Central Valley.

In fact, DAUM agents recently arranged the sale of 68.5 acres of land in Lancaster—fully entitled for a 1.26 million-square-foot distribution center—to Amazon.

Especially as the logistics industry continues to increase its capabilities of next- and same-day delivery, there remains strong demand for quality industrial space near key population and transportation hubs.

Rick John, SIOR, is executive vice president at DAUM Commercial Real Estate Services.

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The 18-acre campus will be located at the intersection of Harvill and Placentia avenues, and is set to feature the county’s first mental health urgent care and crisis residential program for children under 13, addressing a critical gap in health-care service. The facility is also aiming to provide a range of services focused on every level of recovery, including urgent behavioral health treatment, supportive housing and outpatient care. Additionally, the campus will also feature primary and specialty medical care, dental services, substance abuse disorder treatment and a pharmacy that will be open to the public.

READ ALSO: Why the Medical Outpatient Sector Is Poised for Growth in 2025

Those services will be housed in several buildings:

• Building 2: Community Wellness and Education Center—99,200 square feet;
• Building 3: Children and Youth Services—40,800 square feet;
• Building 4: Urgent Care Services—50,900 square feet;
• Building 5: Supportive Transitional Housing—192,500 square feet;
• Building 6: Extended Residential Care—66,700 square feet.

Plans at The Wellness Village also call for amenities that promote community interaction and holistic recovery such as green spaces and gardens for relaxation and mediation; sports courts and lawn for physical activity and recreation; a public market and café for community gatherings.

In addition to PMB as developer, the team includes Boulder Associates as architect; Snyder Langston as design-builder and PMB Real Estate Services as property manager. Morgan Stanley, JLL, Kensington Advisors, P3 Foundation, Advocates for Human Potential Inc. are among the developer’s financial partners. The California Department of Health Care Services awarded more than $80 million in grants to RUHS for the construction of the campus through its Behavioral Health Continuum Infrastructure Program.

More MOBs underway

The Wellness Village is not the only health-care facility that PMB is working on in California. Just last month, the developer and Sharp Rees-Stealy topped out the 75,000-square-foot medical outpatient building at 480 H St. in Chula Vista, Calif., a San Diego submarket. Completion is expected later this year. The three-story facility is set to provide advanced health care, including primary and specialty care, urgent care, physical therapy, radiology, cardiology, neurology and laboratory services. The building will also feature ground-floor retail space, including a pharmacy and a café.

In Arizona, PMB is working alongside Abrazo Health on the Abrazo Health Litchfield Medical Building, a 46,000-square-foot facility in Goodyear. The two-story project is also expected to come online this year. It is the city’s first combination of medical offices and inpatient rehabilitation programs. Abrazo Health committed to 27,000 square feet at the building, while MedCure will occupy 5,000 square feet.

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Miramar Capital has purchased Serrano Industrial Park, a three-building, Class A campus totaling 332,725 square feet in Jurupa Valley, Calif., for $86 million. CBRE negotiated on behalf of the seller, PreZero.

Completed in 2019, the manufacturing buildings are at 4350, 4388 and 4420 Serrano Drive. Collectively, they feature 28 dock-high and three grade-level doors, 30- to 32-foot clear heights, heavy power and fully secure concrete truck courts.

The industrial park is zoned specifically for manufacturing—not distribution—and has conditional use permits for recycling of various materials and the handling of organic waste, according to listing information from CBRE.

READ ALSO: Inland Empire Industrial Assets Trade Less Often, but Fetch Top Dollar

PreZero originally occupied the entire property, but now occupies just the asset’s largest building at 4420 Serrano Drive, Miramar Managing Partner Peter Eichler told Commercial Property Executive.

The property is in the northwest corner of Riverside County, in the Inland Empire West submarket. The location has easy access to State Route 60, Interstate 15 and the San Pedro Bay Port complex; it also is 7 miles from Ontario International Airport.

Joe Cesta and Darla Longo of CBRE National Partners, along with Erik Wanland, represented PreZero in the transaction. Cesta noted that demand in the Inland Empire is substantial for industrial facilities that can support manufacturing tenants that require heavy power.

Healthy variety

The Inland Empire currently enjoys the nation’s highest five-year asking rent growth forecast, with 28.9 percent growth projected from this year to 2029, according to CBRE Econometric Advisors.

In addition, the Inland Empire West saw 8.7 million square feet of net absorption in 2024, even as total square footage under construction fell by 64 percent year-over-year.

One of the underway projects is Schaefer Logistics Center. Developed by Lovett Industrial, the facility will come online in Chino, Calif., also in the Inland Empire West submarket.

The post Miramar Capital Pays $86M for Inland Empire Industrial Park appeared first on Commercial Property Executive.

McGee Business Center I and II are two fully leased Class B shallow-bay business parks totaling 231,696 square feet, in San Bernardino County. The seller was ‘C’ McGee Electric, according to CommercialEdge data.

Business Park I is at 2300 S. Reservoir St. in Pomona and was completed in 1981. It consists of four buildings totaling 129,800 square feet. Business Park II is at 12301–12395 Mills Avenue in Chino and was delivered in 1987. It comprises five buildings totaling 101,896 square feet.

The two properties total 71 industrial suites averaging 3,263 square feet. The buildings have minimal office buildouts, about 5 percent each, a JLL spokesperson told Commercial Property Executive. Tenant uses include traditional warehousing/distribution and light manufacturing space for small businesses.

READ ALSO: Inland Empire Industrial Assets Trade Less Often, but Fetch Top Dollar

McGee Business Center is less than a mile from CA-60 (Pomona Freeway) and has convenient access to CA-71 (Chino Valley Freeway) and I-10.

The JLL Capital Markets team was led by Senior Director Peter Thompson and analysts Kyle White and Nick Englhard.

Deep demand for shallow-bay

In early November, Cabot Properties acquired a four-building, 669,000-square-foot industrial portfolio in the Inland Empire from Link Logistics for $202 million. In an unusual angle, Cabot was actually repurchasing three of the four properties, having developed and built them between 2018 and 2021.

This past summer, Matthews Real Estate Investment Services reviewed the reasons for increasing interest in shallow-bay, multi-tenant industrial properties. These include the assets’ appeal to a large number of users, shorter lease terms that allow timelier ability to mark rents to market, and a relative shortage of shallow-bay spaces, as developers focus primarily on larger industrial projects.

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The market’s under-construction pipeline at the end of September reached 10.3 million square feet. A total of 32 projects were underway, accounting for 1.5 percent of existing inventory.

The Inland Empire also ranked as the fourth most expensive market in the nation, with an average price per square foot of $265, surpassed only by the Bay Area ($476 per square foot), Orange County ($319 per square foot) and Los Angeles ($297 per square foot). The total investment volume, however, clocked in at $1.5 billion year-to-date as of September, less than half the $3.8 billion registered during the same time frame in 2023.

Inland Empire’s pipeline still in the spotlight

At the end of September, the Inland Empire’s industrial sector had about 10.3 million square feet of space underway. The 32 developments under construction account for 1.5 percent of the metro’s total stock, slightly below the 1.8 percent U.S. average.

The market ranked fifth nationally in terms of pipeline, while Phoenix held onto first place, with 33.8 million square feet. Among other major industrial markets, the metro fared better than Chicago (8.9 million square feet), New Jersey (6.8 million square feet) and Indianapolis (2.3 million square feet).

Year-over-year, the Inland Empire’s industrial deliveries increased significantly, showing that the market is still a hotbed for activity. In September, a joint venture between Wildcat Capital Management and DECA Cos. obtained $135 million to finance the construction and lease-up of Perris Gateway, an 850,000-square-foot industrial property in Perris, Calif. The already underway facility is expected to be available for lease in 2025.

Another notable project in the metro is Shopoff Realty Investments’ 1 million-square-foot facility. The company acquired a 55-acre site back in June and plans to complete the distribution and warehouse space by the end of next year.

Industrial completions rise year-over-year

The Inland Empire’s industrial sector saw roughly 19.2 million square feet of space being delivered year-to-date as of September. A total of 57 properties came online, accounting for 2.9 percent of existing stock, more than double the 1.4 percent national average.

Additionally, the metro’s completion pipeline slightly grew compared to a year ago, when about 18.4 million square feet of space were delivered. Among peer markets, the metro fared better than Indianapolis (6.1 million square feet) and New Jersey (7.1 million square feet), but was surpassed by Phoenix (23.5 million square feet) and Dallas (25.2 million square feet).

Earlier this year, Affinius Capital completed the almost 1.9 million-square-foot Building 1 at Beaumont Crossroads Logistics Park II in Beaumont Capital, Calif. The developer took out a $152 million construction loan last year, originated by Citizens Bank, CommercialEdge data shows.

Inland Empire remains one of the priciest markets

The Inland Empire’s industrial investment volume year-to-date as of September reached north of $1.5 billion. Peer markets such as Dallas ($3.4 billion), the Bay Area ($2.8 billion) and Houston ($2.1 billion) surpassed the metro, while Orange County ($803 million) and Philadelphia ($687 million) were at the opposite pole.

Assets in the Inland Empire traded for $265 per square foot on average, well above the $130 U.S. index. The metro ranked as the fourth most expensive market, with only the Bay Area ($476 per square foot), Orange County ($319 per square foot) and Los Angeles ($297 per square foot) surpassing it.

Following national trends, sales in the metro more than halved year-over-year, however. The Inland Empire registered $3.8 billion in transactions volume during 2023’s first nine months. Despite this significant decline, the average price per square foot rose about $13.

In one of the most notable deals of the year, Clarion Partners sold the 184,654-square foot North San Bernardino Business Park to Stockbridge Capital Group for $168.3 million, CommercialEdge data shows. The two-building campus traded for $911.43 per square foot.

Rent growth tops national figures

As of September, the metro kept its position as national leader in terms of rent growth, with a 12.1 percent increase over the last twelve months, reaching $10.72. Peer markets such as Los Angeles ($14.98) and Orange County ($15.73) were some of the priciest, while Phoenix ($9.12) and Chicago ($6.17) were at the opposite end of the spectrum.

The Inland Empire’s industrial vacancy rate during the same month clocked in at 7.3 percent, slightly above the 7.0 percent national average and 290 basis points higher compared to year-ago figures. Among peer markets, Indianapolis (8.3 percent) and New Jersey (8.6 percent) fared worse, while Atlanta (6.1 percent) and Phoenix (5.6 percent) had less space available.

In June, Logistar Inc. inked a 146,816-square-foot leasing agreement at Airport Distribution Center, a 250,248-square-foot business park in Ontario, Calif. The company will occupy a full building at Alere Property Group’s campus.

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Back in 2014, the property became subject to two CMBS loans totaling $145 million from Wells Fargo Bank, with Wilmington Trust as a trustee, according to CommercialEdge data.

Crossings at Corona came online in 2005 on some 103 acres. Shadow-anchored by Target, the property is home to a diverse mix of regional and national retailers such as Marshall’s, Kohl’s, Barnes & Noble, Ross, HomeGoods, Best Buy, Sportsman’s Warehouse, Famous Footwear, Burlington, Bath & Body Works, Michaels, Edward’s Theatre, Game Stop, Petco, Sephora, Ulta Beauty and Victoria’s Secret, among others.

READ ALSO: How Dining Trends Are Reshaping Shopping Centers

Located at 3615 Grand Oaks, the shopping center is at the northeast corner of Interstate 15 and Cajalco Road, in an area where the daily traffic count reaches more than 200,000 vehicles, according to JLL. The average household income within a 3-mile radius is approximately $157,625.

JLL Managing Director John Marshall, Director Spencer Seibring and Analyst Nick Englhard led the Debt Advisory team in arranging the financing for the borrower.

Inland Empire’s retail scene

Inland Empire’s retail market saw a slight contraction in the third quarter of this year, according to a recent CBRE report. The vacancy rate clocked in at 6.6 percent, up 20 basis points from the previous quarter. Approximately 41,000 square feet of retail space came online in the region.

Meanwhile, retail investment sales totaled $145.8 million in the third quarter of this year. The second-largest transaction of the interval involved a 273,424-square-foot retail center in Fontana, Calif. A joint venture between MCB Real Estate and a fund managed by DRA Advisors purchased the asset for $64.7 million.

The post Castle & Cooke Lands $140M for Inland Empire Retail Center appeared first on Commercial Property Executive.

Cabot Properties has paid $202.1 million for the IE 4-Pack portfolio, a four-building industrial collection totaling 669,057 square feet in the Inland Empire. The seller was Link Logistics, according to CommercialEdge. Colliers brokered the deal.

Situated in Ontario, Calif., Fontana, Calif., and San Bernardino, Calif., all assets were fully leased at the time of sale, with a remaining weighted average lease term of 3.6 years.

Cabot Properties had developed and sold three of the properties between 2018 and 2021, the same source shows. The familiarity with the assets and their tenants significantly influenced the purchase decision, said Cabot Director of Investments Chelsea Tamuk Levane in prepared remarks.

READ ALSO: Why Things Are Looking Up for Ports, Supply Chains

The portfolio includes:

• 1670 Champagne Ave. in Ontario, a 263,670-square-foot property completed in 2000.
• 1651 S. Carlos Ave. in Ontario, a 147,484-square-foot facility that came online in 1989.
• 10917 Cherry Ave. in Fontana, built in 2019 and totaling 103,343 square feet.
• 750 S. Valley View Ave. in San Bernardino. The 154,560-square-foot property came online in 2018.

The Ontario properties are within 7 miles of each other and close to Ontario International Airport, while the Fontana and San Bernardino assets are within 15 miles of each other and allow easy access to interstates 10 and 215.

The Colliers team that marketed the industrial assets for sale and led the acquisition process included Vice Chairmen Michael Kendall, Thomas Taylor and Steve Bellitti, Executive Vice President Joey Jones, Senior Vice President Gian Bruno, Vice President Kenny Patricia and Associate Kylie Jones.

The Inland Empire still sees big deals

U.S. industrial transactions amounted to $43.7 billion during the first three quarters of the year, according to a recent CommercialEdge industrial report, the average sale prices showing a consistent increase over the year. However, investment activity in some key markets, including the Inland Empire, experienced a slowdown.

The region has been among the top four markets for sales volume in the past six years, but in 2024 the Inland Empire slid into the ninth place nationwide, witnessing lesser investment activity and an 8 percent drop in average sale prices, from the $289 per square foot in September 2022 to the $265 per square foot recorded this September.

However, the metro continued to see some large industrial deals, the sale of the IE 4-Pack portfolio being one of the priciest transactions that closed this year so far. In another significant deal, EQT Exeter paid $197 million for Commerce Way Distribution Center, an industrial facility totaling 819,004 square feet in Fontana.

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Rexford Industrial has paid $70.1 million for 13201 Dahlia St., a 278,650-square-foot industrial facility in Fontana, Calif., an Inland Empire submarket, in a JLL-brokered deal. AXA Real Estate sold the asset, according to CommercialEdge information.

The property traded for about $251.6 per square foot, well above the $232 market average registered year-to-date through August, a CommercilaEdge industrial report shows. The property formerly changed hands in December 2020 in a portfolio deal comprising almost 8 million square feet, with Cabot Properties as seller.

READ ALSO: Why Light Industrial Properties Will Continue to Shine

Completed in 1989, the cross-dock building was fully leased at the time of sale to Eaton, an Irish manufacturing company, the same data provider shows. The facility features 30-foot clear heights, 59 dock-high loading doors and four drive-in doors, as well as dock levelers and bumpers. Additionally, the warehouse has 115-foot truck courts and about 100 parking spaces and office space.

Located on almost 13 acres, the Class A building provides easy access to interstates 10 and 15 and is some 4 miles from the Ontario International Airport. Downtown Riverside is 13 miles away, while downtown Los Angeles is within 45 miles west.

The JLL Investment Sales and Advisory team included Senior Managing Directors Mark Detmer and Patrick Nally, along with Senior Director Evan Moran. The JLL Inland Empire Markets team comprised Executive Managing Director Mike McCrary, Senior Managing Directors Jeff Bellitti and Ruben Goodsell and Managing Director Hunter McDonald.

Rexford’s recent industrial expansion

Rexford focuses on investing in, operating and redeveloping industrial properties throughout infill Southern California. The company’s portfolio currently comprises 422 properties totaling about 49.5 million rentable square feet.

Earlier this March, Rexford Industrial Realty paid $1 billion for a 3 million-square-foot portfolio. Blackstone Real Estate was the seller of the 48 properties in separate transactions. The buildings were on average 98 percent leased at the time of sale.

The post Rexford Pays $70M for Inland Empire Facility appeared first on Commercial Property Executive.

A joint venture of DECA Cos. and Wildcat Capital Management has received a $135 million loan to finance the development and lease-up of an 850,000-square-foot industrial property in Perris, Calif. Bank OZK was the senior lender, while Affinius Capital originated the subordinate portion of the note.

The partners broke ground on Perris Gateway in January. Apart from the logistics component, the development also includes a 37,000-square-foot retail component that is already presold.

Upon completion, the warehouse will feature 40-foot ceiling heights, 124 dock-high doors, four drive-in doors and 4,000 amps of power, as well as 348 auto parking stalls and 308 trailer parking stalls.

READ ALSO: SoCal Industrial Faces Temporary Slowdown

The site is just off Interstate 215, at the intersection of Ramona Expressway and Nevada Road, 75 miles from both the Port of Long Beach and the Port of Los Angeles. The location also provides connectivity to such key markets as Las Vegas, Phoenix, San Diego and Tucson, but also San Francisco, Reno, Salt Lake City and Albuquerque. 

Affinius Managing Director Tom Burns said, in prepared remarks, that the Inland Empire is seeing strong leasing velocity for industrial buildings larger than 750,000 square feet and that this will be one of only a few large cross-dock buildings newly available for lease in 2025.

DECA did not reply to Commercial Property Executive’s request for additional information.

Sustained growth

In February, CPE reported in depth on the industrial sector in Riverside and San Bernardino counties, noting that despite being one of the nation’s largest industrial markets, the Inland Empire continues to grow—as a percentage of current inventory—at a rate higher than all but two other markets, Phoenix and Dallas.

And in July, a market update based on CommercialEdge data showed that both space in the development pipeline and deliveries have surged since 2023. However, vacancy rose by 4.4 percentage points year-over-year as of May.

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Located at 15218–15320 Summit Ave., Falcon Ridge was fully leased at the time of sale. Its previous owner was SITE Centers, according to CommercialEdge information.

Built in 2005 and renovated in 2023, the retail center is considered to be the region’s shopping hub, according to MCB. The 25.1-acre property is anchored by regional grocery chain Stater Bros. Markets and shadow-anchored by Target. Additional tenants include ULTA Beauty, Michaels, Dollar Tree and Ross Dress For Less. Amenities feature 24 new Tesla charging stations, among others.

Falcon Ridge is just east of Interstate 15, in an area where the daily traffic reaches 148,000 vehicles. More than 250,000 people live within a 5-mile radius and the area’s household incomes average $130,000.

DRA announced the intention of pursuing a value-add strategy with respect to the property, but did not respond to Commercial Property Executive’s request for additional information.

A stable empire 

The Inland Empire’s retail space market finished the second quarter with an overall availability of 6.4 percent, just 0.3 percent up from the first quarter, according to a recent report from CBRE. Positive retailer sentiment derives in part from a growing workforce population in the region, boosted by the significant expansion of industrial/distribution developments.

The investment volume totaled $115.2 million in the second quarter, up $24.3 million from the end of March. In the largest transaction, Albanese Cormier Holdings paid $46.6 million for Rancho Las Palmas Shopping Center in Rancho Mirage, Calif.

The post MCB Real Estate JV Pays $65M for Inland Empire Retail Center appeared first on Commercial Property Executive.

SimplerSpace has opened its third coworking location. The 13,500-square-foot space is at Chino Corporate Center, a 58,573-square-foot office building in Chino, Calif. The flex office provider also operates in Carlsbad, Calif., and Placentia, Calif.

The owner of the four-story, Class A office asset is Foothill Accountable Care Medical Group. The firm picked up the property in 2022 for $15.1 million from The Fulcrum Group, according to CommercialEdge information.

SimplerSpace occupies the property’s entire fourth floor, providing 50 offices and suites. The firm teamed up with building manager Map Realty Group and contractor Dutchmen Construction to guide the space improvement process. Upgrades included the addition of common areas and lobbies upgrades, as well as new flooring, additional conference rooms and the expansion of the break room and lobby spaces.

READ ALSO: As Office Pipeline Shrinks, Existing Class A Buildings Should Benefit

Located at 14726 Ramona Ave., Chino Corporate Center is LEED Gold-certified. Completed in 1991 and renovated in 2015, the office building also features solar energy services, 24-hour card key access and signage options.

Other tenants include Transamerica Financial Advisors, King Realty Group, Coastal Vision Medical Group, InsurTech Insurance Solutions and EJD Engineering Inc., the same source shows.

The approximately 3-acre property is close to Chino Airport, 12 miles from Ontario International Airport, and within 35 miles of downtown Los Angeles.

The coworking sector grows over the quarter

In the first quarter of 2024 there was a 6 percent increase in the national coworking supply, followed by another 7 percent growth in the second quarter, representing 444 more locations throughout the U.S., a recent CoworkingCafe report shows.

Los Angeles secured the top spot across the top 25 markets in the U.S. for inventory growth, with 279 coworking spaces so far. The metro outpaced Dallas-Fort Worth (271 spaces) and Manhattan (264 spaces), the national leader until the end of 2023.

In one of the more recent Los Angeles coworking deals, Industrious expanded its footprint with a 19,000-square-foot lease at the North Tower of Watt Plaza, a 476,120-square-foot office building in Century City, Calif. The tenant entered into a 10-year agreement for a full floor with landlord Watt Cos.

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Overton Moore Properties has purchased 19949 Kendall Drive, a 104,500-square-foot industrial property in San Bernardino, Calif. A joint venture between Bixby Land Co. and a global investment manager sold the Class A facility that was fully leased at the time of closing. JLL represented the seller and procured the buyer.

The joint venture had acquired 19949 Kendall Drive in a four-building, Class A portfolio transaction totaling 982,493 square feet. A $48.9 million loan from HFF had financed the purchase.

READ ALSO: The Inland Empire’s Industrial Strength Doesn’t Wane

Completed in 2008, the facility features 30-foot clear heights, 15 dock-high doors, four grade-level doors, an ESFR sprinkler system and a fully secured 140-foot truck court with multiple points of access. The property also includes 3,000 square feet of office on the mezzanine level, a 1,530-square-foot showroom and approximately 100 parking spaces.

Situated within Inland Empire’s Fontana submarket, the facility is near Interstate 215, which leads directly to downtown San Bernardino. The location provides access across Southern California’s major transportation corridors and critical distribution and logistics hubs.

The property is also 2 miles from Hallmark Distribution Center, a 340,080-square-foot industrial facility that Bixby Land sold in May. Dalfen Industrial acquired the fully occupied asset.

The Inland Empire, a leader in industrial rent growth

The Inland Empire recorded $709 million in industrial sales year-to-date as of May, according to a recent CommercialEdge report. In one of the largest deals, EQT Exeter paid $197 million for Commerce Way Distribution Center, an 819,004-square-foot property in Fontana, Calif.

The metro had the highest industrial rent growth once again, with in-place rents increasing 12.6 percent over the last 12 months. New leases were signed at $13.75 per square foot, $3.56 above in-place rents. 

The post Bixby JV Sells Inland Empire Industrial Facility appeared first on Commercial Property Executive.

Lovett Industrial has obtained entitlements for the development of Schaefer Logistics Center, a 298,000-square-foot industrial facility in Chino, Calif., within the Inland Empire West submarket.

Lovett acquired the development site in 2023, for $40 million, according to San Bernardino County public records.

Construction start is scheduled for the fourth quarter of this year, while completion is expected by the end of 2025. Colliers Vice Chairs Clyde Stauff and Jace Gan will lead marketing and leasing efforts.

Schaefer Logistics Center will rise at 13610 Yorba Ave. and will have 36-foot clear heights, 7-inch concrete slabs, 46 dock-high doors, 56 trailer parking spots and a truck court.

READ ALSO: The Inland Empire’s Industrial Strength Doesn’t Wane

The development will include infrastructure improvements, such as road widening on both Yorba and Schaefer Avenues, new and modified traffic signals, sidewalks and bike lanes.

The 14-acre site is near Interstate 10 as well as Chino Airport, 10 miles from Ontario International Airport, 23 miles from Riverside, Calif., 24 miles from Anaheim, Calif. and within 34 miles of Orange County, Calif. Both the Port of Los Angeles and the Port of Long Beach are within 55 miles.

Significant projects coming to the Inland Empire

A few other major industrial projects are planned to come online in the market. Earlier this year, Shopoff Realty Investments acquired 55 acres along Interstate 10, where it will build a 1 million-square-foot distribution center. Construction scheduled to start in the third quarter.

CBRE Investment Management and Hillwood Investment Properties are developing Speedway Commerce Center in Fontana, Calif. The 6.6 million-square-foot campus was funded with a $756 million package earlier this year.

The post Lovett Industrial to Build 298 KSF Inland Empire Facility appeared first on Commercial Property Executive.

Since the beginning of the year, the Inland Empire’s industrial sector has experienced significant development pipeline growth, attracting considerable attention from investors and developers. As of May, the market had roughly 4.5 million square feet underway, recording a tenfold increase compared to the same period of last year, CommercialEdge data shows.

Additionally, 45 properties came online year-to-date as of May, totaling almost 17.5 million square feet. This is more than double the 8.6 million square feet delivered during the same timeframe in 2023.

Despite several positive signs, the Inland Empire is facing its challenges, too. The metro’s vacancy rate rose to 6.6 percent in May, marking a 440-basis-point increase over the year.

Completions more than double year-over-year

The Inland Empire’s industrial sector saw almost 17.5 million square feet of space coming online across 45 facilities year-to-date as of May. This accounts for 2.6 percent of the market’s total stock, way above the 0.9 percent national average. Completions in the metro more than doubled year-over-year.

Compared to other peer markets, the metro outpaced Phoenix (13.6 million square feet), Chicago (8.2 million square feet) and Atlanta (4.1 million square feet), and trailed behind Dallas (17.9 million square feet).

At the beginning of the year, Prologis completed Building 2 of Merrill Commerce Center, a more than 4 million-square-foot facility in Ontario, Calif. The property features 68 dock-high loading doors and is fully leased to Amazon, CommercialEdge data shows.

The company also completed two more buildings within the same campus, which added about 2.4 million square feet to its inventory. According to their plans, the development will incorporate about 8.5 million square feet at full buildout, spread across some 376 acres.

More industrial space in the works

At the end of May, the Inland Empire’s under-construction pipeline stood at almost 4.5 million square feet. With 25 properties being developed, the metro had 0.7 percent of total stock underway. The market was far behind peer metros, such as Chicago (1.0 percent), Atlanta (1.8 percent) and Dallas (1.8 percent). Phoenix led nationally, with about 38.7 million square feet underway, accounting for 9.8 percent of existing stock.

However, the metro’s share of industrial space in the under-construction and planning phases reached 7.4 percent of existing stock, surpassing Dallas (6.7 percent), the Bay Area (5.5 percent) and Atlanta (3.3 percent).

In March, a joint venture between CBRE Investment Management and Hillwood Investment Properties obtained a $756 million financing package for the construction of Speedway Commerce Center, a 6.6 million-square-foot logistics project. The first phase of the development will comprise two buildings with 40-foot clear heights, which are slated for completion in early 2025.

IDI Logistics is also active in the market, developing the second building within Perris Logistics Center North, a 2 million-square-foot industrial park in Perris, Calif. The firm broke ground on the 1 million-square-foot facility in April and plans to open it in the second quarter of next year.

Transaction activity remains strong

In terms of sales, the Inland Empire’s industrial sector registered $709 million in transaction volume year-to-date through May, ranking among the top 10 markets in the U.S. Assets traded on average for $216 per square foot, considerably above the $142 national average. However, this marks an almost $53 decrease compared to 2023’s same timeframe, when facilities changed hands for roughly $269 per square foot.

Nationally, the Bay Area ($582), Los Angeles ($313) and New Jersey ($272) commanded the highest sale prices per square foot, while Dallas ($152), Chicago ($91) and Atlanta ($112) were at the opposite pole.

In May, Stockbridge acquired a two-property portfolio totaling 540,478 square feet from Principal Asset Management. The fully leased assets in Ontario, Calif., traded for $142.3 million—or about $263 per square foot.

A month earlier, EQT Exeter purchased the 819,004-square-foot Commerce Way Distribution Center for $197 million, or nearly $241 per square foot. Manulife Investment Management sold the Fontana, Calif., property.

Highest rent growth nationally

Despite a sustained interest in the local industrial market, the metro’s vacancy rate increased to 6.6 percent in May, up by 440 basis points year-over-year. This can be attributed to a rise in the number of deliveries. Additionally, the vacancy was 100 basis points higher than the national average.

In May, the average asking rate in the Inland Empire stood at $10.19 per square foot. This marked a 12.6 percent increase year-over-year, the highest rent growth across the U.S. Notably, Orange County ($15.49 psf) commanded the highest asking rate nationally, while Phoenix ($8.95 psf), Atlanta ($5.76 psf) and Dallas-Fort Worth ($5.95 psf) were at the opposite end of the spectrum. The national average in the same month was $8.00, a 7.5 percent growth over the last 12 months.

In one of the largest deals of the first quarter, Amazon signed a more than 1 million-square-foot lease to occupy the entire Building 1 of Agua Mansa Commerce Park in Riverside, Calif. Upon full build-out, the PGIM Real Estate-developed campus is expected to measure 4.5 million square feet across six buildings.

The post The Inland Empire’s Industrial Strength Doesn’t Wane appeared first on Commercial Property Executive.

The location has good visibility and direct access to the major trade route Interstate 10 and can serve the Southern California ports to the West region.

The property is entitled and ready for development. Shopoff anticipates breaking ground in the third quarter of 2024, and the project is expected to take 12 months to complete.

Ian DeVries and Chris DeVries of Colliers International along with Brad Yates and Stefan Pastor of Stream Realty will handle tenant lease up. The firm will begin marketing the projects to tenants prior to project completion.

READ ALSO: The Industrial Strength of the Inland Empire

Upon completion, the project will total more than 1 million square feet, with 167 docks, 498 trailer stalls and a 42-foot clear height.

Stream Realty Partners Executive Vice President Brad Yates told Commercial Property Executive that as e-commerce and consumer demand continue to grow, the need for large-scale warehouse facilities is expected to increase. Desert Hot Springs, with its available land, infrastructure and proximity to major markets, presents opportunities for the expansion of million-square-foot warehouses to meet the evolving needs of the logistics industry.

I-10’s significant role

Interstate 10 plays a significant role in the economic landscape of Arizona and Southern California, serving as a major commerce corridor that fuels economic growth. Here are some key incentives and benefits it brings to the region:

The I-10 corridor runs across the U.S. from California to Florida, connecting major ports, cities and markets, and is a vital route for transportation and distribution.

Tanner Jansen, Stos Partners vice president of Acquisitions, told CPE that recent strikes by the dockworkers backed up ports’ production, but that has since been resolved and their supply has increased.

READ ALSO: Office Debt – The Underwater Mountain

“There’s been larger demand due to the reduction of Panama Canal traffic from the drought conditions in Central America,” Jansen said. “This delay is causing increased cost, and some logistics demand that typically lands on the east coast, is landing on the west coast and is being transported across the country.”

“California and the West Coast markets are also seeing a recent reversal in their population declines that they suffered during the pandemic, which will bring back further demand for warehousing along the I-10,” Jansen added.

Improving the corridor’s infrastructure

Significant investments have been made to improve the corridor’s infrastructure, according to Yardi Matrix’s Doug Ressler.

The San Bernardino County Transportation Authority and the California Department of Transportation have invested in adding Express Lanes to I-10 in San Bernardino County, which will improve travel time and relieve congestion.

The project components are expected to yield a benefit/cost ratio of 8.0, representing over 500 million person-hours of savings over a 20-year analysis period. Freight benefits are estimated at $1.4 billion over the same period.

The corridor is being upgraded to address a nationally significant freight bottleneck, which will improve the efficiency and reliability of regional freight flows.

I-10 is considered the backbone of the transportation system, providing businesses and their customers with essentials like food and fuel. The interstate supports Arizona’s position at the heart of a regional economy that stretches from Southern California to Texas. This trillion-dollar market relies on I-10 for efficient links to trade and commerce.

Arizona has invested significantly in I-10, with projects such as widening the highway between Phoenix and Tucson. This $400 million investment aims to alleviate traffic pressure, improve public safety and accelerate future growth. These improvements and expansions of I-10 also position Arizona to receive additional federal funds, which can further enhance the state’s transportation infrastructure and economic prospects.

The post Shopoff Realty Plans 1 MSF Inland Empire Distribution Center appeared first on Commercial Property Executive.

Logistar Inc. has committed to 146,816 square feet at Airport Distribution Center, a 250,248-square-foot business park in Ontario, Calif. Newmark represented the owner, Alere Property Group, in the full-building lease negotiations.

The tenant is a supply chain group which provides international logistics, local customs clearance and inspection services, as well as warehouse storage. The Ontario location will be Logistar’s third in California, joining the ones in Fullerton and Chino.

Airport Distribution Center, up close

Alere had acquired the 1989-built warehouse at 5700 E. Airport Drive in 2015 and decided to split it in two separate buildings as rents would be 15 to 20 percent higher that way. Technical Consumer Products was one of the firms that leased space at the property in the past.

Logistar’s new location features 28-foot clear heights, 28 dock-high doors, 14 mechanical loading dock pit levelers and two ground-level doors, as well as 3,744 square feet of office space. Furthermore, the property has a fenced yard with motorized gates and 74 trailer parking stalls.

READ ALSO: CRE Brokerage and the Talent Dilemma

The Airport Distribution Center is roughly 1 mile away from interstates 10 and 15, with Ontario International Airport being more than 3 miles west and San Bernardino International Airport located roughly 19 miles northeast.

Newmark Executive Managing Directors Ron Washle and Mark Kegans represented Alere Property Group.

Inland Empire industrial rents and vacancies go up

After being dethroned by Miami in March, the Inland Empire topped the charts in April for in-place year-over-year rent growth, according to a recent CommercialEdge report. The 12.5 percent rate was 500 basis points higher than the national average of 7.4 percent.

Against the backdrop of robust rent growth, the vacancy rate rose in the region by 200 basis points month-over-month in April, with the percentage climbing up to 6.2 and trailing behind the national 5.2 percent, the same report shows.

The post Logistar Inks Full-Building Inland Empire Lease appeared first on Commercial Property Executive.

San Francisco–based Stockbridge has purchased a two-property, 540,478-square-foot Class A industrial portfolio in Southern California’s Inland Empire from Principal Asset Management for $142.3 million. Cushman & Wakefield advised on the transaction and sourced the acquisition financing.

The portfolio’s two freestanding buildings are a few miles apart, at 3351 E. Philadelphia St. and 4450 E. Lowell St. in Ontario, Calif. Both are fully leased to single tenants in the distribution and retail industries.

3351 E. Philadelphia is a food-grade warehouse completed in 1998; it totals 203,408 square feet and is on a 9.5-acre site, according to information provided by CommercialEdge. Its features include 50- by 52-foot column spacing, a maximum 30-foot clear height and ESFR sprinklers.

READ ALSO: Why Cold Storage Is Getting Hotter

4450 E. Lowell was completed in 1995 and is 317,070 square feet and on a 14.26-acre lot. It features 50- by 52-foot column spacing, a maximum 30-foot clear height, ESFR sprinklers, and three-phase, 277/480-volt, 2000-amp electrical service, also according to CommercialEdge.

The properties reportedly provide convenient access to Southern California’s freeway network and to Ontario International Airport, the Ports of Los Angeles and Long Beach, and LAX International Airport.

Jeff Chiate, Jeffrey Cole, Rick Ellison and Matt Leupold of Cushman & Wakefield’s National Industrial Advisory Group–West represented the seller in the transaction. The firm’s Phil Lombardo, Chuck Belden and Andrew Starnes also provided leasing advisory.

In addition, a Cushman & Wakefield Equity, Debt & Structured Finance team of Rob Rubano, Brian Share, Joseph Lieske, Max Schafer and Becca Tse collaborated in sourcing acquisition financing for the transaction.

Active submarket

Cushman & Wakefield’s latest industrial market report states that the Inland Empire West submarket had a vacancy rate of 5.4 percent in the first quarter, making it the tightest submarket in the Inland Empire. Additionally, the submarket reached almost 1 million square feet of positive net absorption in the first quarter.

Less than two weeks ago, Dalfen Industrial acquired from Bixby Land Co. a 340,080-square-foot Class A industrial facility in San Bernardino, Calif., for an undisclosed amount. The building had last traded in 2019, the year after it was completed, for $33.3 million.

The post Stockbridge Pays $142M for SoCal Industrial Portfolio appeared first on Commercial Property Executive.

Bixby Land Co. has sold Hallmark Distribution Center, a Class A, 340,080-square-foot industrial facility in San Bernardino, Calif. Dalfen Industrial acquired the property, which is currently fully occupied by two tenants. JLL negotiated on behalf of the seller and procured the buyer.

Completed in 2018, Hallmark Distribution Center features 32-foot clear heights, ESFR sprinkler systems, 47 dock-high doors, two grade-level doors and 233 vehicle parking spots, according to CommercialEdge. The one-story industrial building previously changed hands in 2019 for $33.3 million, when Bixby Land Co. picked it up from EBS Realty Partners.

Located at 4982 Hallmark Parkway, the roughly 15-acre asset provides easy access to major transportation routes in the Inland Empire through interstates 215, 10 and 15. It is also 9 miles from San Bernardino International Airport and within 23 miles of Ontario International Airport. Additionally, the industrial property is some 77 miles from The Port of Los Angeles and The Port of Long Beach.

JLL’s Evan Moran, Ryan Sitov, Mark Detmer and Patrick Nally led the Investment Sales and Advisory team that represented the seller; the Inland Empire Markets Team, led by Ruben Goodsell, Jeff Bellitti, Mike McCrary and Patrick Wood, also rendered its assistance. In addition, Kevin Mackenzie and Brian Trop headed the Debt Advisory team that was involved in the deal.

Industrial investment in the Inland Empire

The Inland Empire’s transaction volume in the first three months of 2024 totaled $382 million, according to a recent CommercialEdge report, outperformed only by Los Angeles among the Western markets. Industrial assets in the area changed hands at an average sale price of $212 per square foot, above the national average of $147.

Last month, EQT Exeter made a considerable purchase in the area: The company paid $197 million for Commerce Way Distribution Center, a cross-dock industrial facility totaling 819,004 square feet in Fontana, Calif.

The post Dalfen Industrial Buys 340 KSF Inland Empire Asset appeared first on Commercial Property Executive.

EQT Exeter has paid $197 million for Commerce Way Distribution Center, an 819,004-square-foot industrial facility in Fontana, Calif., an Inland Empire submarket. Manulife Investment Management sold the asset, while JLL represented the seller and procured the buyer.

The property previously traded in 2011 for $55 million, when Manulife acquired it from American Realty Advisors, according to CommercialEdge information.

Completed in 2000, the cross-dock warehouse features 30-foot clear heights, 128 dock-high loading doors and four drive-in doors. Additionally, the property has more than 320 parking spaces.

READ ALSO: Top 5 Emerging Industrial Markets in 2024

The facility is at 13423-13473 Santa Ana Ave., close to interstates 10 and 15 and less than 5 miles from Ontario International Airport. SBD International Airport is some 18 miles away, while downtown Los Angeles is 45 miles west.

The building is also some 5 miles from Speedway Commerce Center, a 6.6 million-square-foot project planned by a CBRE Investment Management fund and Hillwood Investment Properties that recently received a $756 million financing package.

Three separate JLL teams worked on the deal, comprising Senior Managing Directors Patrick Nally, Brian Torp, Mark Detmer and Ruben Goodsell, Executive Managing Directors Mike McCrary and Kevin Mackenzie, Senior Director Evan Moran and Directors Makenna Peter and Samuel Godfrey.

EQT Exeter’s industrial expansion across the U.S.

EQT Exeter’s industrial portfolio comprises 579 properties across the country, totaling almost 155 million square feet, CommercialEdge information shows. Last month, a REIT managed by EQT acquired a 449,642-square-foot manufacturing facility in Georgetown, Texas.

In August, the company purchased Southeast Gateway, a 1.2 million-square-foot business park in Savannah, Ga. Conor Commercial Real Estate sold the two-building asset for $120.4 million.

Inland Empire’s industrial sector remains steady

The transaction volume in the Inland Empire during the first two months of the year stood at $143 million, according to the latest CommercialEdge industrial report. On average, properties traded for $170 per square foot, considerably higher than the $132 national average.

In February, a joint venture of Stockbridge Capital Group and Dedeaux Properties sold a 1 million-square-foot portfolio of industrial outdoor storage properties. The warehouses are located around Southern California’s cities of San Bernardino and Rialto.

The post EQT Exeter Pays $197M for Inland Empire Asset appeared first on Commercial Property Executive.

The first two buildings are slated for completion in early 2025. The property is located at 9300 Cherry Ave. in Fontana, Calif.

Eastdil Secured arranged the financing on behalf of CBRE Investment Management. Dan de la Paz, Eloy Covarrubias and Barbara Perrier of CBRE have been retained to handle leasing efforts.

The partners acquired 364 acres of land from Auto Club Speedway for $559 million for the first phase a year ago. The sale of 69 acres for the project’s second phase is scheduled to close on or before Dec. 31, 2026.

READ ALSO: Why Industrial Is Falling Back to Earth But Not Off a Cliff

Planned as a multi-building logistics center, the project will feature highly functional, larger-scale buildings with 40-foot clear heights, cross-dock loading, 185-foot concrete truck courts, employee parking, optimal circulation and more than 100 acres for excess trailer parking.

Key Inland Empire location

Tenants at Speedway Commerce Center will have easy access to interstates 10 and 15, as well as the San Bernadino BNSF freight railway’s Intermodal Yard. The property also has proximity to the ports of Los Angeles and Long Beach, Calif.

The Inland Empire industrial market fundamentals remain strong with an overall vacancy rate of 5 percent as of the fourth quarter of 2023, according to CBRE research. The vacancy rate for Class A industrial buildings with more than 500,000 square feet of space in the Inland Empire West market is currently at 2.96 percent, CBRE stated.

According to CommercialEdge data, the Inland Empire had 19.4 million square feet of industrial space under construction as of December. This represented 3.0 percent of total inventory, outpacing the 2.4 percent national average. Although the slowing investment market has had a significant impact on sales in the area, demand for industrial space in the Inland Empire remained strong, pushing in-place rental rates higher throughout 2023.

The post CBRE IM, Hillwood Land $756M in Financing for Inland Empire Project appeared first on Commercial Property Executive.

Bixby Land Co. has recapitalized five industrial assets with a $200 million note through its newly established Bixby Industrial Fund 1. The proceeds will also allow for future investments. Accord Group Holdings served as financial advisor to Bixby in creating the fund, with negotiations having started in April last year.

Goldman Sachs Alternatives and Ares Management Real Estate Secondaries are equity investors in the newly established fund.

Two of the warehouses are located in Mira Loma, Calif., an Inland Empire submarket, while one is in Atlanta and two in Phoenix. The five-property portfolio measures more than 836,000 square feet. The facilities are fully leased to 10 tenants and carry a weighted average lease term of 2.4 years.

The Atlanta facility is the largest, encompassing 281,000 square feet. According to CommercialEdge data, Bixby acquired the asset in June 2019 in a portfolio transaction from Stream Realty. The warehouse features 54 dock-high loading doors, two drive-in doors, 185-foot truck courts and a 32-foot maximum clear heights.

Located at 7375 Graham Road, the distribution center is some 12 miles from Hartsfield-Jackson Atlanta International Airport and 20 miles from downtown Atlanta.

Focused on tier one and two markets

Bixby’s portfolio consists of more than 9.5 million square feet of industrial and logistics properties. The firm is focusing on acquiring assets between 50,000 and 350,000 square feet in tier-one and tier-two markets.

Earlier this year, the company sold two last-mile industrial assets in Phoenix. LaSalle Investment Management acquired the 155,144-square-foot Canal Crossing Logistics Center, while Link Logistics purchased the 336,038-square-foot warehouse dubbed Riverside @ 51.

The post Bixby Secures $200M Recap for 836 KSF Portfolio appeared first on Commercial Property Executive.

Although one of the largest contemporary industrial markets, the area has seen sustained construction activity, solid vacancy in the aftermath of a changing supply chain and surging new rental rates. The slowing investment market has had its effects in industrial sales as well, with the Inland Empire total volume being significantly impacted.

Developers still very much keen on the Inland Empire

As of December, 19.4 million square feet of industrial space was under construction within the Inland Empire market, representing 3.0 percent of total stock—slightly above the national average of 2.4 percent. Among peer markets, only Phoenix (11.1 percent) and Dallas (3.6 percent) had larger pipelines, while Indianapolis (2.0 percent) and Atlanta (1.2 percent) were at the other end of the spectrum.

Three of the five largest industrial buildings that were underway at the end of 2023 in the metro are part of Prologis’ Merrill Commerce Center in Ontario, Calif. They all broke ground in 2022 and are slated for delivery this year. The campus includes Amazon’s 4.1 million-square-foot mega-warehouse at 8900 Merrill Ave., where the retailer opened its largest industrial facility in the country earlier this year.

In the first quarter of 2023, Hillwood Investment Properties and CBRE Investment Management purchased 364 acres of land in Fontana, Calif., for $559 million. The partners are planning to construct Speedway Commerce Center, a 364-acre, 6.6 million-square-foot multi-logistics campus.

In July, CapRock Partners announced plans for CapRock Global Logistics, a roughly 500,000-square-foot warehouse within the World Logistics Center master-planned industrial park in Moreno Valley, Calif. The project is slated to be LEED certified.

In 2023, a total of 34 properties broke ground within the Inland Empire market, accounting for 0.9 percent of total tock—lower than the U.S. average of 1.3 percent. Construction starts were significantly lagging those in Phoenix, where 22.8 million square feet of new industrial space started to rise last year, representing 6.0 percent of total stock.

Construction activity continues to stay high

Birtcher Development was active last year in the Inland Empire market. In July, the company started construction on Birtcher Logistics Center Rialto, a 492,410-square-foot facility in Rialto, Calif. A month prior, Birtcher had obtained a $49.2 million construction loan for another industrial facility in Fontana. The 330,048-square-foot industrial facility is set to come online in the first quarter of 2024.

Last year, 26.6 million square feet of industrial space came online in Inland Empire. The 102 properties that were delivered represented 3.8 percent of total inventory in the metro. Across peer markets, Dallas had the most space delivered (59.3 million square feet), followed by Phoenix (32.5 million square feet).

Last year, Bridge Industrial delivered Bridge Point Rancho Cucamonga I— the largest warehouse to come online in 2023 in the market. Comprising more than 1.4 million square feet in Rancho Cucamonga, Calif., the project received a $150 million construction loan from Wells Fargo Bank in 2022. In 2023, Bridge Industrial also completed the neighboring Bridge Point Rancho Cucamonga II, a smaller, 752,500-square-foot industrial facility.

Trammell Crow Co. and Washington Capital Management completed the second phase of Columbia Business Park in Riverside, Calif., in March. The partnership began to develop the 374,000-square-foot facility on a speculative basis and found a tenant during the process.

In June, CapRock Partners completed the construction of two separate industrial properties in Norco, Calif., totaling roughly 1.1 million square feet. The company delivered the first phase Palomino Ranch Business Park, comprising eight buildings, as well as Saddle Ranch South, which encompasses three buildings.

Sales follow national trend in downward movement

The Inland Empire’s transaction activity largely followed national patterns in 2023, with activity down across the nation, to $52.1 billion. That’s roughly half of what it had been in 2022, as capital availability, rising interest rates throughout the year, and overall uncertainty dented investment volumes.

Riverside and San Bernardino counties saw roughly $3.9 billion in industrial asset sales last year, barely trailing Los Angeles, where sales came in right under $4 billion. The two markets are both anchored by the ports of Los Angeles and Long Beach, with the two propped up by the restoring of the global supply chain. Jointly, the SoCal markets accounted for roughly 17 percent of the national sales volume.

Despite a resurgence in freighting in the nearby ports, transactions had a steady decline in 2023’s third and fourth quarters, when total sales reached $750 million, accounting for less than half of Q2’s $1.7 billion total. Overall, 102 Inland Empire industrial assets changed hands in 2023, totaling more than 16 million square feet of space.

The Inland Empire’s average price per square-foot was $248, almost double the $129 national average. The market’s average price was only outpaced by gateway-neighboring logistics markets like Bay Area ($334 psf), Los Angeles ($314 psf) and Orange County ($296).

Investment was driven by companies expanding in the market, like Westcore’s acquisition of a California portfolio, that increased its Inland Empire holdings by 1.5 million square feet.  Meanwhile, GCP paid $507 million for assets in the market, increasing its foothold in the two counties by roughly 1.1 million square feet.

Industrial vacancy just underperforms U.S.

Vacancy rates in the Inland Empire ended the year at 5.0 percent, 40 basis points higher than the national figure, as the market stayed relatively tight. With the market’s construction activity still healthy, there’s still solid interest in the local industrial market. In fact, leases like BDK Logistics’ full lease of an industrial asset in Corona, Calif., was indicative of the market’s rising in-place rental rates throughout 2023, with Class A assets driving growth.

Vacancy rates in nearby Los Angeles were just 10 basis points higher, while markets like Kansas City (2.7 percent), Phoenix (3.2 percent), Charlotte (3.5 percent) and Dallas-Fort Worth (4.3 percent) were well below the national figure. These markets also have the largest under construction and planned pipelines as a percentage of existing stock in the nation, highlighting a quick response from developers. 

Industrial space in the counties of Riverside and San Bernardino is still the cheapest among major SoCal markets, ending 2023 with an average rent of $9.59 per square-foot. Meanwhile Orange County ($14.99 psf) and Los Angeles ($13.9 psf) led the nation in average industrial rent. 

The post The Industrial Strength of the Inland Empire appeared first on Commercial Property Executive.

A joint venture between Stockbridge Capital Group and Dedeaux Properties has sold a 1 million-square-foot portfolio of Class A industrial outdoor storage properties located around Southern California’s cities of San Bernardino and Rialto, in the Inland Empire.

Based in San Francisco and Los Angeles, the partners sold the 23-acre, three-building portfolio for an undisclosed amount to a buyer procured by JLL Capital Markets.

The firm’s Senior Managing Director Mark Detmer, Senior Director Evan Moran and Director Chad Solomon lined up the buyer, while Executive Managing Directors Patrick Wood and Louis Tomaselli advised the owners around the market.

Stockbridge’s sale of the portfolio is its second industrial divestment in under a week. In late January, the firm sold Project RedHawk, a 1.7 million-square-foot, 49-building portfolio with properties in Arizona, Colorado, California and Florida.

READ ALSO: Top 5 Markets for Industrial Transactions

Additionally, Managing Director Brian Halpern and Vice President Jason Rosin procured financing for the buyer.

The three properties that traded are located at 446. S Yucca Ave. in Rialto, as well as at 1066 N. Tippecanoe Ave. and 1938 W. Fifth St. in San Bernardino, and were constructed between 1990 and 2019, CommercialEdge data shows.

The 446. S Yucca Ave. asset is an 11,057-square-foot property, neighbored by several manufacturing companies and storage facilities, as well as a distribution center operated by Staples. The other two plots are located in Opportunity Zones, according to the same source.

The three properties, all located within 7 miles of each other, feed into onramps to the Interstate 215, giving them quick driving access to much of the Inland Empire, as well as Los Angeles, located 50 miles to the west.

Events in the Inland Empire

The Inland Empire continues to lead the nation’s transaction volume, with the closing of more than $3.3 billion in sales in 2023. In August, Westcore Properties expanded its presence in the area with the acquisition of 16 buildings totaling 3.5 million square feet. One month prior, MDH Partners purchased the Harvill Logistics Center, a 333,570-square-foot facility for $112.3 million.

The post Stockbridge JV Sells 1 MSF Outdoor Storage Portfolio appeared first on Commercial Property Executive.

The combination of economic uncertainty and a lower need for additional warehouse inventory pushed the number of industrial leases of at least 1 million square feet lower in 2023 than in 2022, according to a new report from CBRE.

Among the top 100 industrial leases over the past year, 43 were for at least 1 million square feet, versus a record 63 the previous year.

Last year’s top 100 industrial leases totaled 98.6 million square feet, a notable 8 percent decline from the 2022 total of 106.9 million. In parallel with that, the average size in the top 100 leases slumped to 986,744 from 1.07 million square feet.

READ ALSO: For 2024, Prologis Forecasts Growing Freight Traffic

The tenant mix in 2023’s top 100 leases was more diverse than it had been in the previous year. The share of traditional retailers/wholesalers fell from 53 to 30, but the portion of third-party logistics (3PL) operators surged from 11 to 29. The food and beverage, auto, building materials, manufacturing and medical sectors too took larger shares of the top 100, compared with 2022.

Pennsylvania’s I-78/81 Corridor topped all markets with 17 of the top 100 leases, followed by Dallas–Fort Worth with 11, which in addition led the nation for industrial leases of 1 million square feet or more with eight, followed by the Inland Empire with seven. The latter also ranked third for total square footage in 2023’s biggest 100 industrial leases, surpassing both Chicago and Memphis, Tenn.

Going into 2024, CBRE predicts that demand for mega-warehouses will rise as both the economy and rental rates stabilize.

Rise and decline of “just in case”

Two CBRE experts shared some additional insights on the report’s findings with Commercial Property Executive.

“In 2020, many companies began to rely even more heavily on 3PLs to mitigate pandemic-related supply chain disruptions and episodic demand surges,” John Morris, president of Americas Industrial & Logistics, told CPE. “Many of these companies have since realized that 3PLs can play a vital, strategic role in stabilizing their business models, creating efficiencies and helping create variable, dependable scale quickly.”

“We saw unprecedented supply chain disruptions during the pandemic, forcing occupiers to hold more inventory than they would have previously, ‘just in case’ there were disruptions within their supply chains,” added James Breeze, vice president, Global Head of Industrial & Logistics Research. “Now that our supply chains have moderated, occupiers are more confident current inventory levels will be able to keep up with demand.”

The post Extra-Large Warehouse Leasing Slows Down appeared first on Commercial Property Executive.

Dick’s Sporting Goods anchors The Shops at Palm Desert. Image courtesy of Pacific Retail Capital Partners

Pacific Retail Capital Partners, a Los Angeles-based retail investment, development and management company, has acquired The Shops at Palm Desert, a nearly 1 million-square-foot enclosed mall in Palm Desert, Calif., in the heart of Coachella Valley. The firm plans to transform the 72-acre property into a mixed-use destination.

Built in 1982 and renovated in 2013, the mall had previously been owned by Europe-based Unibail-Rodamco-Westfield. The property went into foreclosure with a third-party special servicer and the name was changed from Westfield Palm Desert to The Shops at Palm Desert by October 2021. A 575,000-square-foot portion of the mall, not including the anchor stores, had served as collateral for a $125 million interest-only mortgage that was securitized in 2014 into CMBS, according to Trepp. In August, Trepp reported general terms for a loan modification and assumption had been agreed upon but no details were given at that time.

READ ALSO: When Will It Be a Good Time to Invest in Retail?

Most recently, URW sold Westfield Valencia Town Center, a 1 million-square-foot shopping mall in Santa Clarita, Calif., to Centennial Real Estate in September as part of its ongoing two-year deleveraging strategies for U.S. properties. Centennial purchased the asset for $4 million in excess of the property’s existing $195 million debt; URW had defaulted on the loan in January. Also this year, URW sold Westfield Mission Valley and Westfield North County Fair, two shopping centers with a total of 2.7 million square feet in the San Diego, Calif., area.

Palm Desert details

The only enclosed mall in Coachella Valley, The Shops at Palm Desert attracts residents and tourists alike. Anchored by JCPenney, Macy’s, Dick’s Sporting Goods and Barnes & Noble, the mall has more than 100 retail stores and eateries including Champs Sports, H&M, Bath & Body Works, Express, GameStop and Hot Topic. World Gym, Elite Cosmetology and College of the Desert are also tenants at the property located at 72-840 Highway 111.

While PRCP has not yet announced specifics for the site’s redevelopment, CEO Steve Plenge said in prepared remarks they plan to unencumber underutilized retail space and add a mixed-use component that would include green space, multifamily housing and entertainment offerings. Plenge noted the company specializes in transforming and repositioning malls through a value-add strategy.

PRCP deals, redevelopments

The Shops at Palm Desert marks the second acquisition made by PRCP this year. The first one was in May, when the firm entered the New Jersey market by purchasing the 1.2 million-square-foot Bridgewater Commons mall and the adjacent Village at Bridgewater Commons, a 94,000-square-foot open-air shopping center. PRCP assumed Bridgewater Commons’ existing loan and secured an extension that will provide the company time to execute its plan to transform the mall into a mixed-use destination.

READ ALSO: Here Comes the Neighborhood: Mixed-Use Projects’ Bid to Fit In

Other mall-to-mixed-use projects PRCP is involved in across the country include:

• The site of the former Galleria at White Plains in White Plains, N.Y., where PRCP, in partnership with the Cappelli Organization and SL Green, has proposed a $2.5 billion mixed-use project that would demolish the now shuttered 900,000-square-foot mall and two parking garages and build seven residential towers with more than 3,000 units, a food hall, retail shops and pedestrian promenade. Nearly half of the District Galleria site would be open space.
• Yorktown Center in Lombard, Ill., where PRCP acquired the former Carson’s anchor box and is transforming it into a mixed-use destination by adding more than 600 multifamily units and a park.
• The Shops at South Town in Sandy, Utah, where efforts are underway to reposition the site into a live, work and play environment by building more than 1,000 multifamily units and adding office and hotel components along with additional retail and restaurant space.

PRCP also made its first foray into Arizona in September, when it assumed management and leasing responsibilities at a 1.1 million-square-foot retail center in Tucson, Ariz. Park Place entered special servicing earlier this year, when Brookfield Properties defaulted on a $200 million loan.

The post Pacific Retail Capital Partners Buys 1 MSF Inland Empire Mall appeared first on Commercial Property Executive.

Completed in 1974, Citrus Landing recently underwent a cosmetic renovation. Image courtesy of Paragon Commercial Group

Paragon Commercial Group has sold five retail outparcels at Citrus Landing, a 124,904-square-foot grocery-anchored shopping center in Riverside, Calif., in a 1031 exchange. Private investors from San Diego and Newport Beach purchased the outparcels for $43.6 million, according to public records.

Hanley Investment Group Real Estate Advisors brokered the transaction, with Executive Vice President Kevin Fryman and President Ed Hanley representing the 1031 exchange buyers. REZA Investment Group Inc. worked on behalf of the seller.

The five exterior pad and outparcel buildings encompass 25,916 square feet on 5.46 acres and are shadow-anchored by Stater Bros. Markets, Ross Dress For Less and AutoZone, which collectively occupy a 96,422-square-foot building that wasn’t part of the sale. The tenant roster includes national and regional retailers such as Chick-fil-A, Carl’s Jr., Quick Quack Car Wash, Arrowhead Credit Union, Panda Express, Café Bottega and Pacific Dental.

Located at 6061-6221 Van Buren Blvd. and 7280 Arlington Ave., the outparcels are in an area where average daily traffic reaches between 22,089 vehicles and 53,848 vehicles. Citrus Landing is near Riverside Freeway, which provides direct access to downtown Los Angeles. Riverside Municipal Airport and Riverside Flight Academy are within a 1-mile radius.

Paragon purchased Citrus Landing in 2020 from Primestor Development for $13.4 million, according to CommercialEdge data. Completed in 1974, the property recently underwent a cosmetic renovation.

Paragon has recently recapitalized Village Center, a 93,336-square-foot retail asset in Fountain Valley, Calif., with a $17 million permanent loan.

The post Paragon Sells Retail Outparcels in 1031 Exchange appeared first on Commercial Property Executive.

The portfolio includes four buildings in Valencia, Calif., completed in 2000. Image courtesy of Colliers

Westcore Properties has acquired a 16-building industrial portfolio in California, spread across Livermore, Valencia and Chino. MEPT was the seller of the 3.5 million-square-foot Odyssey Portfolio, CommercialEdge data shows. Eastdil Secured assisted the seller, while Westcore represented itself in the transaction.

Fully leased at the time of the deal, The Odyssey comprises Class A, A- and B+ buildings. The portfolio includes nine buildings in Chino totaling 1.5 million square feet, occupied by nine tenants. Adding up to 742,558 square feet, the four properties in Valencia came online in 2000 and comprise five tenants. Completed in 2016, the three Class A Livermore buildings are leased to two tenants and offer a total of 1.3 million square feet.

READ ALSO: Real Estate Market Sentiment Improves

The portfolio’s tenant roster comprises distribution, warehousing and light manufacturing companies, operating on a national, regional or local level. Some of the major tenants include Pharmavite, Tesla, Draxlmaier Automotive, as well as blue-chip companies, such as Coca Cola and Schlage.

The properties are part of the Los Angeles, Inland Empire and Bay Area markets. As of July, all three metros led the U.S. industrial market for price per square foot and transaction volume, a recent CommercialEdge report shows. Inland Empire was at the forefront, with a $2.8 billion deal volume year-to-date through July, followed by Los Angeles ($1.8 billion) and the Bay Area ($1.4 billion).

Eastdil Senior Managing Director Steve Silk, Managing Director Jay Borzi, Director Adam Pastor and Christina Buhl with Industrial Equity Sale facilitated the deal for the seller.

Westcore’s industrial expansion

The Odyssey Portfolio brings Westcore’s assets under management in the U.S. to more than $4 billion and 25 million square feet. The real estate investment company focuses on industrial properties since its founding in 2000.

During the first half of the year, the company made several purchases in the Southwest, with a main focus on its Texas portfolio. Westcore entered the Fort Worth market in April with the acquisition of three buildings at North Quarter 35, totaling 485,000 square feet. The deal was followed by two additional purchases in Fort Worth, namely the acquisitions of the 301,120-square-foot Rockwall Distribution Center and the Railhead Business Station, a 519,905-square-foot, Class A industrial campus.

The post Westcore Adds 3.5 MSF to California Footprint appeared first on Commercial Property Executive.

The building is situated within Inland Empire’s Corona, Calif. Image courtesy of Cushman & Wakefield

BDK Logistics has signed a 114,190-square-foot lease agreement, fully occupying a Class A industrial building in the Inland Empire’s Corona, Calif. Cushman & Wakefield negotiated the transaction on behalf of the landlord, concept furniture and design company Scandinavian Designs, CommercialEdge data shows.

Located at 1161 Olympic Drive, the freestanding one-story industrial building features 28-foot clear heights, a two-level office build-out component, sky lights, 20 dock high doors, two grade level doors, dock bumpers, a truck court and 127 parking spots, according to the same source.

Built in 1993, the concrete facility rises on approximately 5 acres, close to Interstate 15, providing easy access to Los Angeles, which is within 51 miles from the asset. The property is also 15 miles from Riverside, Calif., and 30 miles from John Wayne Airport in Santa Ana, Calif. Cushman & Wakefield’s team led by Director Brett Lockwood and Vice Chairman Rick Ellison represented the landlord. 

According to a recent CommercialEdge report, the Inland Empire topped the nation’s metros for year-over-year industrial in-place rent growth. With a significant increase of 17.4 percent, the market was followed by Los Angeles (with 13.2 percent), Boston (10.3 percent) and Orange County (10.0 percent), while the national in-place rents went up by an average of 7.4 percent.

Earlier in July, Stream Realty Partners and Colliers negotiated another full-building lease in the area. CRST The Transportation Solution Inc. signed a long-term deal at a 125,480-square-foot industrial facility in Ontario, Calif., where the company plans to open its West Coast regional headquarters. Realterm is the property’s owner.

The post Logistics Company Fully Occupies Inland Empire Facility appeared first on Commercial Property Executive.

Iconic Equities’ IOS project will take shape on 5.7 acres in Fontana, Calif. Image courtesy of JLL

Iconic Equities has received $16.2 million in senior financing for an industrial outdoor storage project in Fontana, Calif. JLL Capital Markets worked on behalf of the borrower to secure the financing through SG Capital Partners.

Located at 8247 Lime Ave., the development will comprise a truck yard and a 12,500-square-foot distribution facility. The 5.7-acre property is close to interstates 15 and 10 and within 66 miles of Los Angeles International Airport and the Port of Los Angeles. Ontario International Airport is roughly 10 miles southwest.

Despite current economic conditions, e-commerce is still growing, driving tenant demand for industrial outdoor storage assets, a recent Marcus & Millichap report shows. IOS properties recorded some of the lowest vacancy rates, below 3 percent on average as of March, the same report reveals.

Since the beginning of the year, several joint ventures were created for the acquisition and development of new IOS products. One of these partnerships emerged in April, when Centerbridge Partners joined forces with Dalfen Industrial, planning to invest in markets with major ports and key logistics nodes.

In March, GreenPoint Partners launched a $500 million IOS storage platform, with GCM Grosvenor as its main investor. The investment funds will be used for acquisition of semi-truck parking and trailer storage assets across the U.S.

The post Iconic Equities Gets Financing for Inland Empire IOS Project appeared first on Commercial Property Executive.

Birtcher Logistics Center Rialto. Image courtesy of Birtcher Development

Birtcher Development has begun construction on Birtcher Logistics Center Rialto, a 492,410-square-foot facility in Rialto, Calif. Fullmer Construction is the project’s general contractor alongside HPA Inc. heading up architecture. Completion is expected in the first quarter of 2024.

The new high-cube facility is taking shape at 350 W. Valley Blvd. on a roughly 8.5-acre lot, CommercialEdge data shows. Its features are set to include 40-foot clear heights, 62 dock-high doors, two grade-level loading doors, 92 trailer parking spaces, 287 car parking spaces, ESFR sprinklers and a fully secured 185-foot truck court.

READ ALSO: Construction Spending Booms Across the Board

Birtcher Logistics Center Rialto will also comprise 5,000 square feet of ground-floor office space, in addition to a 5,000-square-foot mezzanine. As part of Birtcher’s commitment to create assets that contribute toward carbon reduction, the sustainable development will feature carbon sequestration and greenhouse gas offset programs.

Other sustainable components of the project will be electric vehicle chargers, concrete paving with a high Solar Reflective Index, equipment and appliances certified by Energy Star and EPA-certified Watersense plumbing equipment. In addition, the roof will be solar ready.

Convenient location within the Inland Empire

Situated in San Bernardino County, tenants will be close to other distribution centers such as Amazon, Target, Staples, Monster Energy and Under Armour. Ontario International Airport is 13 miles away.

To contribute toward Rialto’s truck traffic laws, Birtcher has made commitments to provide the funding to employ two commercial code enforcement officers as well as purchase a truck scale. The company will, along with the facility’s future tenant, also contribute annually to the Rialto community and residents on local matters. DAUM Commercial’s Eric Burney and Eric Fikse are the project’s listing brokers.

Last month, Birtcher Development obtained a $49.2 million construction loan for another industrial facility in California. The upcoming 330,048-square-foot warehouse in Fontana is set to feature 36-foot clear heights, 51 dock-high doors and a 185-foot truck court. The delivery date for the distribution center is similarly set for early 2024.

The post Birtcher Breaks Ground on Inland Empire Industrial Project appeared first on Commercial Property Executive.

1090 E. Belmont St. Image courtesy of Stream Realty Partners

CRST The Transportation Solution Inc. has signed a full-building, long-term lease at one of Realterm’s Class A industrial buildings in Ontario, Calif., within the Inland Empire’s Airport submarket. Stream Realty Partners negotiated on behalf of the tenant, while Colliers represented the ownership.

CRST will open its West Coast regional headquarters at the location. The space will also serve as a logistics center and truck maintenance facility.

Located at 1090 E. Belmont St., the 125,480-square-foot distribution center includes 30-foot clear heights, two office components, ESFR sprinkler systems, sky lights, 66 dock-high loading doors, two grade-level doors, 126 vehicle parking spots and 102 trailer parking spots. The current ownership picked up the asset in 2021 from Osterkamp Transportation Group for $61 million, CommercialEdge data shows.

READ ALSO: Harnessing the Power of Port Markets: the Optimistic Stance on Industrial

Situated on an 11-acre lot, the cross-dock facility is close to interstates 10 and 15, as well as to U.S. highways 60, 10 and 91, 3.3 miles from Ontario International Airport and within 60 miles of the ports of Los Angeles and Long Beach.

Stream Realty Partners’ team of Managing Director Jordan Decker and Senior Associate Adrian Boone represented CRST during negotiations, assisted by Cushman & Wakefield’s team including Executive Director Kyle Kehner and Senior Director Brice Larson. Colliers Vice Chairmen Clyde Stauff and Jace Gan represented Realterm.

Strong fundamentals in the Inland Empire

According to a recent CommercialEdge report, the Inland Empire had one of the largest industrial pipelines in the West Region, with 33.1 million square feet underway as of May, accounting for 5.3 percent of its total stock. The market also recorded one of the lowest vacancy rates in the region, at 2.2 percent, followed by Los Angeles (3.4 percent) and Phoenix (3.7 percent).

Elsewhere in the Inland Empire, CapRock Partners announced last month its plans for CapRock Global Logistics, a 500,000-square-foot warehouse facility in Moreno Valley, Calif. The firm also completed two industrial projects in Norco, Calif., totaling nearly 1.1 million square feet.

The post Realterm Secures 125 KSF Tenant in the Inland Empire appeared first on Commercial Property Executive.

Harvill Logistics Center. Image courtesy of MDH Partners

MDH Partners has purchased Harvill Logistics Center, a 333,570-square-foot industrial facility in Perris, Calif. According to Riverside County public records, the asset traded for $112.3 million. The seller was a joint venture between Blumenfeld Development Group, Declaration Partners and CH Realty. The building is fully occupied by global health-care company Cypress Medical Products.

The same source shows that the asset previously traded in 2021 for $57.5 million, when it was sold by developer Rockefeller Group.

Completed in 2021, Harvill Logistics Center is a one-story concrete building with 36-foot clear heights, two grade level doors and 46 dock-high doors, CommercialEdge data shows. The Class A property also includes a two-story office component of approximately 7,976 square feet, 64 trailer parking spots, 191 vehicle parking spaces and a concrete truck court.

Situated on 16.9 acres at 21500 Harvill Road, the asset has immediate access to Interstate 215 and is 17 miles from Riverside, Calif., 27 miles from SBD International Airport and within 55 miles of Irvine, Calif. Additionally, the nearby Cajalco Expressway provides easy access to Santa Ana, Calif., and Anaheim, Calif., as well as to Los Angeles.

Growing California footprint

MDH Partners Vice President of Acquisition Houston Hawley and Managing Director Georga Rowe arranged the transaction. With this investment, the company’s California footprint increased to more than 460,000 square feet.

Nationwide, the Atlanta-based company purchased more than 5 million square feet of industrial space since the beginning of 2023, including a 1.4 million-square-foot portfolio in the Atlanta and Memphis, Tenn., metro areas.

In April, MDH paid $67.5 million for a 670,914-square-foot industrial facility in Fort Worth, Texas. Van Trust Real Estate sold the fully leased asset.

The post MDH Pays $112M for Inland Empire Logistics Center appeared first on Commercial Property Executive.

Rendering of CapRock Global Logistics. Image courtesy of CapRock Partners

CapRock Partners has announced plans for CapRock Global Logistics, an approximately 500,000-square-foot, LEED-certified warehouse facility within the World Logistics Center master-planned industrial park in Moreno Valley, Calif. The company purchased the 22-acre development site in an off-market deal with Highland Fairview.

CapRock Global Logistics will feature 36-foot clear heights, a 10,000-square-foot, two-story office component, a secured concrete yard, 65 dock-high doors, 88 trailer parking spots and 339 vehicle parking spots. The project will be designed to cater to the needs of manufacturing, distribution and e-commerce users.

Situated within a megadevelopment

The development site is situated close to World Logistics Center’s gateway and to interstates 215 and 10, 16 miles from Riverside, Calif., 18 miles from San Bernardino International Airport and within 52 miles of Anaheim, Calif. The property will be situated within a 1.5 hour drive from the ports of Long Beach, Calif., and Los Angeles, while also providing easy access to 11 states, representing a population of nearly 80 million people.

World Logistics Center is a 2,610-acre master-planned industrial park developed by Highland Fairview. At full build-out, the multi-phase development will become the largest logistics hub in North America, with the addition of more than 40 million square feet of industrial space to the Inland Empire East submarket. Completion is scheduled for 2030.

READ ALSO: Expanding Into Industrial: Diversifying for Long-Term Success

A Stream Realty Partners team led by Senior Vice Presidents Stefan Pastor and Brad Yates assisted CapRock Partners during the land acquisition, while Southland Commercial Real Estate’s Principal Mark Repstad negotiated on behalf of the seller and developer of World Logistics Center.

CapRock continues to be active in Central and Western U.S., with recent completions in the Inland Empire West submarket. Earlier thin month, the company completed the construction of Palomino Ranch Business Park’s Phase I and of Saddle Ranch South, two LEED Silver-certified industrial developments totaling 1.1 million square feet. The company is also about to deliver I-15 Logistics Center, a 1.2 million-square-foot Class A industrial project in Fontana, Calif.

The post CapRock to Build 500 KSF Inland Empire Project appeared first on Commercial Property Executive.

Birtcher Logistics Center Fontana. Image courtesy of JLL Capital Markets

Birtcher Development has obtained a $49.2 million loan for the construction of Birtcher Logistics Center Fontana, a 330,048-square-foot industrial facility in Fontana, Calif.

JLL Capital Markets worked on behalf of the borrower to secure the three-year note with two one-year extensions. Hartford Fire Insurance Co. provided the funds, according to San Bernardino County records.

At the beginning of the year, the company received entitlement approval for the development. Construction began last month and the project has a delivery date set for the first quarter of 2024. Upon completion, the distribution center will feature 36-foot clear heights, 51 dock-high doors, a 185-foot truck court and 85 trailer parking stalls.

READ ALSO: Harnessing the Power of Port Markets: Black Salmon’s Optimistic Stance on Industrial

The property is taking shape at 10958 Banana Ave., at the Southwest corner of Banana and Santa Ana Avenues. The 13-acre development site is in the Inland Empire market, some 16 miles from San Bernardino and 12 miles from Riverside. The facility will have access to the Southern California Freeway System through interstates 10 and 15. Trader Joe’s, Home Depot and Walmart have logistics and distribution centers in the surrounding area.

The JLL team that arranged the financing included Senior Managing Director Greg Brown, Senior Director Peter Thompson and Analyst Spencer Seibring.

Inland Empire industrial demand

In the first four months of this year, the Inland Empire had 32.6 million square feet of industrial space under construction, representing 5.2 percent of stock, a CommercialEdge report shows. Over the last few months, several projects received funding or were completed in the market.

Lovett Industrial landed $24.9 million in construction financing for Rialto II, an industrial project in Rialto, Calif. JLL Capital Markets worked on that deal as well and secured a loan from American Realty Advisors.

CapRock Partners added 1.1 million square feet to its existing inventory with the completion of two industrial properties in Norco, Calif.

Trammell Crow Co. and Washington Capital Management also wrapped up the second phase of Columbia Business Park which encompasses 374,000 square feet and is located in Riverside, Calif.

The post Birtcher Lands $49M for Inland Empire Development appeared first on Commercial Property Executive.

1101 California St. Image courtesy of North Palisade Partners

North Palisade Partners has acquired a 17-acre site in Redlands, Calif., for $44.5 million. The land previously accommodated a waterpark that was vacated in 2018 and will be transformed into a Class A warehouse distribution facility.

Lee & Associates Principal Hunter Warner brokered the transaction on behalf of both the buyer and the seller, identified by Commercial Observer as an LP named The California Gateway.

READ ALSO: Top 5 Markets for Industrial Transactions in 2022

Situated at 1101 California St., along the 10 Freeway, the facility will take shape in the Inland Empire East submarket of Southern California. According to a recent CommercialEdge report, the submarket had a vacancy rate of only 1.9 percent as of April.

Inland Empire investment activity shows no signs of slowing down

Due to persistent demand for warehouse distribution space, investors continue to participate actively in the market. The same report also indicated that the Inland Empire market accounted for the highest deal volume in the country this year through April, with $1.6 billion in industrial assets changing hands. The market’s proximity the Ports of Los Angeles and Long Beach, combined with the region’s substantial consumer base, is anticipated to be a persistent driving force in the industrial market.

In a prepared statement, Joe Mishurda, founder & managing partner of North Palisade, highlighted Inland Empire’s consistent position as one of the leading industrial markets in the country over the past five years.

Brookfield Asset Management is also among the most active players in the area. Earlier this year, the company acquired an 1.8 million-square-foot Class A industrial campus in Cherry Valley, Calif., through one of its funds. Hillwood Investment Properties and CBRE Investment Management also purchased 364 acres in a $559 million deal. The site will house the first phase of Speedway Commerce Center, a multi-building logistics campus that is set to span 6.6 million square feet.

The post North Palisade Partners Pays $45M for Inland Empire Site appeared first on Commercial Property Executive.

Palomino Ranch Business Park Phase I. Image courtesy of CapRock Partners

CapRock Partners has completed the construction of two industrial properties in Norco, Calif., totaling approximately 1.1 million square feet. The developer finished work on the first phase of Palomino Ranch Business Park, comprising eight buildings, along with Saddle Ranch South, which encompasses three buildings.

The owner hired Lee & Associates to handle leasing at Palomino Ranch and JLL for Saddle Ranch South.

READ ALSO: Manufacturing’s Comeback Boosts Industrial Space Demand

The first phase of Palomino Ranch Business Park comprises roughly 700,000 square feet across 44 acres, located at 1700-1910 Mountain Ave. The buildings range between 57,000 and 160,000 square feet of industrial space, with an additional 50,000 square feet of office space. Features include 30- to 36-foot clear heights, ESFR sprinkler systems and truck courts with up to 185-foot depths. The first phase of Palomino Ranch is LEED Silver certified. The developer secured a full-building lease for the 67,400-square-foot Building 9.

The second phase of construction is expected to start this month and will encompass an additional 750,000 square feet, while the third will bring 533,000 square feet, with construction scheduled to begin in the third quarter.

When completed, Palomino Ranch Business Park will be a 112-acre master-planned industrial campus, the largest one in the city’s history, with approximately 2 million square feet spread across 24 buildings. The project was CapRock’s third ground-up development in Norco and received $200 million in financing from American International Group.

The project is 2 miles north of the intersection of Interstate 15 and Freeway 91, 13 miles from Ontario International Airport and within 55 miles of Los Angeles International Airport.

Lee & Associates’ team marketing Palomino Ranch Business Park for lease comprises Senior Vice Presidents Jeff Ruscigno and Paul Earnhart, together with Senior Vice Presidents & Principals Brian Pharris, Austin Hill, Ryan Earnhart and Jeff Smith.

Saddle Ranch South

Saddle Ranch South. Image courtesy of CapRock Partners

CapRock’s Saddle Ranch South is roughly 2 miles north, at 3000, 3050 and 3100 Horseless Carriage Drive. Its buildings range between 100,000 and 155,000 square feet. Features include 32-foot clear heights, 12 to 14 dock-high doors, ESFR sprinkler systems, 27 trailer parking spots, 22,160 square feet of total office space and 304 vehicle parking spots.

Designed for local and regional distribution and manufacturing companies, the industrial campus is 34 miles from John Wayne Airport and roughly 55 miles from the ports of Long Beach and Los Angeles. The company has recently secured a full-building lease at Saddle Ranch South’s Building 2, totaling 119,641 square feet, which brought the project to 32 percent occupancy.

JLL Executive Vice President Cody Clayton, Senior Vice President Scott Coyle, Executive Managing Director Patrick Wood and Managing Director Eric Chou are the exclusive leasing agents in charge of the project.

The post CapRock Completes 1.1 MSF Inland Empire Projects appeared first on Commercial Property Executive.

The River at Rancho Mirage. Image courtesy of CBRE

Dave & Buster’s has signed a 22,982-square-foot lease at CL Investment Group’s The River at Rancho Mirage, a 227,000-square-foot retail property in Rancho Mirage, Calif. CBRE brokered the transaction. The restaurant will be inaugurated at the location in the third quarter of this year.

According to a recent CBRE report, the retail rent growth in the first quarter of this year continued to surpass the 10-year average, with a year-over-year increase of 2 percent, driven by the neighborhood, community and strip center segment. While power center rents remained stable, rents for lifestyle centers and malls experienced a decline.

A Riverside County retail property

The lifestyle and entertainment center came online in 2001 at 71800 Highway 111, in an area where the daily car traffic amounts to more than 67,500 vehicles. CL Investment Group picked up the Riverside County asset in 2014 for $65 million, according to CommercialEdge data.

The River at Rancho Mirage encompasses a 1,100-foot river water feature, public sitting areas, walkways and a 100-seat outdoor amphitheater. Additionally, the retail center encompasses 20,000 square feet of office space.

Century Theatre, The Cheesecake Factory, P.F. Chang’s and Yard House are the property’s anchor tenants. Verizon, Tesla, Starbucks, Bath & Body Works and Ben & Jerry’s also have leases at the shopping center, the same data provider shows.

CBRE Vice President Marco Rossetti and Senior Vice President Walter Pagel represented the landlord in the lease signing, while Senior Vice President Scott Riddles, First Vice President Derek Fitch and Senior Associate Rob Crumly brokered the deal on behalf of Dave & Buster’s.

The post Dave & Buster’s Inks Inland Empire Lease appeared first on Commercial Property Executive.

Meadows Village Center. Image courtesy of CBRE

RA Centers has purchased Meadows Village Center, a 67,336-square-foot grocery-anchored retail center in Temecula, Calif., in a private 1031 exchange. CBRE arranged the $27.7 million transaction on behalf of the seller, funds managed by affiliates of Fortress Investment Group LLC.

Anchored by Baron’s Market, Wells Fargo and Palomar Health, Meadows Village Center has a diverse mix of local, national and regional tenants. The roster includes Starbucks, Subway, Crumbl Cookies, Alberto’s Mexican Food, UPS Store, Fight Sports Club and Pacific Dental, among others. The retail asset was 96 percent leased at the time of sale.

Completed in 2006, Meadows Village Center encompasses six buildings spread across an 8-acre site, according to CommercialEdge information. The property has recently underwent renovations and upgrades to the common areas, landscaping and signage.

Located at 31963 Rancho California Road, in the Southwest Riverside County submarket, the neighborhood center is less than 4 miles east of Interstate 15. The property is at the gateway of Temecula Wine Country, a region receiving more than 3 million visitors annually.

CBRE Senior Vice President Jimmy Slusher, Vice Chairman Philip Voorhees and Associate James Tyrrell represented the seller. Despite various challenges, the retail real estate sector has started to show broad strength in the first quarter of this year, a recent CBRE report shows.

The post Inland Empire Shopping Center Trades in 1031 Exchange appeared first on Commercial Property Executive.

1501 Sherborn St. Image courtesy of Colliers

Kearny Real Estate Co. has sold Corona Lakeside Logistics Center, a roughly 730,000-square-foot industrial campus in Corona, Calif., for $325 million. The buyer was GLP Capital Partners, according to Commercial Observer. Colliers arranged the deal that marks the largest ground-lease ownership transfer in Inland Empire’s history.

The transaction was also GLP Capital Partners’ second Riverside County investment in the last six months. In December, the company paid $90 million for a 354,810-square-foot industrial facility in Perris, Calif.

A recently completed industrial campus

Kearny broke ground on Corona Lakeside, one of the largest speculative developments in the Inland Empire, in 2021. CommercialEdge data shows that the developer took out a $59 million construction loan from Wells Fargo Bank for this endeavor.

At the time, the property was already subject to a fixed-rate ground lease; Colliers had structured the deal between the developer and fee-ownership in 2019.

READ ALSO: Why CapRock Maintains Cautiously Optimistic Outlook for Industrial Development

Completed this year, Corona Lakeside comprises five buildings, ranging between 70,586 and 205,235 square feet, with 32- to 36-foot clear heights and a total of 109 dock-high loading doors. The property also includes ESFR fire sprinklers, 141 trailer parking spaces and 1,180 car parking spaces.

The 39-acre campus is at 1501 Sherborn St., close to the intersection of Interstate 15 and State Route 91 in Riverside County. Corporate neighbors in the surrounding area include US Foods, Amazon, FedEx, Vans and Fleetwood, among others.

The Colliers team which facilitated the deal included Vice Chairmen Michael Kendall and Richard Schwartz, Senior Vice President Gian Bruno, Executive Vice President Joey Reaume and Vice President Kenny Patricia.

The Inland Empire, a leader for industrial sales

Despite a slowdown in transaction activity across the U.S. in the first quarter of 2023, the Inland Empire’s industrial sector recorded $1 billion in transactions as of March, ranking second after the Bay Area, according to the latest CommercialEdge report. One of these deals, which closed in February, involved a 1.8 million-square-foot industrial property in Cherry Valley, Calif.

The same report shows the Inland Empire’s industrial market registered the highest rent growth in the nation on a year-over-year basis: The 16.3 percent hike was more than double the national average of 7.1 percent. The area still had one of the lowest vacancy rates in the nation, at 1.7 percent.

As for industrial development, the market had 27.1 million square feet under construction as of March, accounting for 4.4 percent of stock. One of the area’s major projects is a 6.6 million-square-foot logistics campus to take shape in Fontana, Calif. Last month, Hillwood Investment Properties and CBRE Investment Management paid $559 million for the 364-acre site that will host the development’s first phase.

The post Kearny Real Estate Sells Inland Empire Industrial Campus for $325M appeared first on Commercial Property Executive.

Jon Pharris, Co-Founder & President, CapRock Partners. Image courtesy of CapRock Partners

Even with slightly increasing vacancy rates brought on by record levels of new supply, demand for industrial space remains strong. Developers continue to feed the pipeline, with 691 million square feet under construction across the country as of January, CommercialEdge data shows. Ten markets account for 40 percent of the development activity, according to the same data provider, with Dallas and Phoenix having the largest pipelines.

One of the companies that has been very busy lately is CapRock Partners. The firm has several megadevelopments underway in Western U.S., including in the Phoenix area, but also in the Inland Empire, historically regarded as a key industrial market.

Commercial Property Executive asked Co-Founder & President Jon Pharris to share details about his company’s largest projects, and also touch on trends shaping the Western industrial market, tenants’ needs today and the outlook for the sector that has been viewed so far as the darling of commercial real estate.

READ ALSO: Semiconductor Boom Continues to Boost CRE

Construction is well underway on the initial phase of your 3.4 million-square-foot CapRock West 202 Logistics project in Phoenix. What challenges has the city’s largest spec development posed so far?

Pharris: Currently, the construction of the first five buildings—which total 2.7 million square feet—is underway, and we expect it to be completed by the summer of 2023. Despite the uncertainty in the economy, our leasing activity remains strong, and we are negotiating with several potential customers.

Developing a project of this scale is not without challenges, but our team of skilled professionals is well-equipped to navigate around them and work with all stakeholders, including municipalities and technical specialists, to find solutions.

One specific challenge we faced in developing CapRock West 202 Logistics was the requirement from the city to construct a private road that will later become a public right-of-way. Our team has coordinated with federal agencies and relocated various utilities and easements to accommodate this requirement, which was a complex task that impacted multiple properties in the Phoenix area.

A year ago, you broke ground on another large development—the 2 million-square-foot industrial project in Norco, Calif. How is that going? 

Pharris: Palomino Ranch is a master-planned business park consisting of 24 buildings with a total area of approximately 2 million square feet, spread across 110 acres in the Inland Empire West. This project is being developed in three phases, and CapRock is nearing completion of the first phase, which includes eight buildings totaling 700,000 square feet. The second phase is expected to commence next year.

Located near the intersection of two heavily trafficked freeways, interstates 15 and 91, Palomino Ranch is in an infill location close to both Los Angeles and Orange County. However, in the beginning, the site posed a challenge as it lacked the sufficient infrastructure to support a large-scale development like Palomino Ranch.

Given its position within the heart of the Norco community, it was important for us to create a thoughtful business park that would not only cater to the needs of the area’s growing population but also respect Norco’s history and heritage. To this end, we worked closely with the local community and elected officials to enhance the infrastructure surrounding the project site. Our team has incorporated several improvements in the development of Palomino Ranch, such as widening adjacent streets, making regional storm drain improvements, installing streetlights, creating a network of horse trails, and incorporating a western motif to reflect the equestrian lifestyle of the community. These initiatives not only help to improve the city of Norco but also offer amenities that future tenants would expect.

CapRock believes that Palomino Ranch will be a landmark development that will contribute to the growth and prosperity of the Norco community.

You have a lot of experience when it comes to working on megadevelopments. How do you tackle the multitude of problems that come in every day when developing projects of such magnitude?

Pharris: An important aspect of building a successful megadevelopment is initiating and maintaining effective communication and collaboration with all stakeholders from a project’s beginning. We make it a priority to keep all parties involved, including elected officials, community representatives, contractors, investors, brokers and lenders, informed and engaged throughout the development process.

CapRock West 202 Logistics. Image courtesy of CapRock Partners

What do industrial tenants want today? Are there any changes you’ve seen in pre-leasing activity?

Pharris: Given the sustained high demand and low vacancy rates for industrial space nationally, coupled with the fact that CapRock invests and develops in some of the tightest submarkets in the country, we continue to see strong pre-leasing activity.

Tenant needs are evolving as the economy continues to adjust after the supply chain shocks of COVID-19. As corporations shift their distribution strategies, demand continues for modern, sustainable, energy-efficient facilities in more locations throughout the West.

To meet the demands of tomorrow’s logistics, distribution and manufacturing corporations, CapRock is ‘futureproofing’ its properties as much as possible by incorporating features such as increased clear heights, ample trailer storage, accessible power, secure truck courts, adequate parking, improved traffic flow and sustainable landscaping. Moreover, CapRock places great importance on environmental stewardship, and we are committed to designing each project in a way that minimizes the impact on the natural environment, while meeting or exceeding environmental mandates.

Phoenix and the Inland Empire are two of the areas that you’re most active in. What would you say are each of these markets’ most in demand areas today? How do they compare to each other? 

Pharris: While they are separate industrial markets, California’s Inland Empire and Phoenix work congruently as an integral part of the North American supply chain. This is mainly due to their connection and proximity to the Ports of Los Angeles and Long Beach.

In recent years, Phoenix has emerged as a premier destination for Fortune 1000 companies looking to increase their inventory and distribution capacities. This is supported by the city’s rapid population growth, strong economic fundamentals, business-friendly environment, temperate climate and lack of available product throughout California’s major markets. Its geographic position—within a single-day’s drive to primary consumer markets and logistics hubs in Southern California, Dallas, Denver and Salt Lake City—has led it to become a critical logistics node.

Compared to California’s land-constrained markets, Phoenix’s ample supply of developable land offers more opportunities for growth at a lower cost. This is reflected in the leasing rates for industrial properties, which have increased by about a third of the rate seen in California over the past 12 to 18 months.

In California, population centers are highly land constrained and industrial real estate demand is exceeding supply. The Inland Empire West and East submarkets are now considered infill, and tenants seeking big box distribution centers in excess of 500,000 square feet are evaluating projects further east along the I-10 corridor in Beaumont, Banning and the Coachella Valley, as well as some locations in the High Desert.

Most of the tenant activity in Phoenix is concentrated in the Southwest Valley submarket or Loop 303 corridor due to its proximity to California and access to a high-quality labor force. Phoenix’s Southeast Valley submarket is capturing approximately one third of the MSA’s tenant demand due to the presence of a highly educated workforce and its proximity to Queen Creek, one of the fastest-growing cities in the U.S.

Palomino Ranch. Image courtesy of CapRock Partners

Are there any trends that are bound to continue to define these metros’ industrial markets in 2023 and beyond?

Pharris: In California, the activity in and around the port markets supports a sustained demand for modern, efficient industrial warehouse space. However, creating a new supply of industrial properties in the incredibly constrained Inland Empire market will likely be challenging for the foreseeable future due to the region’s high development costs, land scarcity, government regulations and multi-year process to obtain entitlements. This will continue to place upward pressure on market rents and property valuations.

Phoenix is a beneficiary of these issues in California as businesses seek solutions to their industrial space needs. This logistics market serves as an extension of the Inland Empire in many ways and also an alternative. For expanding businesses, Phoenix offers a growing population, diverse economy, significant corporate investment such as the $60 billion project by TSMC, and the presence of other major employers like Intel that contribute to the MSA’s ongoing job growth and economic development, further driving demand for industrial space.

On a broader perspective, what are your expectations for the industrial sector going forward? How do you expect the brewing downturn to play out for the sector?

Pharris: CapRock is approaching the industrial real estate sector with cautious optimism. Despite the possibility of a recession, the industrial sector is entering this period with healthy fundamentals, including strong leasing activity and high corporate demand. As the economy evolves, we expect that certain development projects in the market may be delayed or become unfeasible due to changes in financing costs and investor return expectations, leading to a balanced supply and demand in the next 12 to 24 months.

The industrial sector is benefiting from several key trends, such as the growth of e-commerce, the reshoring of manufacturing, and a desire for increased inventory to manage supply chain disruptions.

We believe that industrial real estate may be the strongest institutional real estate asset class in the current market conditions. We also recognize some potential challenges in the value-add industrial segment, particularly with properties that were acquired with floating rate debt at market peak. As these short-term loans mature, borrowers may face the need for additional capital or be forced to sell due to the projects’ weakened financial position.

READ ALSO: Top 5 Markets for Industrial Transactions

What are your goals for this year?

Pharris: CapRock Partners specializes in the acquisition, development, and management of industrial real estate properties across three platforms: value-add, opportunistic and large-scale, ground-up logistics developments. We are proud to have established partnerships with some of the top institutional investors in the industry, including sovereign wealth funds, life insurance companies, pension funds, university endowments, and more.

Our assets under management have seen substantial growth over the past year, reaching close to $3 billion at the end of 2022, and are expected to reach $4 billion by the end of 2023, with the completion of some of our ongoing developments.

As part of our strategic growth plan, we are expanding our footprint into new markets with strong economic fundamentals, starting with the establishment of a new office in the Dallas-Fort Worth area in 2022. We are now seeking to further our presence in the Central region, with a focus on Texas cities such as Dallas, Austin and Houston, as well as Denver, and will be hiring a dedicated team to lead our acquisition and development efforts in these markets.

Is there anything else about the industrial market you would like to add?

Pharris: We are keeping a close eye on the industrial real estate market in 2023 and expect to see pockets of concern in certain submarkets that may have overbuilt in the last couple of years, especially in regions that have not experienced significant rental rate growth. However, we remain cautiously optimistic about the overall outlook for the industry. Our portfolio of best-in-class industrial assets, combined with our prudent underwriting practices, allows us to weather potential market fluctuations.

Our main focus is on managing our current portfolio, completing construction on approximately 7 million square feet in the Western U.S., commencing construction on another two to three million square feet in 2023, while also pursuing acquisitions in markets with positive economic fundamentals for logistics.

As the cost of borrowing increases and loan proceeds decrease, we anticipate that there may be increased distress in the market, but we are well-prepared to navigate through any challenges.

The post Why CapRock Maintains Cautiously Optimistic Outlook for Industrial Development appeared first on Commercial Property Executive.

Image by Eduardo Soares via Unspalsh.com

Longpoint has purchased Cardenas Marketplace, a 66,006-square-foot shopping center in Montclair, Calif., in San Bernardino County. CBRE represented the seller in the $22.7 million transaction. CommercialEdge shows Pacific Properties Group as the previous owner.

Completed in 2020, the Inland Empire center encompasses four buildings spread across a 5-acre site. The shopping center is anchored by Cardenas Market, with other tenants at the property including Wendy’s and AT&T. The center was 91 percent leased at the time of the sale.

The grocery-anchored retail property is located in the Ontario-Chino submarket. The neighborhood center is situated at the intersection of Central Avenue and Holt Boulevard, in an area where the daily traffic count reaches approximately 22,000 vehicles, according to Longpoint. Cardenas Marketplace serves a population of 215,369 residents within a 3-mile radius, the same source shows.

Senior Associates Vanessa Haddad and Masih Waliyar and Senior Vice President Alan Krueger led the CBRE team working on behalf of the seller.

Cardenas Marketplace represents Longpoint’s eighth acquisition for its recently closed Specialty Grocer Fund I. The firm completed the final closing of the investment vehicle this month, with $225 million in commitments.

The post Longpoint Buys Inland Empire Retail Asset appeared first on Commercial Property Executive.

Columbia II. Image courtesy of Trammell Crow Co.

Trammell Crow Co. and Washington Capital Management, on behalf of their client, have wrapped up construction at the second phase of Columbia Business Park. The 374,000-square-foot Columbia II is located at 300 Palmyrita Ave. in Riverside, Calif.

Similar to the first phase, Columbia II started off on a speculative basis, but subsequently found a tenant. Logistics Plus Warehousing & Fulfillment Inc. signed a five-year lease to occupy the entire building.

The 19-acre Columbia II features 36-foot clear ceiling heights, ESFR sprinklers, 54 dock-high and two ground-level doors, as well as a 185-foot concrete truck court with parking spaces for 92 cars and 42 trailers.

LISTEN TO: Trammell Crow on Sustainable Development

Colliers Senior Executive Vice President Kevin McKenna along with CBRE Executive Vice President David Consani brokered the lease agreement on behalf of the ownership, while Foremost Commercial Real Estate Services President Jeremy Trotter represented the tenant.

Part of a broader development

The 1.5 million-square-foot master-planned Columbia Business Park is located along Riverside’s Hunter Park industrial corridor, providing connectivity to Interstate 215. The 72-acre campus also provides access to the Hunter Park/University of California Riverside MetroLink station.

The developers also plan a third phase, that can accommodate additional parking or another facility of approximately 90,000 square feet.

Completed in late 2017, the 1 million-square-foot Columbia I occupies 46 acres and is located at 490 Columbia Ave. It features 37-foot clear heights, 185-foot-deep secured truck courts, ESFR fire sprinkler systems and dedicated truck queuing lanes.

Columbia I traded in 2019, when ASB Capital Management paid $123.8 million for it, making it one of the largest single-building transactions completed in the Inland Empire at that time.

Other Trammell Crow projects

Earlier this year, Trammell Crow Co., in a joint venture with CBRE Investment Management, finished the construction of Elliot Gateway, a four-building, 516,000-square-foot Class A logistics park in Mesa, Ariz. Just last week, the same partnership wrapped construction at Tracy 205 Logistics Center in Joaquin County, Calif.

Around the same time, together with Clarion Partners, the firm also completed the 571,000-square-foot first phase of 104th Commerce Park, a Class A industrial park in Commerce City, Colo.

In a prepared statement, Trammell Crow Principal Jared Riemer stated that despite a surge in construction activity in the Inland Empire in recent years, the vacancy rate in the market is still around 1 percent at the moment. Riemer added that demand for Class A logistics facilities remains strong, leading to a rise in absorption and rent growth as tenants are attracted to newer, more contemporary buildings.

A recent CommercialEdge report also highlighted the fact that western markets showcased some of the lowest vacancy rates among the country’s leading industrial markets as of February 2023. The same source reveals that the Inland Empire recorded the largest lease spread between market average and new leases, clocking in at 28 percent.

The post Trammell Crow Wraps Phase 2 of 1.5 MSF Inland Empire Project appeared first on Commercial Property Executive.

New Haven Marketplace. Image courtesy of SRS Real Estate Partners

Senior Vice President Pat Kent and Senior Associate Parker Walter of SRS’s Investment Properties Group represented Frontier in the transaction, while Glenn Rudy of Newmark stood in for the buyer. SRS welcomed a bevy of offers from investors eager to add New Haven Marketplace to their portfolio. “The property is in a great location and is a newly built, grocery-anchored shopping center in Southern California. It is very rare that investors have the opportunity to acquire assets like this,” Walter told Commercial Property Executive.

READ ALSO: Designing the Suburbs of the Future

Located on a 10.6-acre site at 3420 E. Ontario Ranch Road, New Haven Marketplace made its debut in 2020, with a 45,000-square-foot Stater Bros. market as its anchor tenant. The Bickel Group Architecture-designed property features a farmhouse style with abundant landscaping and ample communal spaces. The asset holds the distinction of being the first retail center in Ontario Ranch.

Retail the right way

Frontier developed New Haven Marketplace in partnership with CalSTRS and Brookfield Residential, which has spearheaded the delivery of a ready-made audience for the retail destination with the programming of thousands of single-family homes and apartment units at Ontario Ranch. Today, the New Haven Marketplace is 100 percent leased to a diverse group of tenants that includes a host of eateries, Chase Bank, YogaSix yoga studio and market hall Rodeo X, which includes the Brew Haven Brewery.

Grocery anchor, prime location, unique tenancy, Class A status—all of these factors translated into a sale price of approximately $568 per square foot for New Haven Marketplace. The average retail property sale price in the Inland Empire was $302 per square foot in the fourth quarter of 2022, according to a report by Kidder Mathews.

“The pricing and demand for high-quality real estate remain strong in uncertain times,” Walter said. “We expect a flight to quality from investors to assets such as New Haven Marketplace while pricing for assets in tertiary locations and older product will be negatively affected pricewise.”

The post <strong>Inland Empire Lifestyle Center Commands $54M</strong> appeared first on Commercial Property Executive.

Rialto II. Image courtesy of JLL Capital Markets

Lovett Industrial has received $24.9 million in construction financing for the development of Rialto II, a 114,115-square-foot industrial facility in Rialto, Calif.

JLL Capital Markets worked on behalf of the borrower to secure the three-year, fixed-rate loan from American Realty Advisors.

The company acquired the six acres of land in late 2022, with the project slated for completion in September 2023. The development team includes HPA as lead architect and Westland Engineering as the project’s civil engineer.

Upon completion, the industrial facility will feature 36-foot clear heights, two grade-level doors, 12 dock-high doors, a 130-foot truck court, a speculative office with mezzanine space, ESFR sprinklers and 90 parking stalls. Bill Heim and Alex Heim of Lee & Associates will handle marketing and leasing efforts.

The development site is located at 1910 W Renaissance Parkway, in California’s Inland Empire market, 9.3 miles from San Bernardino, Calif., and 52.8 miles from Los Angeles. The industrial project will have access to nearby transportation networks, including Interstates 10, 15 and 215. The ports of Long Beach and Los Angeles are approximately 70 miles away. Major companies in the surrounding area include Amazon, Porsche, Zara and Target.

The JLL team that arranged the financing included Senior Director Peter Thompson, Director Samuel Godfrey and Associate Jordan Leake.

Lovett expands western footprint

Lovett has five active projects in the region, with a pipeline of 4.5 million square feet of future projects, not including 1.2 million square feet under construction. The company is active in southern and northern California, Phoenix, Denver, Las Vegas and Salt Lake City.

Among Lovett’s projects is a 1.7 million square-foot industrial campus in Glendale, Ariz., located within the 1,240-acre Woolf Logistics Center, and Lovett 76 Logistics Center, a 613,758-square-foot industrial project in Brighton, Colo.

The post Lovett Lands Financing for Inland Empire Industrial Asset appeared first on Commercial Property Executive.

13592 Slover Ave. Image courtesy of Alere Property Group LLC

Alere Property Group LLC will soon expand its footprint in Southern California’s high-demand Inland Empire, having just acquired the land for a new 350,000-square-foot warehouse and distribution project. The industrial real estate company purchased just over 17 acres in Fontana, Calif., from CP Fontana, an entity of Clark Pacific, in a deal valued at approximately $38.9 million.

NAI Capital Commercial‘s Richard Lee, Nicholas Chang, Justin Kuehn and Sione Fua represented both Alere and the seller of the two parcels of land. Located at 13592 Slover Ave., just off Interstate 10 in the Inland Empire West submarket, the site is already zoned for industrial development.

READ ALSO: Heightened Industrial Demand Boosts New Lease Rates

The two-building speculative development, referred to as Fontana Corporate Center in documents submitted to the City of Fontana Planning Department, will consist of an approximately 209,400-square-foot facility and a 143,000-square-foot warehouse. Both buildings will include 5,000 square feet of office space each. Alere expects to commence construction of the Fontana project in 2024.

Weathering the storm

Inflationary fears are rearing their ugly head across the commercial real estate market, and the long-thriving industrial real estate sector is no exception. However, the Inland Empire has remained above the fray as one of the most expensive industrial markets in the U.S., and certainly one of the tightest.

“While the economic outlook is uncertain, the scope and relevancy of the Inland Empire has shielded the industrial market from many of the major pitfalls other markets are facing,” according to a fourth quarter 2022 report by CBRE. The numbers tell the story; the region’s industrial vacancy rate remained low at the close of 2022, landing at just 1.1 percent.

Headwinds continue, but the forecast for the Inland Empire market remains bright, even in the face of high levels of new development. All signs indicate that Alere’s project is likely to be well received.

The post Alere Property to Expand Inland Empire Footprint appeared first on Commercial Property Executive.

A rendering of the Speedway project. Image courtesy of CBRE Investment Management

In a $559 million deal, Hillwood Investment Properties and  CBRE Investment Management have purchased 364 acres of land, which will host the first phase of Speedway Commerce Center. Auto Club Speedway sold the property in a deal arranged by Corion Properties.

Hillwood and CBRE Investment Management’s acquisition is of the land under the project, with the firms intending to further invest in the project itself, according to a spokesperson.

The sale of the project’s second phase, encompassing 69 acres, is scheduled to close on or before Dec. 31, 2026.

Upon completion, the multi-building logistics campus will total 6.6 million square feet. Located at 9300 Cherry Ave., in Fontana, Calif., the project sits within the western part of the Inland Empire region in the southern part of the state. CBRE Investment Management Portfolio Manager Mary Lang said, in a prepared statement, that the area is one of the world’s top distribution markets.

Buildings at the site will have 40-foot clear heights, cross-dock loading and 185-foot concrete truck courts, as well as parking for employees and more than 100 acres of excess trailer parking.

READ ALSO: Top 5 Emerging Industrial Markets

Speedway will offer easy access to interstates 15 and 10, as well as the San Bernardino BNSF freight railway’s Intermodal Yard. CBRE Investment Management touted the project’s proximity to the ports of Long Beach and Los Angeles in its statement, which also noted that Inland Empire’s logistics vacancy rate was an attractive 1.2 percent in 2022, with rent growth at 35.4 percent. Fontana itself had a 0.3 percent vacancy rate in 2022, as well as a 36.9 percent rent growth rate.

The post CBRE IM, Hillwood Buy Major Inland Empire Logistics Site for $559M appeared first on Commercial Property Executive.

Rendering of Gateway at Menifee. Image courtesy of Patrinely Group

Patrinely Group, together with affiliates of Dune Real Estate Partners, has broken ground on Gateway at Menifee, a 544,115-square-foot speculative industrial project in Menifee, Calif. KPRS Construction Services serves as general contractor. Completion is expected this December.

The development will encompass three rear-load buildings of 229,934 square feet, 220,606 square feet and 93,575 square feet, respectively. When complete, the property will feature 32- to 36-foot clear heights, 107 dock-high doors and truck court depths of 130 and 190 feet. Brokers Ryan Bos and Colin MacMillan with KBC Advisors, alongside Scott Stewart and Gordon Mize of Lee & Associates, will handle leasing at the property.

READ ALSO: What’s Next for Industrial Development

The 36.4-acre development site is just west of Interstate 215 at 33490 Bailey Park Blvd. in the Inland Empire, close to the I–215/I–15 interchange. Patrinely Executive Vice President Matt Chamberlain said, in prepared remarks, that this Southern Gate parcel was the last one to be approved for pure industrial use.

Founded in 1983, developer Patrinely Group is active across several major markets in the U.S. The company’s portfolio includes approximately 1.1 million square feet of industrial space and some 2.9 million square feet in office properties, CommercialEdge data shows.

A leader of the U.S. industrial sector

In the fourth quarter of 2022, Inland Empire’s new industrial supply amounted to 7.7 million square feet, while 37.8 million were under construction, according to a Colliers report. One of current developments is taking shape on 147 acres in Ontario, Calif., and will total 1.3 million square feet at full build-out.

Rent growth also continued to reach new levels, a 2.9 percent increase from the previous quarter and a 50 percent spike year-over-year, Colliers data shows. Despite new supply surpassing net absorption in the last four consecutive quarters, the vacancy rate was still at a historical low at 0.9 percent, up 20 basis points over the quarter and it is expected to maintain that level in the future due to strong demand.

Earlier this month, NFI Industries renewed its full-building lease at Perris Distribution Center in Perris, Calif. The firm extended its 864,000-square-foot commitment at the industrial warehouse owned by Ares Management.

Investment opportunities are still sought after, with major transactions still taking place despite economic headwinds. A Brookfield Asset Management fund acquired the recently completed I-10 Logistics Center, a 1.8 million-square-foot industrial park in Cherry Valley, Calif.

The post Patrinely Group JV Breaks Ground on Inland Empire Spec Project appeared first on Commercial Property Executive.

The District at Moreno Valley. Image courtesy of JLL Capital Markets

Ledo Capital Group has obtained a $13.4 million loan for the refinancing of The District at Moreno Valley, a 52,081-square-foot, grocery-anchored shopping center in Moreno Valley, Calif. Working on behalf of the borrower, JLL Capital Markets secured the financing through Manufacturers Bank.

A Sprouts supermarket serves as the anchor tenant for The District at Moreno Valley, which was completed last year. Other tenants at the property include KFC, The Joint Chiropractic, WSS and Starbucks.

READ ALSO: What Will Retail Look Like in 2023?

According to Newmark, The District Moreno at Valley spans 30 acres and serves a population of 220,472 within a 3-mile radius. The same source reveals that the retail center is currently undergoing renovations, while an adjacent commercial business park is also being constructed.

Senior Director Matt Stewart, along with Analysts Chris Jaffe and Daniel Skerrett, headed the JLL Capital Markets Debt Advisory team representing the borrower.

Grocery-anchored to go

Situated at the junction of Heacock Street and the 60 Freeway, the shopping center is located in a regional retail trade area and is exposed to a traffic of 58 million vehicles annually, JLL reveals. Moreno Valley Mall is also nearby, less than 2 miles from the property.

As retail investors continued to capitalize on demand for grocery-anchored retail, vacancy dropped to 5.8 percent at the end of the fourth quarter of 2022 from 6.6 percent one year prior, according to a Kidder Matthews report. The same source reveals that the market registered positive absorption during the same time frame.

According to JLL, Moreno Valley is the second-largest city in the Inland Empire when it comes to land area, with ample room available for future residential development, ensuring its position as one of the fastest-growing cities in the state in the long term.

The post Ledo Capital Obtains Refi for Inland Empire Retail Asset appeared first on Commercial Property Executive.

Perris Distribution Center. Image courtesy of Newmark

Supply chain solutions provider NFI Industries has renewed its full-building lease at Perris Distribution Center in Perris, Calif. The tenant extended the 864,000-square-foot commitment at the industrial warehouse owned by Ares Management.

Newmark Executive Managing Directors Mark Kegans and Ron Washle, alongside Managing Director Dean Washle, represented the landlord.

A CommercialEdge industrial report shows that, as of December 2022, the Inland Empire had the most significant rent growth, with rents increasing 14.2 percent last year, above the national average of 6.3 percent. Inland Empire also had the lowest vacancy rate in the country, at only 1.1 percent, followed by Nashville, Columbus, Indianapolis and Los Angeles.

Class A warehouse in East Inland Empire

According to the same data provider, the facility was subject to a construction loan in 2016, of $35.2 million, provided by Associated Bank. Perris Distribution Center is LEED Gold certified.

The two-story building was completed in 2017 and sits on 44 acres. The Class A cross-dock facility is expandable to more than roughly 1.1 million square feet, includes 7,000 square feet of office space, and features 36-foot clear heights, ESFR sprinkler system, LED warehouse lighting, 112 dock-high doors and concrete truck courts. The property offers 298 auto parking spaces and 224 trailer parking spots, with the possibility of increasing that number in an auxiliary parcel.

The warehouse is located at 657 Nance St. and has access to Interstate 215, facilitating the connection to the wider Riverside and San Bernardino counties. Los Angeles is 68 miles away. Industrial neighbors in the area include Home Depot, Amazon, General Mills, Lowe’s, iHerb and Wayfair, among others.

The post NFI Industries Extends 864 KSF Inland Empire Lease appeared first on Commercial Property Executive.

The I-10 Logistics Center. Image courtesy of Shopoff Realty Investments

The joint venture of Shopoff Realty Investments and Artemis Real Estate Partners has sold I-10 Logistics Center, a 155-acre, two-building, 1.8 million-square-foot Class A industrial campus in Cherry Valley, Calif. A Brookfield Asset Management fund acquired the recently completed asset. CBRE represented both parties in the deal.

According to CommercialEdge data, the campus is fully leased by Shein, which plans to hire some 1,000 employees at the facility. The online clothing retailer announced its plans to prelease the entire campus and make it a major hub for national distribution back in September.

A newly completed logistics center

The I-10 Logistics Center broke ground in 2021 at 36500 Cherry Valley Blvd., the developers financing its construction with a $105 million loan from Bank OZK. The campus came online in December 2022.

The park’s buildings span 814,822 and 1,017,845 square feet, respectively, featuring 40-foot clear heights and a total of 296 dock-high doors. The entire complex is LEED Silver-certified, fully powered by a surrounding array of solar panels.

READ ALSO: Investment Matters: Answering the Call of Opportunity

The joint venture also improved the I-10 interchange at Cherry Valley Boulevard to both ease road traffic and enhance the property’s visual appeal. Additionally, the project preserved 85 acres of land as open space and saw the construction of 2 miles of pipes for the use of recycled water for irrigations.

Situated within 1 mile of its namesake, inside the nation’s most in-demand industrial market, the facility provides quick access to the Inland Empire and metro Los Angeles, and has coast-to-coast transportation capabilities. Shopoff President & CEO William Shopoff detailed the value of the assets’ location further, telling Commercial Property Executive, “It is clear the Inland Empire is still a highly sought after location for e-commerce companies. The proximity to the to the ports of Long Beach and Los Angeles, coupled with direct access to I-10 will make this property highly desirable by tenants for decades to come.”

CBRE Vice Chair Barbara Perrier and Vice Chairman & Managing Director Darla Longo, together with Senior Vice Presidents Eloy Covarrubias and Joe Werdein, brokered the transaction.

Brookfield’s logistics buildup

The I-10 Logistics purchase is Brookfield’s latest in a string of recent country-wide investment and development efforts centered around distribution and logistics assets. In December 2022, the firm began the development of Windsor 8 Logistics Center, a 325,170-square-foot facility in East Windsor, N.J.

Earlier that year, in August, Brookfield acquired 161 acres for the construction of Rockland Logistics Center, a 1.2 million-square-foot campus in Suffern, N.Y. Groundbreaking is expected this spring, with completion scheduled for summer 2025.

The post Shopoff Realty JV Sells 1.8 MSF Inland Empire Industrial Park appeared first on Commercial Property Executive.

Birtcher Logistics Center Fontana rendering. Image courtesy of Birtcher Development

Birtcher Development has received entitlement approval for a 330,048 square foot logistics center in Fontana, Calif. The distribution facility, Birtcher Logistics Center Fontana, is set to begin construction in the first quarter.

Situated less than five miles from Interstate 10, I-15, SR-60 and 210 Freeways the property provides easy access to Southern California as well as the greater Inland Empire. The Ontario International Airport is some five miles from the facility as is the Union Pacific Intermodal Yard.

Located on the southwest corner of Banana Avenue and Santa Ana Avenue, the Birtcher Logistics Center Fontana will be approximately 65 miles from the Ports of Los Angeles and Long Beach.

READ ALSO: Trends That Will Shape Industrial Real Estate in 2023

Features in the new property are set to include some 5,000 square feet of ground-floor office space and another 5,000 square feet of mezzanine office space. The facility is anticipated to have 51 dock-high doors, a fully secured 185-foot truck court, 36-foot clear heights, 85 trailer parking spots and 91 car parking stalls.

The Birtcher Logistics Center Fontana is expected to come online in early 2024. Kidder Mathew’s Gerry Harvey and Craig McKenzie are the listing brokers for the new distribution facility.

The first phase of Birtcher Development’s other project in the area, the Birtcher Oak Valley Commerce Center, is also scheduled to be complete in early 2024. Situated in Calimesa, the 2.5 million-square-foot industrial campus will consist of four buildings featuring 40-foot clear heights.

The post Birtcher Plans 330 KSF California Logistics Center appeared first on Commercial Property Executive.

Center Pointe. Image courtesy of JLL Capital Markets

Tourmaline Capital has sold Center Pointe, a 41,461-square-foot, grocery-anchored retail center in Menifee, Calif. JLL Capital Markets brokered the $24.6 million transaction on behalf of the seller. A private investor acquired the asset through a 1031 exchange.

At the time of the sale, the property was 96 percent leased to anchor tenant Sprouts Farmers Market, as well as Wendy’s, Olive Garden, Tacos & Tequila and Paris Nails, among others.

Located at 27281 Newport Road in the Menifee Town Center area, the shopping center is easily accessible from Interstate 215. The six-building retail center was completed in 2021 on a 7.7-acre site, as shown by CommercialEdge.

Managing Director Gleb Lvovich, Senior Director Daniel Tyner, and Managing Director Geoff Tranchina of JLL Retail Capital Markets acted on behalf of the seller.

The staying power of grocery-anchored centers

In a prepared statement, Lvovich said that the Center Pointe sale aligns with a trend observed by JLL, where grocery-anchored shopping centers in prime locations continue to appeal to investors due to their steady income and attractive returns. Tyner added that grocery-anchored retail remains strong, and this deal is an example of the dynamic 1031 exchange transaction activity on the West Coast.

In another recent similar transaction, Gerrity Group sold its grocery-anchored retail center in Las Vegas to a 1031 exchange California buyer. Craig Marketplace changed hands for $41.2 million.

The post Inland Empire Retail Asset Trades in 1031 Exchange appeared first on Commercial Property Executive.

5549 Stockdale Court. Image courtesy of DAUM Commercial

Birtcher Anderson & Davis Associates has sold three Class A industrial buildings totaling 92,000 square feet in Jurupa Valley, Calif. The buyer was AODES USA Inc. DBA AODES, an ATV and UTV manufacturing and distribution company. According to CommercialEdge data, the properties traded for a total of $20.1 million and were subject to a $13.4 million loan, provided by East West Bank.

DAUM Commercial represented the buyer, while Cushman & Wakefield facilitated the deal for the seller. The new owner is planning to move its headquarters to the location.

The ensemble is part of Mt. Jurupa Business Park, a five-building complex, developed by Birtcher Anderson & Davis. The company recently sold the other two facilities as well, for a total of 22.5 million, according to The Registry.

A recent DAUM industrial report shows that Inland Empire’s overall sales volume in the third quarter was down 19.5 percent from the previous quarter. Jurupa Valley reached the highest, $500 million sales volume in the market, at an average price of $450 per square foot, higher than the region’s median price of $365 per square foot.

As of October, Inland Empire was in the lead in terms of rent growth, with an 11.6 percent year-over-year increase, outperforming the national average of 6.2 percent, according to the latest CommercialEdge industrial report.

Recently completed facilities

Completed in 2022, the one- and two-story warehouse and distribution facilities sit on 4.9 acres and feature 28- and 30-foot clear heights, dock-high and ground-level doors, along with ESFR fire sprinkler systems.

Located at 5500, 5549 and 5529 Stockdale Court, 3.5 miles from downtown Riverside, Calif. and 13 miles from San Bernardino, Calif., the complex offers access to Freeway 60 and Interstate 10. Companies in the surrounding area include FedEx, Walmart, Living Spaces Distribution Center and Lineage Logistics, among others.

DAUM Commercial First Vice president Frank Mao brokered the deal for the buyer, while the Cushman & Wakefield team representing the other party included Managing Directors Tal Siglar and Milo Lipson, alongside Senior Associate Daniel Wahl.

The post Birtcher Anderson & Davis Sells 3 Inland Empire Facilities appeared first on Commercial Property Executive.

251 E. Rider St. Image courtesy of Colliers

GLP Capital Partners has acquired Rider Distribution Center, a 354,810-square-foot, single-tenant industrial facility in Perris, Calif. The Class A property changed hands in a $90 million deal, brokered by Colliers. According to CommercialEdge data, the seller was an entity connected to WPT Capital Advisors.

The property is currently fully leased to iDC Logistics, a Los Angeles-based third-party logistics company. Completed in 2019, the facility sits on 16.3 acres and features 36-foot clear height, 47 dock-high doors, a truck court, along with parking spaces for 64 trailers and 183 cars.

Located at 251 E. Rider St., the building is 17 miles from Riverside, Calif., 25 miles from San Bernardino, Calif., offering access to Interstate 215. Other companies in the surrounding area include Whirlpool, Lowe’s, Amazon and Home Depot, among others.

The Colliers team involved in the transaction included Vice Chair Michael Kendall, Senior Vice President Gian Bruno and Vice President Kenny Patricia, alongside Vice Chair Mark Zorn and Executive Vice President Cory Whitman. Kendall exclusively listed the property and represented the seller.

A recent Colliers report shows that industrial investment in the Inland Empire could slow down, due to current economic woes. While having one of the lowest vacancy rates across all U.S. markets, the region’s asking rents reached a record high during the third quarter of 2022, marking a 58 percent increase year-over-year.

Despite predictions of a slowdown, a number of large transactions took place in the past months within the region. KKR paid $137 million for a 281,000-square-foot warehouse in Eastvale, Calif., while TA Realty purchased two Inland Empire facilities for $133.5 million.

The post GLP Snaps Up Inland Empire Industrial Asset appeared first on Commercial Property Executive.

120 Puente Ave.

TA Realty has purchased two Inland Empire industrial facilities for $133.5 million from JCS Properties. The firm paid $92 million for a 253,670-square-foot complex in City of Industry, Calif., and $41.5 million for a 140,276-square-foot warehouse in Corona, Calif. Stream Realty Partners represented the buyer in the off-market transaction.

The deal immediately follows TA’s $90.5 million acquisition of Green Valley Corporate Park, a 415,107-square-foot industrial campus in Fairfield, Calif. Another recent high-profile transaction in the area was Winsford Corp.’s sale of a 106,088-square-foot warehouse in Ontario, Calif., also brokered by Stream.

READ ALSO: Top 5 Markets for Industrial Construction Activity

Completed in 1988 at 451 N. Cota St., the Corona warehouse has 11 dock doors and three drive-in loading bays. The property was 43 percent leased at the time of sale. JCS had purchased the building in 2021 for $30.2 million, CommercialEdge data shows.

The City of Industry facility came online in 1998 at 120 Puente Ave., featuring a mix of warehousing, cold storage and office space. The property features 140- to 220-foot truck courts and an employee training center, as well as a full on-site kitchen and bar area. Classic Beverage of Southern California is the building’s sole tenant, according to CommercialEdge data.

Both buildings are adjacent to the Riverside Freeway, giving them quick shipping, logistics and transit access to Los Angeles and the Port of Long Beach.

The Stream brokerage team was led by Senior Vice Presidents Stefan Pastor and Brad Yates.

The Inland Empire, king of industrial

The Inland Empire remains both a regional and nationally-ranked industrial powerhouse, posting the nation’s lowest vacancy rate of 0.9 percent, with some 36 million square feet of space in its construction pipeline and a year-to-date transaction volume of $3.2 billion as of August, according to a CommercialEdge report. Due to its location and clientele, the region is also the most expensive for industrial investment and leasing in the U.S., with the per-square-foot sale price clocking in at $336.

The post TA Realty Pays $134M for 2 Inland Empire Assets appeared first on Commercial Property Executive.

1933 E. Locust St. Image courtesy of Stream Realty Partners

Winsford Corp. has sold a 106,088-square-foot warehouse in Ontario, Calif., for $56 million, a record price per square foot in the Inland Empire market.

Stream Realty Partners worked on behalf of the seller, together with Colliers International, which also represented the buyer, Ottogi America, CommercialEdge and San Bernardino county records shows.

READ ALSO: What’s Driving Industrial Property Management Today

Completed in 1989, the property is located at 1933 E. Locust St. and comprises one industrial building, a 12,772-square-foot office space, dock-high loading capabilities, concrete truck courts and 80 parking spots. The property is situated on a 7.1-acre lot, close to Interstates 15 and 10, within 2.9 miles from Ontario International Airport, 16.4 miles from downtown Riverside and 30 miles of downtown Anaheim, Calif.

A record price for the Inland Empire industrial market

The industrial asset in currently occupied by Forbes Industries, a manufacturer of food, beverages and hospitality products, that asked the new ownership for a short-term sale-leaseback agreement.

Stream Realty Partners’ Senior Vice Presidents Stefan Pastor and Brad Yates worked on behalf of the seller, together the Colliers International team of Vice Chairman Michael Kendall, Senior Vice Presidents Gian Bruno and Kenny Patricia. Colliers’ Senior Executive Vice President James Min represented the buyer.

The property also features an unpaved parcel of land behind the facility, an unusual amenity in the Inland Empire industrial market, Pastor commented in prepared remarks. He also added that the Inland Empire has become a premier industrial market in North America, due to its low vacancy and strong rent growth.

Over the past 12 months, the West Inland Empire submarket has benefited from a significant migration of skilled workers that has pushed employment up by 15 percent, according to Stream Realty.

Earlier this year, another high-profile sale closed in the Inland Empire, when KKR purchased a 281,000-square-foot warehouse in Eastvale, Calif., for $136.5 million from Parker House, after five years of ownership. In April, Rockefeller Group sold a 289,407-square-foot distribution center in Perris, Calif., for $92 million.

The post Winsford Corp. Sells Inland Empire Industrial Asset for $56M appeared first on Commercial Property Executive.

United Legwear & Apparel Co. site in Laguna Beach, Calif. Image courtesy of McDonald Property Group

McDonald Property Group, of Laguna Beach, Calif., will soon start construction on a 1.8 million-square-foot build-to-suit distribution center in Beaumont, Calif., in Southern California’s Inland Empire.

The BTS is for United Legwear & Apparel Co. LLC, a major manufacturer of legwear, bodywear and other apparel and accessories, including licensed brands such as Hurley, Champion, Fortnite, Van Heusen, Skechers and Puma.

ULAC’s landlord under a long-term lease will be USAA Real Estate, which intends to own this investment long term, a spokesperson told Commercial Property Executive.

The property is intended primarily for assembly and distribution uses, with ancillary management offices, and will feature a 40-foot clear ceiling height, about 30,000 square feet of office space, and assembly, racking and automated material handling systems.

READ ALSO: Southern California Continues Industrial Momentum Into 2022

Construction will begin later this month, with completion expected in December 2023.

The site encompasses 85 acres known as Phase II of the Crossroads Logistics Center, a master-planned project at I-10 and Hwy. 60.

In a prepared statement, Chris Volpe, ULAC’s chief operating and financial officer, said the facility will let ULAC consolidate their West Coast logistical hub and distribution point in one location. ULAC currently operates facilities in Whittier and Rialto, Calif.

The USAA Real Estate–McDonald team completed Wolverine Worldwide’s fulfillment center and another build-to-suit fulfillment facility as Phase I of Crossroads Logistics Center in 2017 and 2020, respectively.

David Consani, Jim Koenig, Darla Longo and Barbara Emmons of CBRE and Rick John of Daum represented McDonald and USAA in the lease transaction. Luke McDaniel, Cameron Driscoll, Jeff Bellitti and Mac Hewett of JLL represented United Legwear.

The architect of record is HPA Architecture, and the general contractor is Fullmer Construction Co.

High and low

In January, USAA received $81.6 million in construction financing from Regions Bank for the development of an 816,000-square-foot distribution center in Beaumont as a BTS for Amazon. McDonald Property Group is USAA’s development partner on that project also.

The post USAA, McDonald Start 1.8 MSF Logistics Facility appeared first on Commercial Property Executive.

6300 Providence Way

KKR Real Estate Partners Americas III, a fund managed by KKR, has acquired a 281,000-square-foot warehouse in Eastvale, Calif. Parker House sold the property for $136.5 million, The Press-Enterprise reported. The asset last traded in 2017 for $23 million, according to CommercialEdge data.

KKR’s portfolio includes more than 45 million square feet of industrial space across several markets, totaling in excess of $7 billion in investments. The firm owns 20 properties and almost 1.3 million square feet of assets in California, according to CommercialEdge data. KKR is also planning major industrial ground-up developments, totaling 1.8 million square feet, in Atlanta, Dallas, Denver and Orlando, Fla.

READ ALSO: The Impact of Interest Rates and Inflation on Industrial Real Estate

Completed in 2017, the property spans 11.9 acres and comprises a concrete building with 32-foot clear heights, a 148-foot truck court, loading doors, ESFR fire sprinklers, 52- by 60-foot bay spacing, trailer parking, as well as 238 parking spaces. Parker House Furniture is the single tenant of the building.

Located at 6300 Providence Way within the Ontario Chino submarket, the warehouse is some 3.3 miles west of Interstate 15, offering access to major commercial routes, as well as the Los Angeles International Airport and the Port of Los Angeles. Other major companies in the area include Flex Logistics, Weber Logistics, Yamibuy Warehouse and Delta Electronics Ltd.

The location is within walking distance of an industrial property acquired by Rexford Industrial in March. The company’s buying spree at the time also included properties in the South Bay, San Fernando Valley and the L.A.–Mid-Counties region.

The post KKR Pays $137M for Inland Empire Warehouse appeared first on Commercial Property Executive.

18025 Slover Ave. Image courtesy of JLL

Crow Holdings has sold an Amazon-leased industrial asset in Southern California’s high-demand Inland Empire for $102 million or $296 per square foot, with the assistance of JLL. Salt Lake City-based Property Reserve purchased the approximately 344,400-square-foot distribution facility in Bloomington, Calif., according to CommercialEdge data.

The transaction brought Property Reserve’s Inland Empire industrial portfolio to more than 1.6 million square feet, CommercialEdge shows. The market boasted the lowest industrial vacancy in the country, at 0.8 percent, in the second quarter of 2022, according to Newmark research.

And the Inland Empire industrial market is only going to get tighter. “There is a growing hesitancy among the market’s core basin cities to build new industrial product,” the Newmark report states. “Pushback from local cities along with swiftly rising land costs is leading to more construction in areas once deemed tertiary.”

READ ALSO: Why Large Industrial Sales Are Gaining Steam

Known in its project stage as Clover Distribution Center, the property at 18025 Slover Ave. broke ground in early 2020 and reached completion in 2021. The last-mile facility sits on more than 17 acres just south of Interstate 10, close to Highways 60 and 91. Interstates 15 and 215 are also nearby.

CommercialEdge shows Amazon leased the property in the last quarter of 2021. The e-commerce leader utilizes the LEED Silver-certified facility as a robotics distribution center. The property features the typical amenities found in today’s industrial facilities, including a 36-foot clear height, LED lighting and ESFR fire protection. Additional features include 49 dock-high doors, a 185-foot-deep truck court, 3 percent skylights, 3,300 square feet of office space and ample parking.

JLL’s Mark Detmer, Ryan Sitov and Evan Moran led the Capital Markets Investment Sales and Advisory team that represented the seller.

First comes funding

Crow Holdings spent the first half of 2022 making major announcements pertaining to the financing of key activities. In March, Crow Holdings Industrial Properties Trust, an acquisition and development entity managed by Crow Holdings Capital with support from wealth advisory and family office platforms, closed with more than $600 million of equity commitments for a total of $1.5 billion of leveraged buying power.

Also during the first quarter of 2022, Crow Holdings announced the final close of Crow Holdings Development Opportunities Fund I LP—an investment vehicle focusing on the development of industrial assets, as well as properties in other select sectors—having reached its hard cap of $750 million after a six-month fundraising period. The oversubscribed vehicle has a total of more than $1.5 billion of leveraged funds to invest.

The post Amazon-Leased Asset Trades for $102M appeared first on Commercial Property Executive.

Image by Marcin Jozwiak via Pixabay

A joint venture between Real Estate Development Associates and Clarion Partners has secured $210 million in construction financing for the development of Ontario Ranch Business Park, a 160-acre, 3.2 million-square-foot industrial campus underway in Ontario, Calif.

The 3-year, non-recourse loan funds the project’s first phase, slated to comprise 1.7 million square feet across seven buildings. JLL Capital Markets arranged the floating-rate, interest-only financing on behalf of the borrower. JPMorgan Chase was the lender, according to San Bernardino County records.

Ontario Ranch Business Park Phase I is taking shape on a 84-acre parcel within the Ontario Ranch master-planned community. The joint venture paid $86.1 million for the development site in 2020, public records show.

Upon completion, Phase I will have clear heights ranging from 30 to 40 feet, 287 loading positions and 775 parking stalls. Its largest facility, which is planned to have 1.1 million square feet, is already preleased to The Home Depot. This particular building is anticipated to deliver by the end of 2022, according to CommercialEdge data.

A sought-after location in the heart of the Inland Empire

Situated at the southeast corner of Eucaplyptus and Euclid avenues, the development site has direct access to Interstate 15. Chino Airport is directly south of the location, while Ontario International Airport is 7 miles north. The property neighbors the 124-acre Ontario Ranch Logistics Center, another industrial campus developed by the REDA-Clarion partnership.

JLL Managing Director Brian Torp, Director Peter Thompson, Associate Samuel Godfrey and Analyst Jordan Leake formed the Debt Advisory team that represented the borrower in the transaction. According to CommercialEdge data, CBRE and Lee & Associates provide leasing services for the development.

Inland Empire continues to be a hotbed for industrial development. According to the latest CommercialEdge report, nearly 34 million square feet were under construction in the metro as of May, representing 5.6 percent of stock.

The post Clarion Partners JV Scores $210M for Inland Empire Project appeared first on Commercial Property Executive.

Val Verde Logistics Center. Image courtesy of Rockefeller Group

Rockefeller Group has sold Val Verde Logistics Center, a 289,407-square-foot distribution center in Perris, Calif., for $92 million. Lee & Associates represented the company on the property’s leasing and sale, while Cushman & Wakefield represented Rockefeller on the investment sale element.

Completed in October 2021, the logistics center is currently fully leased. Herdman Architecture + Design designed the development, Kimley-Horn engineered the facility, while RM Dalton served as general contractor.

READ ALSO: Cross-Border CRE Investment Hits Record High

Val Verde Logistics Center broke ground in 2020 and covers roughly 13 acres. The property comprises 182 parking spaces in a 0.63 spaces per 1,000 square feet parking ratio, according to CommercialEdge data. The facility also has 36-foot clear heights, a truck court of approximately 185 feet and is equipped with an ESFR sprinkler system, according to the same data provider. The development’s sister project, the 333,572-square-foot Harvill Logistics Center in Perris, Calif., traded for $57.5 million last September.

Located at 23458 Cajalco Road, the property provides easy access to Interstate 215 via Harvill Avenue. Downtown Riverside is some 15 miles northwest of the development. James Camp, Senior Managing Director for Rockefeller Group’s West Region, said in prepared remarks that the company will continue to develop in the Inland Empire and San Diego markets despite the region’s limited supply of land and strong competition.

The post Rockefeller Group Pockets $92M for Inland Empire Logistics Center appeared first on Commercial Property Executive.

Image by startup38 via Pixabay.com

An affiliate of Covington Group Inc., along with an institutional capital partner, has acquired seven Class A warehouse/distribution buildings totaling nearly 3.4 million square feet at Southern California Logistics Centre, in Victorville, Calif., in the Inland Empire for $270 million.

The transaction, according to Covington, represents the single largest acquisition to date of industrial properties in the Inland Empire North submarket.

READ ALSO: Top 5 Markets for Industrial Transactions

Completed between 2008 and 2017, the buildings feature clear heights up to 32 feet, concrete tilt-up construction, large truck courts and ample trailer parking. The portfolio’s tenant roster includes such national tenants as Newell Brands, M&M Mars, Boeing and Plastipak Packaging.

The seller was a partnership of Stirling, the properties’ developer and operator, and Prologis, the portfolio’s other owner, via a recent recapitalization.

Southern California Logistics Centre is on the site of the former George Air Force Base in Victorville; it’s the product of a decades-long effort by the City of Victorville to redevelop the base as a multimodal transportation hub.

In a prepared statement, Ken Sheer, CEO & founding partner of Covington, said this portfolio and the submarket are “uniquely positioned to address the overflow of demand seen from tenants coming from the Los Angeles basin in search of more affordable space that still meets their specific requirements.”

Tighter than tight

As the Ports of Los Angeles and Long Beach together process nearly 30 percent more cargo than a year ago, yet still can’t keep up with the record volume of containers waiting offshore, demand for warehouse space in the Inland Empire is surging. In the third quarter, overall vacancy fell to a razor-thin 1.0 percent, with rents climbing accordingly, Cushman & Wakefield reported recently.

In April, a Covington Group affiliate sold 60 acres at Covington’s 200-acre Hesperia Commerce Center, in Hesperia, Calif., (also in the Inland Empire) to Exeter Property Group for $20.5 million. The buyer plans to develop a 1 million-square-foot build-to-suit facility for home and office furniture distributor Modway Inc.

The post Covington Group Acquires Industrial Portfolio for $270M appeared first on Commercial Property Executive.

Nancy Shultz, Senior Vice President, Duke Realty Corp. Image courtesy of Duke Realty Corp.

Duke Realty Corp. has secured a tenant to occupy its new speculative development at 1532 S. Vineyard Ave. in Ontario, Calif. The pure-play logistics property REIT signed Yahee Technologies to a long-term lease of the approximately 199,500-square-foot facility, which is under construction in the high-demand Inland Empire West submarket.

READ ALSO: Top 5 Markets for Industrial Transactions

Sited on 8.7 acres at the intersection of Vineyard Ave. and Elm St., 1532 S. Vineyard will offer such coveted features as 36 feet of clear height, a 7,600-square-foot office area and environmentally sustainable attributes designed to position the property to qualify for LEED Silver certification. Duke was not precisely surprised that 1532 S. Vineyard attracted a tenant commitment in advance of delivery.

“We are finding that what we start as a speculative development, is more often than not preleased and coverts to a spec-to-suit project,” Nancy Shultz, a senior vice president with Duke Realty Corp., told Commercial Property Executive. “With industrial vacancy rates in the low single digits in Southern California and at only 1 percent in the Inland Empire submarket, we know there is high demand for warehouse and distribution space.”

1532 S. Vineyard Ave. Image courtesy of Duke Realty Corp.

Market conditions indicated that a prelease of the asset would be likely, and so did Duke’s history; 10 out of 12 of the REIT’s last speculative developments in Southern California were spoken for prior to or immediately after project completion. “Many of our clients are looking to expand their supply chain. Additionally, warehouses are at capacity and companies need more modern, conveniently located facilities to meet consumer needs,” Shultz added.

Race for space to persist

There appears to be no end in sight to the robust demand that is outpacing supply in the constricted Inland Empire industrial market, where the direct vacancy rate dropped to an all-time low of just 1 percent in the third quarter of 2021, and the triple-net lease average asking rate rose to a historic level of $0.89 per square foot, according to a report by Voit Real Estate Services.

“Driven by the continued growth of e-commerce activity, I anticipate the high demand for space to continue well into 2022 and beyond,” said Schultz. “Companies are having to look further and further into the future to find space due to the lack of availability. We are seeing requirements a year or more out.”

In an effort to help fill the void in industrial space availability, Duke is making thoughtful acquisition and investment decisions in Southern California; however, the company faces certain hurdles in its bid to increase inventory. “We would like to develop more projects, but the lack of suitable land and the lengthy entitlement process is a governor on what can be delivered,” she noted.

Yahee Technologies, which relied on Kevin Wang of Centermac Realty for representation in the lease transaction, will utilize its new home at 1532 S. Vineyard to expand its West Coast distribution network. Collier International’s Mark Zorn and Cory Whitman, along with Duke’s Collin Phillips, represented Duke in the lease deal. The REIT expects the newly preleased development to reach completion in early 2022.

The post Duke Realty Lands Tenant for Industrial Spec Project appeared first on Commercial Property Executive.

Saddle Ranch Business Park. Image courtesy of Alere Property Group

Calling it a strategic acquisition in the Inland Empire West industrial submarket, Alere Property Group has acquired the four-building, 422,000-square-foot, Class A, Saddle Ranch Business Park in Norco, Calif., from CapRock Partners, a Newport Beach, Calif.,-based industrial real estate investment and development firm.

The sales price for the industrial warehouse complex fully leased by Goli Nutrition was not disclosed. Goli, a vitamin and nutrition company, has leased the multi-building campus for its manufacturing and distribution operations since May 2020. Goli also uses the business park as its corporate headquarters and has invested significant capital to customize the buildings for its product manufacturing and has installed a high-end cafeteria and commercial-grade kitchen, among other improvements.

READ ALSO: The Logistic Sector’s Record-Breaking Momentum

Built in 2019 on nearly 23 acres, Saddle Ranch Business Park consists of four buildings at 3330, 3350, 3380 and 3390 Horseless Carriage Drive, according to CommercialEdge. 3330 Horseless Carriage Drive has 95,122 square feet of space and 30-foot clear height. 3350 Horseless Carriage Drive has 87,930 square feet of space. 3380 Horseless Carriage Drive has 80,961 square feet of space and 30-foot clear height. 3390 Horseless Carriage Drive has 158,419 square feet of space and 32-foot clear height.

The business park is less than a mile from the I-15 freeway and near the SR-91, I-215, SR-60 and I-10 freeways. The site is also within close proximity to rail lines and airports including the Ontario International Airport and Los Angeles International Airport.

The Inland Empire West location is desirable for tenants requiring efficient access to Los Angeles and Orange counties, the San Gabriel Valley and the mid-counties region in California. It is also near the cities of Ontario, Eastvale, Chino Hills, Chino, Corona and Riverside, all in the Inland Empire West submarket. The cities of Norco and Corona make up a key distribution infill market with limited remaining developable land.

Growing Alere

Alan Carmichael, senior vice president of investments at Alere Property Group, said in a prepared statement the business park is a well-designed and uniquely positioned asset within the Inland Empire West submarket that complement’s Alere’s approach and is an excellent addition to the Newport Beach, Calif.,-based company’s portfolio of high-quality industrial assets.

Carmichael also said that the Norco/Corona submarket continues to fill in with robust economic activity. He noted that in addition to meeting the demand for the e-commerce sector, the Inland Empire is also providing space for Southern California-based manufacturing companies that are also growing and need modern industrial facilities.

Founded in 2003, the real estate investment and development firm has a portfolio of more than 30 million square feet of industrial properties valued at approximately $6.3 billion.

Late last month, Alere began construction on two industrial warehouse projects with a total of 12 buildings and 626,000 square feet in separate locations in Chino in the Inland Empire West. The larger of the two developments is Euclid Industrial Park, which will have 360,000 square feet spanning eight buildings. The smaller project is Chino Commerce Park, a four-building, 266,348-square-foot development that will be anchored by a 210,747-square-foot distribution warehouse. In June, Alere broke ground on South Cucamonga Distribution Center, a 210,703-square-foot speculative warehouse in Ontario.

CBRE represented Alere and CapRock in the Saddle Ranch transaction, led by Darla Longo, Barbara Perrier, Rebecca Perlmutter, Joe Cesta and Eric Cox. A Lee & Associates team that included Paul Earnhart, Jeff Ruscigno, Brian Pharris and Ryan Earnhart consulted on the deal.

The post Alere Property Acquires Inland Empire Business Park appeared first on Commercial Property Executive.

Harvill Logistics Center. Image courtesy of Rockefeller Group

In a $57.5 million deal, a partnership between CH Realty Partners and Blumenfeld Development Group has acquired Harvill Logistics Center, a 333,572-square-foot industrial asset in Perris, Calif. Colliers brokered the transaction on behalf of the buyers, while Lee & Associates represented the property’s seller and developer, Rockefeller Group.

In September 2020, Rockefeller Group purchased approximately 30 acres for the development of two Class A industrial distribution facilities totaling 623,109 square feet: Harvill Logistics Center and its sister property, Val Verde Logistics Center. The latter, a recently completed speculative distribution facility totaling 289,556 square feet, is currently available for sale or lease.

Covering a nearly 17-acre site at 21500 Harvill Ave., Harvill Logistics Center also includes a 7,976-square-foot office component across two stories. The logistics center features 36-foot clear heights, a truck court between 186 and 196 feet, a parking ratio of 0.57 parking spaces per 1,000 square feet and is equipped with an ESFR sprinkler system.

The property provides easy access to Interstate 215 via Harvill Avenue. Downtown Riverside is some 17 miles northwest of the facility.

Herdman Architecture + Design Inc. designed Harvill Logistics Center, while RM Dalton served as the general contractor.

The Inland Empire

As industrial demand continues to favor sellers, Harvill Logistics Center has generated multiple offers.

In January, Rockefeller Group sold two other Inland Empire industrial assets totaling 500,000 square feet. Two separate buyers paid a combined $80.8 million to acquire the Class A properties.

In May, Costco Wholesale paid $345 million to purchase 5600 East Airport Drive, a distribution facility totaling 1.6 million square feet in Ontario, Calif., CommercialEdge data shows. The seller, CenterPoint Properties, acquired the asset just last year in an off-market transaction that ranked as the largest single-asset industrial transactions to close in Southern California over the last decade.

In March, Black Creek Group announced plans to develop two Class A industrial assets totaling 1.7 million square feet. As of July, some 500 million square feet of industrial assets were underway across the U.S., according to CommercialEdge data. The Inland Empire supply pipeline totaled 21.5 million square feet under construction, representing 3.7 percent of stock, slightly above the 3.3 national average.

The post Rockefeller Group Sells Inland Empire Asset for $58M appeared first on Commercial Property Executive.

The ongoing surge in demand, coupled with low vacancies nationwide, has benefited industrial properties. Investors have deployed significant capital to take advantage of rapid rent growth: The nationwide average rent of $6.31 per square foot in July marked a 4.0 percent uptick over the year, with growth in many markets—particularly those with nearby ports—far exceeding the national figure.

The table below, based on data provided by CommercialEdge, highlights the five markets with the highest transaction volume in the first half of 2021. While investment volumes more than doubled in two of these metros compared to the same time frame last year, one market saw transactions marginally slow.

5. New Jersey

10Edison. Rendering courtesy of Rockefeller Group

Close to $1.3 billion in industrial transactions closed in the first half of the year in the New Jersey market, placing it fifth on our list.

More than 75 percent of deals involved Class B or C assets, underscoring the importance of value-add opportunities given the lack of available land for new construction. Even so, pricing per square foot hit an average of $190, significantly greater than the $113 national figure and one of the highest in the country.

In addition to the multitude of value-add deals, several high-dollar Class A transactions closed. The largest, Property Reserve’s $247 million acquisition of 10Edison, a 900,022-square-foot Amazon fulfillment center, shattered records as the largest single-building industrial deal to close in the state’s history. Rockefeller Group delivered the property in 2020.

4. Atlanta

3090 State Highway 42. Image courtesy of Granite Real Estate Investment Trust

Atlanta continues to grow in importance as a major industrial hub. Demand has pushed rents up 4.4 percent year-over-year through July, even as developers have added some 17.8 million square feet of new inventory since the beginning of last year.

Transactions totaling in excess of $1.4 billion closed in the first half of 2021, more than twice the $708.3 million volume recorded during the same time in 2020. This year’s deals averaged $78 per square foot, a modest 7.9 percent uptick from 2020.

Class A transactions accounted for more than 60 percent of total volume. In one of the market’s largest deals, Granite Real Estate Investment Trust paid $68.9 million for a 1 million-square-foot facility in Locust Grove, Ga. The building came online last year and is fully occupied by e-commerce operator Radial Inc.

3. Chicago

Elion Logistics Park 55. Image via Google Earth

The country’s largest industrial market ranks third on our list, with $1.5 billion in investment volume across 150 sales, a slight decrease from the first half of 2020. Demand for modern logistics space in the Chicago metro has remained high, even as rent growth has lagged and vacancies have increased.

The market’s average July rent of $5.32 per square foot marks only a 2.7 percent increase over the year, while vacancies were 80 basis points above the national figure, at 6.6 percent.

An abundance of value-add transactions brought Chicago’s pricing down to $67 per square foot: Although more than 75 percent of the market’s transactions involved Class B and C properties, those same deals accounted for barely one-third of overall volume. The largest sale this year was Silver Creek Development’s $126 million purchase of three buildings occupied by Michelin in Wilmington, Ill.

2. Inland Empire

5600 E. Airport Drive. Image via Google Maps

The Inland Empire’s industrial market continues to lead the nation in most indicators. With demand for space soaring and vacancies at a record low of 1.4 percent in July, the Southern Californian market has responded, with rents up 6.9 percent over the year to $6.36 per square foot in July.

And with $1.9 billion in transaction volume through June—more than double the $914.5 million closed in the first half of 2020—the market takes second place on our list.

In May, CenterPoint Properties sold a 1.6 million-square-foot Class B asset at 5600 E. Airport Drive in Ontario, Calif., for $345 million to Costco. The deal is the largest in the Inland Empire’s history and the biggest single-building industrial transaction to close nationwide this year. CenterPoint had acquired the 1980-built asset for $82.5 million barely a year earlier, in March 2020.

1. Los Angeles

The Box Yard. Image courtesy of Newmark

Los Angeles tops our list, with upwards of $2 billion in transactions closed between January and June at an average of $190 per square foot.

The market’s demand, driven ever higher by rapid expansions in throughput at both the Port of Los Angeles and the Port of Long Beach, resulted in strong rent growth—at 6.4 percent year-over-year through July—amid low vacancies of 3.4 percent.

In one of the largest transactions in the first half of the year, Rexford Industrial paid $93.6 million for The Box Yard, a four-building creative industrial asset in the East Los Angeles submarket. The seller, Bridge Industrial, had purchased the 261,528-square-foot from Atlas Capital Group in early 2019 for $68 million.

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Birtcher Oak Valley Commerce Center groundbreaking. (Left to right) John Ohanian, director of development, Oak Valley Development Co.; Brooke Birtcher Gustafson, managing director, Birtcher Development; Brandon Birtcher, CEO, Birtcher Development; Craig Martin, principal with Oak Valley Development Co. Image courtesy of Birtcher Development

Birtcher Development has broken ground on a 125-acre, 2.2 million-square-foot industrial development in Calimesa, Calif., in the Inland Empire East, that will be targeting big box tenants with warehousing and distribution needs. Birtcher is expected to complete phase one, totaling 1.2 million square feet, in the second quarter of 2023. Phase two, which will comprise 1 million square feet, will be delivered in the third quarter of 2023.

Located off I-10, Birtcher Oak Valley Commerce Center will consist of four Class A industrial buildings designed to meet current high demand for logistics facilities in Southern California. They will offer 40-foot clear heights, flat floors and a minimum of 185-foot truck courts.

The site off Singleton and Roberts roads will provide an opportunity for autonomous trucking with immediate freeway access onto its campus, where transportation firms can shift to cabs with drivers for urban deliveries. In addition to I-10, the site is also near the BNSF Intermodal, which serves as a predominant inbound container hub for the region and is a key driver of tenant demand in the area.

READ ALSO: E-Commerce Continues Driving Industrial Growth

Brooke Birtcher Gustafson, managing director of the Newport Beach, Calif.-based company, said in prepared remarks that the firm is bullish on the growth of the Oak Valley I-10 Corridor because of its strategic location just beyond Redlands, Calif., and deep untapped labor market.

The new industrial campus is expected to draw long-term corporate credit tenants who have been unable to secure space in the tight markets of the Inland Empire and Los Angeles. Tenants have been moving further east into the Inland Empire due to the area’s availability of land for development and new product.

The seller of the property, principals of Oak Valley Development Co. LLC, has owned the site since 1997 and obtained entitlements for the project in the first quarter of 2021. The seller will deliver the offsite and road infrastructure for the project in addition to building pads for Birtcher’s vertical development. That firm is also planning to build an 80-acre retail center adjacent to Birtcher Oak Valley Commerce Center by 2023, which will serve as an amenity for the project and the region.

QuadReal Property Group LP is Birtcher’s joint venture partner. Kidder Mathews’ Herb Grabell and David Burback are the seller’s listing brokers and the buyer’s advisory brokers. JLL’s Mike McCrary, Peter McWilliams, Patrick Wood and Scott Coyle served as the buyer’s listing brokers. Firms involved in the development will include HPA Architecture; Proactive Engineering Consultants West Inc.; Albert A. Webb Associates; Alta California Geotechnical Inc., and Southern California Geotechnical.

Inland Empire East Growth

John Ohanian, director of development for Oak Valley Development Co., said in prepared remarks that Calimesa is strategically poised to have growth similar to the City of Redlands, which grew from 1.6 million square feet of industrial space in 2000 to 28.1 million square feet today.

According to a Q1 2021 industrial market report by Lee & Associates, the Inland Empire East’s industrial vacancy rate was 4.28 percent in that quarter, with about 10.8 million square feet of space under construction. The Inland Empire East’s total inventory at that time was 244.2 million square feet.

READ ALSO: Top 5 Inland Empire Industrial Projects Under Construction

The report stated the industrial market grew in the first quarter due to continued demand for space, and large companies like Amazon and 3PLs as well as smaller manufacturers are all looking for space to meet the e-commerce demands of their customers. The challenge for interested tenants is finding available product in the area to meet the demand that is expected to continue growing throughout the year.

Last month, Shopoff Realty Investments and Artemis Real Estate Partners broke ground on the I-10 Logistics Center project, a more than 1.8 million-square-foot industrial development in Cherry Valley, Calif.., also within Riverside County in the Inland Empire East. The development will have two warehouse buildings that are slated for completion in the summer of 2022.

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1656 S. Cucamonga. Rendering Courtesy of Alere Property Group.

Alere Property Group is significantly expanding its Southern California portfolio, particularly in the Inland Empire. The developer has broken ground on South Cucamonga Distribution Center, a speculative industrial warehouse in Ontario, Calif. The Class A facility is expected to deliver in the third quarter of this year. NAI Capital is handling leasing efforts.

According to CommercialEdge data, the developer received a $20 million construction loan for the property, provided by Zions Bank.

South Cucamonga Distribution Center will total 210,703 square feet of leasable space, divisible to 105,352 square feet. The warehouse will feature 40-foot clear height, 2,000 Amps of power, 185-foot-deep truck court, ESFR sprinklers, as well as 23 dock-high and two ground-level doors. The build-out will also incorporate a two-story office of 5,000 square feet. The facility will have access to FedEx, UPS and the BNSF Intermodal Rail Yard.

The 9.3-acre development is situated at 1656 S. Cucamonga Ave., an infill location in the Inland Empire’s saturated industrial market. Several major thoroughfares are nearby, including State Routes 60 and 83 and Interstate 10. Ontario International Airport is roughly 2 miles away. Alere also owns the nearby Mildred Distribution Center, an 857,000-square-foot warehouse about a mile away from the current development.

Recent activity

Alere Property Group currently has $500 million in active developments across Southern California. In recent months, the company has expanded its industrial footprint in Orange County as well. In February, Alere acquired a 47,700-square-foot warehouse at 14422 Astronautics Drive in Huntington Beach for $12.6 million, CommercialEdge data shows. In April, the company paid $23 million for a 107,370-square-foot property at 1062 McGaw Ave. in Irvine. Alere intends to redevelop the property, which was owner-occupied.

In addition to South Cucamonga Distribution Center, Alere Property Group is also planning to build Chino Industrial Park and Chino Commerce Park in the Inland Empire, amounting to roughly 630,000 square feet of new industrial development, CommercialEdge data shows.

Southern California markets continue to dominate the industrial sector, despite areas with low land availability and ever-increasing rents. The Inland Empire’s first quarter saw net absorption exceed 10 million square feet, while vacancy dropped to 1.9 percent, Colliers research shows. Demand is high and developers are adding massive projects in areas where land is still available. At the end of the first quarter, 19.5 million square feet of industrial space was underway in the Inland Empire.

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Knox Logistics VII site, Riverside County, Calif. Image courtesy of Trammell Crow Co.

Trammell Crow Co. and Clarion Partners LLC continue their joint venture partnership in Riverside County, Calif., with the commencement of construction of another big-box industrial development. The partners recently broke ground on Knox Logistics VII, a Class A project that will bring 1.1 million square feet of speculative space to the Inland Empire.

READ ALSO: Exploring the Industrial Sector from the US to the UK

Carrying the address of 19115 Harvill Ave., Knox Logistics VII will occupy 73 acres in a business park setting along the I-215 Corridor. The highly functional facility will offer state-of-the-art features designed to attract and accommodate the needs of today’s sophisticated e-commerce and logistics users.

Knox Logistics VII kicks off 10 years after TCC and Clarion partnered on the acquisition of land for the development of their first speculative big-box project in the I-215 Corridor—I-215 Logistics Center. The approximately 1.3 million-square-foot project, developed at a cost of roughly 80 million, would go on to be leased in its entirety by Amazon and hold the distinction of being the first million-square-foot-plus spec industrial project developed during the market recovery following the Great Recession.

Inland Empire thrives—still

The Inland Empire is a haven of big-box industrial, and it appears too much is never enough. The market closed the first quarter of 2021 with a record-low vacancy rate of 1.9 percent and positive net absorption totaling 10.3 million square feet, according to a report by Colliers International.

The current dynamics bode well for new projects like Knox Logistics VII. “The Ports of L.A. and Long Beach continue to work their way through the congestion of cargo ships that can be seen from much of the Southern California coastline,” according to the Colliers report. “As vacancy continues to decline, under construction projects will continue to see multiple offers well before construction is completed.”

Cushman & Wakefield is overseeing leasing for Knox Logistics VII. Trammell Crow and Clarion expect to complete construction of the project in 2022.

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I-10 Logistics Center. Rendering courtesy of Shopoff Realty Investments

Shopoff Realty Investments and Artemis Real Estate Partners have broken ground on the I-10 Logistics Center project, a more than 1.8 million-square-foot industrial development in California’s Inland Empire. The joint venture partners received a $105 million loan for the state-of-the-art project from Bank OZK in April. Construction is slated for completion in the summer of 2022.

READ ALSO: China-Based Firm Leases 191 KSF Inland Empire Warehouse

Designed by Ware Macomb, the project is located in Cherry Valley, a census-designated place within Riverside County and part of the Inland Empire East market. Situated northeast of the Interstate 10 freeway and Cherry Valley Boulevard interchange, the development will comprise two high-cube warehouse buildings, measuring about 811,000 square feet and 1 million square feet, respectively.

The project will aim for LEED Silver certification and will feature 40-foot clear heights, 300 dock-high roll-up doors and 510 trailer parking spots. The site spans a total of 240 acres, with the development accounting for around 155 acres, while the remaining 85 acres of land is to be donated to the Rivers and Lands Conservancy as an open space.

Shopoff Realty Investments and Artemis Real Estate Partners noted in prepared remarks that the property will offer direct accessibility to Interstate 10, the southernmost cross-country highway in the U.S., in an industrial market with constrained supply. The project will also bring thousands of jobs to the area.

Tight market

Industrial vacancy—including warehouse, distribution and manufacturing—across the Inland Empire tightened to a historical low of 2.7 percent by the end of the first quarter, similar to that of the neighboring Los Angeles market, according to a JLL market report. That figure stood at 3.8 percent in the Inland Empire East, which had 14.5 million square feet under construction at quarter’s end.

Black Creek Group, a real estate investment management firm, announced in March its plan to add a total of 1.7 million square feet of Class A industrial space to the region by developing Etiwanda Commerce Center and Riverside Logistics Center, located in the western and eastern sides of the Inland Empire, respectively.

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As demand pushes costs higher in supply-constrained, mostly coastal markets, many developers have accelerated plans in lower-cost inland markets, with a heavy emphasis on the Sun Belt region. While traditionally attractive industrial markets such as Chicago, Los Angeles and Northern New Jersey have not lost their luster, Sun Belt markets now account for more than half of industrial projects nationwide. The table below, based on CommercialEdge data, highlights the top five markets in the region based on square footage under construction.

5. Memphis, Tenn.

Marina Commerce Center. Image courtesy of Hillwood

Boasting low costs and an abundance of open land, Memphis, Tenn., took the fifth spot on our list, with 17 industrial projects under construction totaling 12.2 million square feet. More than half of the square footage underway—56.2 percent—was in DeSoto County, just south of the city, which has long been a draw for developers. Since 2018, nearly 7.1 million square feet has delivered in the submarket.

The largest project underway was Hillwood’s 1.1 million-square-foot Marina Commerce Center, located at 10480 Marina Drive in Olive Branch, Miss. The speculative distribution center broke ground last fall and is slated for delivery in late 2021. Colliers is marketing the cross-dock development, which will include 196 loading docks, 185-foot truck courts and minimum clear heights of 40 feet.

4. Inland Empire

Ontario Ranch Logistics Center. Image courtesy of REDA and Clarion Partners

Overwhelming industrial demand in the Inland Empire continues to drive rents higher and higher, up 8.2 percent for the 12 months ending in March. As a result, despite some land availability constraints, development continues at full speed, with 74 projects comprising 15.7 million square feet underway.

The second building at Real Estate Development Associates and Clarion Partners’ Ontario Ranch Logistics Center in Ontario, Calif., is the largest development underway in the market. The 1.2 million-square-foot facility is a build-to-suit project for Uline, which signed its lease last spring. The property, located on 48 acres at 4810 S. Hellman Ave., is scheduled to wrap up in early 2022.

3. Phoenix

Amazon fulfillment center. Image courtesy of Amazon

Phoenix has been home to a major industrial expansion in recent years. Last year alone, nearly 13 million square feet delivered, with close to an additional 5 million completed in the first three months of 2021. Developers had 16.4 million square feet under construction in mid-April, owing to—among other factors—the market’s cost advantage over Southern California and its location being a day’s drive from the Port of Los Angeles.

Amazon’s 2.3 million-square-foot robotics-assisted facility in Goodyear, Ariz., was the largest project under construction in mid-April. Construction on the four-story structure began in July 2020, and work is expected to finish in early summer. The development is one of many the e-commerce giant is undertaking across the country: Amazon is either the owner or sole tenant in nearly half of all developments of more than 1 million square feet underway.

2. Houston

Ross Stores Distribution Center. Image via Google Maps

Despite having one of the highest vacancy rates across the country in March—11 percent, compared to the national rate of 6.1 percent—industrial developers continue to build in Houston. In April, 53 projects were underway, totaling 18.5 million square feet. Some 2.5 million square feet has already delivered this year, following a banner 2020, when more than 19 million square feet came online in the metro.

Houston’s biggest industrial development underway, located at 31207 Kingsland Blvd. in Brookshire, is a 2.2 million-square-foot build-to-suit project for Ross Stores. Hunt Southwest Real Estate Development is the developer, and completion is anticipated in late 2021.

1. Dallas-Fort Worth

Sunrider International’s upcoming facility in Midlothian, Texas. Image courtesy of Sunrider International

The Dallas-Fort Worth metro had the highest amount of industrial projects under construction in April: The 75 projects underway will add 29.3 million square feet to the market’s inventory. As the Metroplex has continued to attract residents and draw corporate relocations, industrial demand—particularly for e-commerce users—has skyrocketed. The market’s vacancy rate stood at 4.7 percent in March, underscoring the necessity of new supply.

Sunrider International’s 1.1 million-square-foot manufacturing facility in Midlothian, Texas, was one of the largest developments underway in April. The $44 million two-building project broke ground earlier this year, and delivery is anticipated by mid-2022. Midlothian Economic Development Corp. is financing construction.

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1901 W. Center St. Image courtesy of courtesy of Brookfield Properties

Brookfield Properties continues to expand its U.S. logistics footprint at a rapid pace with the addition of yet another state-of-the-art facility.

The company has just acquired the fully leased property at 1901 W. Center St. in Colton, Calif., an approximately 232,600-square-foot asset in the heart of the high-demand Inland Empire, in an off-market transaction.

READ ALSO: DrinkPak Expands Los Angeles-Area Footprint

Brookfield purchased the asset from Avalon Apparel Group LLC for $38 million. “Sourcing well-located, high-quality industrial assets at a favorable price point is extremely challenging in today’s market,” Paul Jones, vice president, investments, with Brookfield’s Real Estate Group, told Commercial Property Executive. “Severe supply constraints, robust tenant demand, rapid rent growth and a surplus of capital continues to drive pricing higher.”

Brookfield is the third owner of the brand-new 1901 W. Center, which occupies 12.5 acres in an area primed to serve last-mile customers in the Inland Empire and throughout Los Angeles County, as well as neighboring Orange County.

Hillwood Investment Properties, a Perot Co., developed the property as Pellisier Logistics Center in 2020 and immediately upon completion, sold the building to Avalon Apparel Group LLC, which relied on a $23.7 million loan from Thorofare Capital to purchase the facility for $29.7 million. At the time, Avalon simultaneously inked a lease to occupy the building in its entirety under a triple-net lease for an initial term of 10 years, with the option for two five-year lease extensions.

Growth in the Golden State

Brookfield has its eye on California—Southern California, specifically—as a target global gateway for the growth of its logistics business. The attraction: the unrivaled tenant demand, spurred in great part by high population density and port infrastructure. Over the last 12 months, the company has invested $2 billion in industrial and logistics assets in the area. “Still, our plan is to continue to grow our Southern California industrial portfolio through strategic acquisitions and development,” Jones said. “We have multiple buckets of available capital that provide us with the flexibility to execute on various types of deal profiles—core, value, and development.”

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16477 Slover Ave. Image courtesy of Colliers

Molto Properties has fully leased a newly built logistics center in Fontana, Calif., to a China-based fulfillment firm, as e-commerce continues to fuel the Inland Empire’s buoyant industrial market.

Sell Below Cost USA committed to the 190,554-square-foot facility at 16477 Slover Ave., which was completed at the start of this year. Kevin McKenna and Greg Merrill of Colliers represented Molto in the lease transaction. Molto, a privately held developer based in suburban Chicago, partnered with LDC Industrial Realty to develop and build the state-of-the art project.

READ ALSO: Massive Inland Empire Logistics Hub to Break Ground

Located less than a mile south of Interstate 10, the facility features 36-foot warehouse clearance, a 185-foot all-concrete truck court and 24 dock high doors, along with nearly 7,000 square feet of office space. The site in the western Inland Empire is about 50 miles from the Ports of Los Angeles and Long Beach, with access to consumers across Southern California and within a six-hour drive of 55 million people.

Sell Below Cost USA will immediately occupy the fulfillment center, which will be used solely for general product storage and delivery, a Colliers representative told Commercial Property Executive. The tenant is a top 500 seller on Amazon.com, according to a description on online platform FindThisBest. The company specializes in a range of goods from home and kitchen items to industrial and scientific products.

Market Surge

Colliers noted in a statement that the logistics center received proposals from three fulfillment companies that deal with imports from China. The new lease comes as products pour into the nation’s largest container port complex at record levels. Container trade in 20-foot equivalent units was up 21 percent at Los Angeles and 32 percent at Long Beach compared to the first two months of 2020, according to the brokerage’s first-quarter market report for the Inland Empire.

Overall industrial vacancy in the region reached an historic low of 1.9 percent in the first quarter, tightening from 2.6 percent at the end of 2020, Colliers found. Vacancy in the Inland Empire West submarket has declined to 1.2 percent, with a scarcity of Class A warehouse and distribution space. Average monthly asking rents in the Inland Empire closed the first quarter at an all-time high of $0.76  triple-net per square foot, rising 1.4 percent over the previous quarter.

In another industrial commitment by a Chinese firm, Mega Lion Inc. signed a long-term lease for 132,423 square feet in Los Angeles County last September. The third-party logistics distributor, part of Shenzhen Hao Tong International Logistics, claimed the space at Golden Springs Business Center in Santa Fe Springs.

The move by Sell Below Cost USA comes after Ningbo, China-based JW Fulfillment Inc. leased half of 300 Cedar Lane, a recently built industrial project spanning nearly 700,000 square feet in Edison, N.J., this month.

The post China-Based Firm Leases 191 KSF Inland Empire Warehouse appeared first on Commercial Property Executive.

Image courtesy of Alex Duffy via Unsplash

The Greater Los Angeles industrial market is positioned to remain at the top in 2021. According to CommercialEdge data, prices have increased by more than 40 percent between 2016 and 2020 in the Southern California markets. In Los Angeles, average prices per square foot rose to $197 from $138 in 2016, while the Inland Empire saw an increase to $127, from $80.

The ports of Los Angeles and Long Beach are responsible for roughly 40 percent of all inbound containers in the U.S., according to Colliers, and represent a primary driver for the industrial market. Both the Inland Empire and Los Angeles have had record-breaking first quarters in terms of vacancy and average asking rents, with demand not showing any signs of slowing down.

READ ALSO: Vacancy Drives Industrial Pricing Surge

Greater L.A. had more than 14 million square feet of net absorption in the first quarter, of which 10.2 million were in the Inland Empire alone, Colliers research shows. Vacancy in the market dropped to a historic 1.8 percent, the lowest in the U.S.

And strict land availability is not stopping developers from rushing to add more inventory to the pipeline—the Greater L.A. market has nearly 27 million square feet under construction.

To get a clearer image of how we got here and what the future holds, Commercial Property Executive connected with Greater L.A.-based Chris Sheehan, Executive Vice President with Colliers.

The San Pedro Bay Port Complex has seen a spike in activity since the start of the pandemic. Could you tell us how this is affecting the local industrial market? 

Chris Sheehan, Brokerage Executive Vice President, Colliers. Image courtesy of Colliers

Sheehan: More containers means more warehouse space, so this is directly impacting the availability of warehouse space near the ports. Limited and shrinking availability of warehouse space means lack of supply which, coupled with more demand, means rapidly rising rental rates.

The current administration intends to spur domestic manufacturing, as well as lower the risks associated with international supply chains. Do you expect onshoring/reshoring efforts to impact the Inland Empire/Los Angeles markets?

Sheehan: I think there will be a positive impact to the industrial markets in the Inland Empire and infill Los Angeles markets, but I don’t think it will be a major impact. It is more likely that secondary and tertiary markets with more incentives and cheaper real estate will see a bigger impact.

Recent data suggests that a steep increase in rents is largely driven by land availability, or lack thereof. How are top players dealing with this challenge?

Sheehan: The short answer is paying more for industrial land. We are seeing record-breaking prices seemingly every month. Any industrial owners that have been land banking are trying to unlock the potential of their real estate as soon as possible because of the insatiable demand, both from tenants and from institutional capital.

Some real estate players say rents for smaller footprints have skyrocketed at a much higher pace than those for large developments. Have you noticed the same trend?

Sheehan: I don’t agree with this statement. I feel like larger footprints are in higher demand and typically have a more limited supply, so acceleration of rental rates in that sector is pushing the market. Lease rates for smaller buildings, while still in high demand, are not appreciating as rapidly because there is more supply.Automation—along with the push toward autonomy—is a key driver for the industry’s future. How are developers adapting to this trend?

Sheehan: By constructing buildings that provide the most flexibility for a variety of uses. This includes higher ceiling clearance to maximize the vertical space inside the building, high-density sprinkler systems, access to heavy power and creating efficient floorplans. This allows for both a traditional warehouse use with racks and forklifts or for a more modern use of the space with specialized material handling and automation.

Los Angeles and the Inland Empire are some of the tightest industrial markets in the U.S. Is spillover to adjacent, smaller markets something you observed? If so, are there any hotspots created by this?

Sheehan: Yes, along with several other factors, rising rents and limited availability are pushing occupiers to consider other markets, like Phoenix; Las Vegas; Reno, Nev.; Salt Lake City, etc. This increase in demand in those markets is also pushing land prices and cap rates to historic levels.

Leaving e-commerce aside, what key trends are expected to drive industrial activity in the Inland Empire and L.A. in 2021 and beyond? 

Sheehan: A major driver for demand is the move away from just in time lean supply chain to companies preferring to have more warehouse space for safety stock. Companies can’t afford to have a major disruption in supply chain like what was experienced in the pandemic.

Cold storage warehouse space is also increasing in demand and there are companies looking to do spec development of cold storage warehouses, which we have not seen before. Whether it’s e-commerce or not, pent-up consumer demand will drive the demand for warehouse space in the near term. How long that demand will last and at what levels will dictate the length of this incredible bull run on industrial we are experiencing. 

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Planned industrial project at Southern California Logistics Centre. Rendering courtesy of Stirling Capital Investments

Stirling Development and Prologis are poised to start construction of a massive, build-to-suit industrial facility in the Inland Empire, after signing a lease with a multinational consumer products firm that will occupy the entire project.

Stirling Capital Investments, a joint venture between the two firms, announced it will break ground on the 819,964-square-foot facility in Victorville, Calif., next month. Slated for completion in May 2022, the LEED-designed warehouse and distribution hub is expected to create 100 jobs at Southern California Logistics Centre (SCLC), a sprawling commercial and industrial complex northeast of Los Angeles.

READ ALSO: Will the Inland Empire’s Industrial Boom Continue?

The project will sit on a 42-acre site and will feature energy-efficient design and construction, 40-foot clear height and a smart temperature control system. The developers tapped Fullmer Construction as the general contractor. John McMillan, vice chairman of Newmark, represented the unidentified tenant in the transaction, while Jay Dick, executive vice president of CBRE, represented Stirling.

Hot market

Stirling Capital Investments has so far developed more than 4 million square feet of Class A industrial space at SCLC, a 2,500-acre complex that forms part of the sprawling Global Access Victorville project on the former George Air Force Base. The City of Victorville teamed up with Stirling to redevelop the base into an 8,500-acre multimodal freight transportation center that includes Southern California Logistics Airport and the planned Southern California Rail Complex.

Tenants of the existing developments include Boeing, Keurig Dr Pepper, DHL, FedEx, General Electric and Tesla Corp. The freight hub enjoys air, ground and rail connections, has immediate access to Interstate 15 and US-395 and is less than 100 miles from the Ports of Los Angeles and Long Beach.

Vacancy in the Inland Empire industrial market has reached a historical low of 2.7 percent as of the first quarter, according to a recent report by JLL. The start of the year saw elevated leasing activity, with a 43.9 percent increase in the number of leases signed compared to the first quarter of 2020. However, the total square footage of leases signed dropped by 19.3 percent, given that most of the transactions were smaller than 200,000 square feet.

Absorption remained high during the first three months, as tenant demand outstripped new deliveries for the sixth consecutive quarter, following a year of record leasing activity driven mainly by e-commerce and logistics firms, the brokerage found.

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Image by Pexels via Pixabay.com

Crow Holdings has agreed to sell five industrial properties totaling nearly 2 million square feet in the Inland Empire for $320 million.

The California State Teachers’ Retirement System (CalSTRS) is the buyer of the 11-building portfolio—which, according to CommercialEdge data, represents more than 65 percent of Crow Holdings’ entire Inland Empire industrial footprint.

The transaction is expected to close next month and was completed through the seller’s investment management company.

The properties are located across the Moreno Valley, San Bernardino and Rialto submarkets. Crow Holdings’ entire Inland Empire comprises more than 3 million square feet of industrial assets, CommercialEdge data shows.

Crow Holdings brought to market 574,984 square feet of industrial product this year in the San Bernardino submarket alone, via its Washington Commerce Center, which topped out in February, according to CommercialEdge. Last year, the developer finished work on the 709,081-square-foot Freeway Business Center in Moreno Valley, while also adding just under 600,000 square feet across two properties in San Bernardino.

It is unclear which of these properties were acquired by CalSTRS, but according to the announcement made by Crow Holdings, the traded properties represent newly built industrial product. The portfolio is currently 45 percent leased or agreed to terms.

The public pension plan had about 12.6 percent of its $286 billion budget allocated to real estate investments, as of February 2021, according to its website—and plans to grow its allocation to 14 percent.

Inland Empire Sets First Quarter Record

Despite slowdowns in other sectors, the industrial asset class continues to remain a strong investment in 2021, with Inland Empire spearheading the growth. According to Colliers, industrial vacancy in the market reached a historic low of 1.9 percent in the first quarter, down from 2.6 percent at the end of last year.

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I-10 Logistics Center, Cherry Valley, Calif. Image courtesy of Shopoff Realty Investments

Shopoff Realty Investments just announced that it has obtained $105 million in financing for the development of I-10 Logistics Center, an approximately 1.8 million-square-foot speculative industrial project in Cherry Valley, Calif., in the Inland Empire. Bank OZK provided the loan for Shopoff Realty Investments, which is developing the state-of-the-art logistics center in a joint venture partnership with Artemis Real Estate Partners.

Shopoff Realty and Artemis relied on Mark Strauss and Rob Quarton of Walker & Dunlop to assist in securing the funding for I-10 Logistics.

“There was significant interest in the product type. We had several viable proposals for this financing,” William Shopoff, president & CEO, Shopoff Realty Investments, told Commercial Property Executive.

Bank OZK ultimately came through with a senior-secured construction loan, citing the project’s strong market fundamentals and top-tier sponsorship as reasons for its attraction to the opportunity.

READ ALSO: Top 10 Industrial Projects Under Construction

I-10 Logistics, which will occupy 155 acres near the intersection of I-10 freeway and Cherry Valley Boulevard, has been a long time coming. The Riverside County Board of Supervisors had approved the project in 2017; however, claims against the development slowed the process until July 2020, when the Riverside County Superior Court dismissed all challenges and finalized previous project approvals.

Conceived to help answer the constant call for big-box industrial space in the Inland Empire, the Ware Malcomb-designed I-10 Logistics will consist of an approximately 1 million-square-foot facility and a roughly 800,000-square-foot facility, both of which will feature a 40-foot clear height to allow for maximum storage capabilities and 8-inch slab with no slope to better accommodate tenants utilizing robotics operations. Additionally, the two-building project is being built to qualify for LEED Silver certification.

Shopoff Realty and Artemis have tapped CBRE to handle leasing for the project. KPRS, general contractor, will commence site development this month.

Deepening demand

The Inland Empire is the fifth largest big-box industrial market in North America, with 42.5 million square feet transacted in 2020—up 21 percent year-over-year—the most for any North American market, according to a CBRE report. Net absorption, which totaled 25.1 million square feet in 2020, constituted a 40 percent increase over the previous year.

With fewer project completions on the horizon as a result of limited developable land sites, the market is projected to tighten further in 2021, and the big-box direct vacancy rate is projected to drop from 3.1 percent at year-end 2020 to below 3 percent. And more of the same is forecasted for big-box product for the foreseeable future.

“We believe the demand for this product is long-term in nature,” Shopoff added. “COVID-19 likely accelerated some demand, but we believe the market should remain in balance for many years to come, especially in light of the challenges of getting new product approved.”

I-10 Logistics is on track to reach completion in the summer of 2022.  

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Interstate 95 at Route 395 in Hesperia, Calif. Image via Google Earth

An affiliate of Covington Group Inc. has sold 60 acres of land at Covington’s Hesperia Commerce Center industrial development in Hesperia, Calif., for a build-to-suit project that will house the operations of home and office furniture distributor Modway Inc.

Covington and M.F. DiScala & Co. Inc., co-developer of the 200-acre Hesperia Commerce, sold the vacant land in the coveted Inland Empire region for $20.5 million to Exeter Property Group, which will develop the 1 million-square-foot build-to-suit facility on Modway’s behalf.

READ  ALSO: Top 10 Industrial Projects Under Construction

CBRE worked on behalf of the new ownership to arrange the transaction, which marks Covington’s first land sale for a build-to-suit project at Hesperia Commerce. The sprawling industrial campus will ultimately feature 3.4 million square feet of state-of-the-art warehouse and distribution buildings, in addition to a 15-acre site designed to accommodate smaller service-commercial industrial facilities. Hesperia Commerce will also offer significant truck parking.

Modway’s new build-to-suit facility will sprout up near the intersection of Interstate 15 and Route 395. It will be more than three times the size of its current distribution center, an approximately 310,500-square-foot building roughly 30 miles away in Fontana. If all goes as planned, the company’s new home at Hesperia Commerce will be up and running come the fall of 2021.

Inland Empire Reigns

In a press release, Covington noted that Hesperia Commerce was conceived to provide industrial users with 1 million-square-foot-plus facilities that can accommodate potential e-commerce needs—and those are just the facilities that have continued to grow in demand in the Inland Empire over the last few years.

The consequences of the COVID-19 pandemic only made the Inland Empire—long one of the tightest industrial markets in the U.S.—even tighter. “The region is a major hub for e-commerce retailers, 3PL operators and almost everything associated with the logistics sector. In many ways, the IE has been the beneficiary of the change in how consumers acquire products during the crisis,” a fourth quarter report by Voit Real Estate Services noted.

READ ALSO: Will the Inland Empire’s Industrial Boom Continue?

The Inland Empire closed 2020 firing on all cylinders, with positive net absorption totaling 5 million square feet for the fourth quarter. The average asking lease rates reached a new high-water mark and the vacancy rate dropped to just 3.1 percent in the face of record levels of spec development and a constant flow of new deliveries, according to the Voit report. Hesperia performed even better on vacancies, with a rate nearing just 2.3 percent.

All signs indicate that the Inland Empire’s industrial market will continue to thrive. “I do believe this trend will persist as availabilities continue to decline and it becomes increasingly difficult to find Class A product,” Juan Gutierrez, senior vice president & partner at Voit Real Estate Services, wrote in the firm’s fourth quarter 2020 Inland Empire report. “The Inland Empire is one of the few locations where developers can find land to build the facilities that today’s users are demanding.”

The post Covington Sells Land in the Inland Empire for 1 MSF Build-to-Suit appeared first on Commercial Property Executive.

Fontana Logistics Center. Image courtesy of Black Creek Group

The high-demand Inland Empire industrial market continues to cry out for more accommodations and Black Creek Group is answering the call with two new projects. The real estate investment management firm has just announced its plans to develop Etiwanda Commerce Center and Riverside Logistics Center, adding a total of 1.7 million square feet of Class A industrial space to the Southern California region.

READ ALSO: Ramping Up Warehouse Safety

Black Creek plans to erect Etiwanda Commerce Center on the 64-acre site of a decommissioned power plant in Rancho Cucamonga in the heart of the Inland Empire West. The 1 million-square-foot industrial facility will also include an additional trailer and auto parking. Roughly 20 miles away in the Inland Empire East, Black Creek will build Riverside Logistics Center, adding a 683,000-square-foot option to the market.

Securing developable acreage for big-box projects is no simple feat in the Inland Empire, particularly in the western half of the market, where land is scarce, according to a fourth quarter 2020 report by Newmark. However, Black Creek is accustomed to working around such challenges, having completed more than 3.1 million square feet of projects in the Inland Empire since 2016. “With local teams in place we not only have in depth knowledge of the markets in which we operate, but we are able to act swiftly to secure transactions as they become available,” Gregg Boehm, managing director of Black Greek Group, told Commercial Property Executive. “Our teams also have strong, longstanding relationships in place, which are critical in finding these kinds of deals in a tight market. Additionally, our development expertise means we are able to fully understand a project and the potential value it may bring.”

Perris Distribution Center III. Image courtesy of Black Creek Group

Black Creek expects to commence demolition of existing structures on the Etiwanda Commerce Center site in the second quarter and plans to begin construction in the first quarter of 2023. Cushman & Wakefield, which helped the company complete the land acquisition for the project, will take on leasing responsibilities. Construction of Riverside Logistics Center will get off the ground in the second quarter of 2021.

Demand central

With the announcement of plans for Etiwanda Commerce Center and Riverside Logistics Center, it appears Black Creek’s timing is right. At the close of 2020, only four Class A buildings with 500,000 square feet or more—existing or under construction—were available for lease in the Inland Empire, so if current tenant demand persists as industry experts anticipate, the market runs the risk of running out of space in this segment by mid-2021, according to the Newmark report. The average vacancy rate in the Inland Empire, which dropped year-over-year from 3.6 percent to 3.1 percent in the fourth quarter of 2020, has remained below 5 percent for 34 consecutive quarters. There appears to be no end in sight to the demand for space in the area.

“It is anticipated that by 2025, the U.S. will need another 1 billion square feet of industrial space as e-commerce demand continues to accelerate and the Inland Empire market is well-poised to capture a large portion of this demand given its close proximity to two of the largest ports in the U.S., easy access to major transportation routes and the growing population in the area,” Boehm added.

Sierra Industrial Center. Image courtesy of Black Creek Group

In addition to Etiwanda Commerce Center and Riverside Logistics Center, Black Creek is edging closer to delivering another 624,000 square feet of Class A warehouse distribution space with the impending completion of the 251,000-square-foot Perris Distribution Center III in Perris in the Inland Empire East and the 193,000-square-foot Fontana Logistics Center and 180,000-square-foot Sierra Industrial Center, both of which are in Fontana in the Inland Empire West. With the completion of the two newly announced projects, Black Creek’s Inland Empire footprint will total approximately 9 million square feet.

The post Black Creek Plans 1.7 MSF of Inland Empire Industrial Product appeared first on Commercial Property Executive.

Almeria Logistics Center. Rendering courtesy of Transwestern Development Co.

Transwestern Development Co. has broken ground on a pair of speculative industrial projects totaling more than 483,500 square feet in a bid to capitalize on growing e-commerce demand in Southern California’s Inland Empire. Located next to Interstates 10 and 15 in the city of Fontana, the developments are slated for completion later this year.

Canadian real estate investment giant QuadReal Property Group is the equity partner on the 235,894-square-foot Almeria Logistics Center. The developer partnered with Transwestern Investment Group on the other project, I-10 Commerce Center, which will span two buildings of 172,219 square feet and 75,428 square feet. 

READ ALSO: Will the Inland Empire’s Industrial Boom Continue?

Almeria Logistics Center, sited near Almeria Avenue and Foothill Boulevard, will offer easy access to Interstate 15 and is scheduled for completion in the third quarter of the year. I-10 Commerce Center is located near the intersection of Boyle and Juniper avenues and expected to be completed in the fourth quarter.

Both facilities are geared toward the needs of sophisticated e-commerce and logistics users, with expansive building volumes, 36-foot clear height, ESFR sprinkler systems and superior dock-high loading as well as large concrete truck courts. Colliers International has been tapped to lease up both projects.

Inland Empire Boom

Fontana, located about 50 miles east of Los Angeles, is a key node of the Inland Empire industrial market, which saw 39.5 million square feet of gross absorption in 2020, according to Transwestern research. Absorption edged down from the 41.1 million square feet reported in 2019 due to a pandemic-related slowdown in construction deliveries.

Transwestern Development Co. joins other real estate heavyweights that are boosting their industrial footprint in the Inland Empire West market. Earlier this month, Brookfield Properties announced it had acquired a 15-acre development site in Fontana where it will build a 332,000-square-foot, Class A distribution center. The company expects to wrap up the project, which features 36-foot clear heights, in the spring of 2022.

Elsewhere in Fontana, Brookfield is also working on its Slover Elm Commerce Center at Slover and Elm Avenues. The company, which dubs Inland Empire West the “premier big box market in the U.S.,” broke ground on the 192,000-square-foot, rear-load logistics property last month.

Rexford Industrial Realty Inc. is also growing in the submarket. In December, the REIT acquired a portfolio of four single-tenant industrial buildings totaling 632,497 square feet in Fontana, Montclair and Rialto for $129.4 million.

The post Transwestern Kicks Off Inland Empire Industrial Projects appeared first on Commercial Property Executive.

Image by CHUTTERSNAP via Unsplash

The Inland Empire, historically regarded as a key industrial market, saw record-level demand for industrial space as online sales surged during the pandemic. In the fourth quarter of 2020, some 19.1 million square feet of industrial space was leased, slightly down from 19.8 million square feet in the third quarter, according to JLL’s fourth-quarter market report. Although around 19.7 million square feet of new product was delivered in 2020, supply still lags demand, the same document revealed.

READ ALSO: Industrial Real Estate 2021 Expectations

Due to limited land availability, however, it is increasingly more challenging to fulfill the need for industrial space in the region. DAUM Commercial Real Estate Executive Vice Presidents Gus Andros and Andrew Lara discuss whether the Inland Empire has room for more growth and how the increased demand is reshaping market fundamentals.

The pandemic has boosted the need for industrial space across the country. How has the Inland Empire benefited from this sudden increase in demand?

Gus Andros, Executive Vice President, DAUM Commercial. Image courtesy of DAUM Commercial

Andros: Historically, the Inland Empire has benefited due to its proximity to the  Los Angeles and Long Beach ports of entry—where the product has come in from Asia—as well as major population centers. It has long been a key region for major distribution and e-commerce facilities.

The rapid increase of demand for online shopping options due to the pandemic has created an even greater need for industrial facilities in the region, especially those ranging over 100,000 square feet and those that best accommodate last-mile delivery.

With industrial continuing to prove itself as one of the more in demand, steady and relatively safe sectors of real estate, more institutional capital is flowing into the region. Many businesses are relocating to the Inland Empire as they are priced out of Los Angeles submarkets like City of Industry, Mid-Cities and the South Bay.

Demand is outpacing supply which, in turn, is impacting land values, sale prices and lease rates significantly.

How has increased demand impacted industrial development in the region? What can you tell us about the current development pipeline?

Lara: Prior to the pandemic, the Inland Empire was a top-performing industrial market in Southern California and even nationally. Over the last 10 years, developers active in the region have been continuously searching for available land.

Even before the accelerated demand for e-commerce space, we were already seeing a move toward more industrial development into the eastern area of the Inland Empire, as far as 60 to 90 or more miles from the ports. For example, we recently sold a site for a 1 million-square-foot, build-to-suit industrial building, located on a 60-acre parcel in Hesperia.

What type of industrial facilities are most popular among tenants?

Andros: Industrial facilities that feature best-in-class distribution amenities such as high clear heights, multiple dock doors and secured truck courts are the most attractive to today’s tenants.

READ ALSO: Industrial Real Estate Clear Leader in Moody’s Report

Where have you seen the most leasing activity?

Lara: We are seeing strong activity throughout the Inland Empire, in the traditional western hubs as well as further east, including the High Desert area.

Tell us about the main challenges the Inland Empire’s industrial sector had to face in 2020.

Andros: The main challenge that the Inland Empire’s industrial sector faced in 2020 was keeping up with the velocity of tenant demand. The acceleration of e-commerce on a large scale created a further sense of urgency, putting pressure on occupancy timelines, especially with buildings nearing completion.

What are some of the emerging markets within the Inland Empire? Does the region provide room for more growth?

Andrew Lara, Executive Vice President, DAUM Commercial. Image courtesy of DAUM Commercial

Lara: Some of the emerging markets for industrial development and activity are High Desert—Hesperia, Victorville and Apple Valley—as well as South Perris and Beaumont/Banning to the east.

While there is absolutely room for more growth into these markets, developers must get creative and adjust their strategies to accommodate markets with limited land availability, as many areas of the Inland Empire West have become infill submarkets like those in Los Angeles.

How do you expect the Inland Empire’s industrial landscape to evolve in 2021 and beyond?

Andros: As brokers with decades of experience in the Inland Empire, we have helped countless investors and tenants alike secure rare and lucrative opportunities to develop, acquire or lease space in the area. We have been successful at doing so because we have identified alternatives beyond their typical submarkets and requirements.

Normally in December and early January, tour requests and proposal submissions typically decrease. Fortunately, that has not been the case this year. There has been heightened activity immediately from the start of 2021 and we expect this strong momentum to continue. As activity continues to increase, we will see lower vacancy rates with increased competition.

The post Will the Inland Empire’s Industrial Boom Continue? appeared first on Commercial Property Executive.

7817 Woodley Ave., Van Nuys, Calif. Image via Google Street View

Rexford Industrial Realty Inc. spent the first month of the New Year making a handful of diverse acquisitions, shelling out $72.7 million on five assets in separate transactions. The collection, located in various Southern California infill markets, includes three industrial facilities totaling approximately 177,000 square feet, in addition to an industrial storage site and a redevelopment site.

READ ALSO: Logistics Rents Climb Amid COVID-19 Crisis: Prologis

Having closed 2020 with a slew of purchases, Rexford’s continuation of its shopping spree into 2021 dovetails with the REIT’s broader strategy. “We see a very substantial opportunity to consolidate well beyond our current 1.5 percent market share within our highly fragmented, exceptionally large infill Southern California industrial market,” Michael Frankel, co-CEO of Rexford Industrial Realty Inc., said during the company’s third quarter 2020 earnings conference call on Oct. 21, 2020.

Through the three newly announced transactions involving built properties, Rexford has enhanced its holdings by an aggregate 177,000 square feet in Southern California. For starters, the REIT increased its footprint in the high-demand Inland Empire with the addition of 5002-5018 Lindsay Court, a 65,000-square-foot, two-tenant building sited on nearly 3 acres in Chino. The property cost $12.7 million and will benefit from a repositioning and re-tenanting under the new ownership.

5002-5018 Lindsay Court, Chino, Calif. Image via Google Street View

Rexford also spent $20.2 million on the purchase of the 74,800-square-foot property at 17907-18001 S. Figueroa St., in Gardena, part of the Los Angeles–South Bay submarket. Currently 100 percent leased, the multi-tenant property also features 5.6 acres and offers upside potential via value-add repositioning or ground-up redevelopment.

In the Los Angeles–San Fernando Valley submarket, Rexford purchased 7817 Woodley Ave., a 36,900-square-foot property located on 1.6 acres in Van Nuys. The fully leased, single-tenant industrial building carried a price tag of $10 million, including the assumption of existing debt, and it completes the company’s Van Nuys Airport Industrial Center portfolio purchase of December 2020.  

The two remaining acquisitions include 514 E. C St. in Wilmington in the South Bay submarket, and 8888-8892 Balboa Ave. in San Diego. The property at 514 E. C St. is a fenced trucking and container storage facility featuring 2.5 acres of paved yard and a 3,400-square-foot office structure adjacent to the Port of Los Angeles. Rexford purchased the asset for $10 million in a sale-leaseback transaction with the tenant. And Rexford paid $19.8 million for the nearly 6-acre San Diego property at 8888-8892 Balboa Ave., where the REIT plans to develop a 120,900-square-foot Class A industrial building.

Rexford, which had completed 77 percent of its transactions in the first three quarters of 2020 by means of off-market or lightly marketed deals, closed each of the five newly announced purchases via off-market transactions. The company relied on cash on hand and 1031 exchange proceeds to finance the acquisitions.

Pandemic-era purchasing

While many investors have remained on the sidelines in favor of a wait-and-see approach amid the economic fallout from the COVID-19 health crisis, Rexford has remained highly acquisitive; the REIT continued bolstering its portfolio throughout 2020. “If you didn’t know the word COVID, you’d probably be thinking things were just pretty typical in terms of our business,” Howard Schwimmer, co-CEO of Rexford Industrial Realty Inc., said during the conference call. Rexford’s acquisition pipeline remains strong. In late January, the REIT entered into an agreement to purchase an 83-acre industrial property in Los Angeles County via a sale-leaseback transaction valued at $217.1 million.

Despite a certain degree of wariness among investors—industrial sector investment volume in 2020 was three-quarters that of 2019, according to a CommercialEdge report—Rexford does not expect to benefit from any pandemic-related fire sales. “There’s a significant amount of demand in the [industrial] market. Vacancy is still incredibly low. So, when you really look at the entirety of the market, there is not really any distress that’s out there,” Schwimmer added. “There’s a few things going on here and there, but that’s not leading to sellers thinking, because of the pandemic, they need to sell their real estate.”

The post Rexford Industrial Seals Deals Worth $73M appeared first on Commercial Property Executive.

North Sierra Distribution Center. Rendering courtesy of Brookfield Properties

Brookfield Properties is expanding its Southern California footprint with the acquisition of a 15-acre development site in the Inland Empire West submarket.

READ ALSO: Logistics Rents Climb Amid COVID-19 Crisis: Prologis

The site, at the northeast corner of Sierra and Casa Grande avenues in Fontana, Calif., represents “a rare, shovel-ready opportunity” to construct a 332,000-square-foot Class A distribution building, according to Brookfield.

North Sierra Distribution Center will feature 36-foot clear heights, 6,000 square feet of office space, a fully secured 185-foot truck court and 38 dock-high doors. It’s expected to be completed in the spring of 2022.

A Brookfield spokesperson did not reply to Commercial Property Executive’s request for additional information.

Rebuilding phase

Brookfield noted that over the past 12 months, the company has acquired 16 properties in Southern California totaling more than 3.5 million square feet, bringing its portfolio in the region to 39 assets encompassing more than 6 million square feet.

Also in Fontana, Calif., Brookfield broke ground on its Slover Elm Commerce Center last month. The 192,000-square-foot, rear-load logistics property will feature 32-foot clear heights, 5,700 square feet of office space, a secured 185-foot truck court and 23 dock-high doors.

Brookfield VP of Investments Paul Jones noted that the Slover Elm asset is the company’s first spec logistics project in Southern California in a couple of years.

Brookfield’s Southern California activity is part of the company’s push to rebuild its national development platform after having sold IDI Logistics for a reported $3.5 billion to Ivanhoé Cambridge.

The Inland Empire West industrial market has an average overall vacancy of just 2.8 percent and saw nearly 6.4 million square feet of net absorption in 2020, on an inventory of 303.2 million square feet, according to a fourth-quarter report from Cushman & Wakefield. Almost 8.9 million square feet of space was under construction at year’s end.

Overall weighted average net rent for warehouse-distribution space was $0.71, also according to Cushman & Wakefield.

Barely a month ago, Brookfield Asset Management Inc. announced that it had made an offer to acquire the remaining shares of Brookfield Property Partners, the parent company of Brookfield Properties. The cost of taking Brookfield Property Partners private reportedly would be about $5.9 billion.

The post Brookfield Properties Plans Inland Empire Industrial Project appeared first on Commercial Property Executive.

Slover Elm Commerce Center. Image courtesy of Brookfield Properties

Brookfield Properties is expanding its portfolio of industrial properties in Southern California with the groundbreaking of Slover Elm Commerce Center in Fontana. The company expects to complete the speculative development in the fall of 2021.

READ ALSO: Rockefeller Group Sells Inland Empire Properties for $81M

The 192,000-square-foot Class A rear-load distribution project will be built on a 8.75-acre site with 32-foot clear heights, 5,700 square feet of office space, a secured 185-foot truck court and 23 dock-high doors. Located at the northeast corner of Slover and Elm Avenues in the Inland Empire West, Slover Elm Commerce Center will have nearby access to Interstates 10 and 15 and will also be situated near Ontario International Airport.

Rebuilding SoCal industrial portfolio

Paul Jones, Brookfield’s vice president of investments, said in prepared remarks that Slover Elm Commerce Center is Brookfield’s first speculative logistics project in Southern California since 2018. He added in his prepared statement that Brookfield has been focused on rebuilding its national development platform after the sale of IDI Logistics, a developer and manager of logistics real estate in the U.S. Back in January 2019, Brookfield sold IDI Logistics for a reported $3.5 billion to Ivanhoé Cambridge, which later partnered with Oxford Properties to share ownership of the logistics real estate company.

Beyond Slover Elm Commerce Center, Brookfield is also looking at other opportunities in Southern California, due to the area’s high population density and institutional liquidity. In the past 12 months, the company has spent $1.7 billion to acquire 10 industrial and logistics properties totaling 2.7 million square feet. The recent acquisitions bring Brookfield’s Southern California portfolio to 6 million square feet spread throughout 39 assets.

The post Brookfield Properties Breaks Ground on Inland Empire Project appeared first on Commercial Property Executive.

Fontana Santa Ana Industrial Center. Image courtesy of Rockefeller Group

Rockefeller Group has closed on the disposition of two recently completed industrial properties totaling 500,000 square feet in the Inland Empire. Separate buyers acquired the Class A, mid-size assets for a combined $80.8 million.

READ ALSO: Vaccine to Trigger Q3 CRE Recovery: Report

Haralambos Leasing Co. is the new owner of the 297,161-square-foot Fontana Santa Ana Industrial Center located at 10965 Banana Ave. in Fontana, Calif. Rockefeller Group developed the project in a partnership with MBK Real Estate. Last August, Haralambos was able to sell a 255,900-square-foot warehouse in suburban Los Angeles to The Los Angeles Regional Food Bank, after more than a decade-long search for a buyer.

Lone Oak – Moreno Valley LLC, an entity associated with Reyes Holdings, paid $26.8 million for the 203,944-square-foot Centerpointe Commerce Center, situated at 14180 Frederick St. in Moreno Valley, Calif.

Fontana Santa Ana Industrial Center is located on roughly 14 acres, just off Interstate 10 and 6 miles east of Ontario International Airport. The developers bought the ensemble of 11 parcels upon which the building was erected for $15.7 million and broke ground on the project last March. National Bank provided a $24.4 million construction loan.

Situated near Interstate 215, Centerpointe Commerce Center is positioned on an 8.8-acre lot. Rockefeller picked up the property in the first half of 2019, for $5.9 million and kicked off construction in September 2019.

Lee & Associates represented Rockefeller in both transactions. Paul Earnhart, Doug Earnhart, Brian Pharris and Ryan Earnhart collaborated with Juan Gutierrez from Voit Real Estate Services in the Fontana sale, while Tal Siglar of Cushman & Wakefield Ontario represented Haralambos Leasing Co.

The Lee & Associates team representing Rockefeller in the Moreno Valley disposition included Bill Heim, Finn Comer, Alex Heim and Nesha Ritchie, while Tim O’Rourke of JLL’s Industrial Services Group in Los Angeles represented the buyer.

The post Rockefeller Group Sells Inland Empire Properties for $81M appeared first on Commercial Property Executive.

29010 Ave. Paine. Image via Google Street View

Rexford Industrial Realty Inc. has acquired a four-building industrial portfolio and an outdoor storage property, all in Southern California, for a total of $103.1 million. Both acquisitions closed on Dec. 31, 2020.

READ ALSO: Office Deals Falter, Though the Suburbs Fare a Bit Better: NAR

The portfolio’s seller, which was not identified, contributed its properties in an UPREIT, off-market transaction.

The portfolio consists of four single-tenant industrial properties in the San Fernando Valley, Mid-Counties and Inland Empire West submarkets and was valued at $86.3 million, or $208 per square foot. It totals 414,744 square feet on 25.23 acres. The properties are 100 percent leased at rents that Rexford estimates to be 15 percent below market rates.

The California properties are at:

• 29010 Ave. Paine, Valencia (100,157 square feet);
• 29010 Commerce Center Drive, Valencia (117,151 square feet);
• 13369 Valley Blvd., Fontana (105,041 square feet); and
• 6635 Caballero Blvd., Buena Park (92,395 square feet).

This purchase was completed using 1.8 million newly issued operating partnership units, with a value of $47.93 per share, which the seller can redeem on a one-to-one basis for shares of Rexford’s publicly traded common stock.

Rexford also acquired a 4.83-acre industrial outdoor storage property at 1235 S. Lewis St. in Anaheim, in the Orange County–North submarket, for $16.8 million, or $80 per land square foot. The site is near Anaheim’s Platinum Triangle area and is improved with a 62,480-square-foot building.

Rexford estimates that the rent at which the property is currently leased is 48 percent below market rates. The REIT therefore is considering redeveloping the property with a new 105,100-square-foot Class A distribution facility designed to serve last-mile logistics providers.

Strong surge late in the year

Over the course of 2020, Rexford acquired $1.2 billion in industrial properties, representing 5.0 million square feet. This brought the company’s total portfolio to 248 properties encompassing about 31.5 million square feet.

It was mostly a flurry of activity in the fourth quarter, all of it in Southern California, that got Rexford to such an impressive number:

• In mid-November, the REIT announced the $339 million acquisition of five buildings in Greater Los Angeles.
• In early December, two deals were disclosed, one for an 18-building portfolio next to Van Nuys Airport for $154.6 million, and the other a $129.4 million acquisition of four single-tenant industrial buildings in the Inland Empire.
• And a week before Christmas, Rexford announced that it had acquired, for $110.6 million, a six-building logistics portfolio and an outdoor storage yard.

The post Rexford Industrial Realty Pays $103M for 5 Properties appeared first on Commercial Property Executive.

Santa Ana Commerce Center. Image courtesy of Stream Realty Partners

Cabot Properties has already landed a tenant for Santa Ana Commerce Center, its recently completed industrial property in Fontana, Calif. HiPacking Corp. signed a prelease for the 160,000-square-foot speculative industrial development that Stream Realty Partners built on behalf of Cabot Properties.  

Located at 14144 Santa Ana Ave., Santa Ana Commerce Center was constructed with two ground level doors, 14 dock high doors, 32-foot clear heights, 1,200 amp electrical service, 52- by 50-feet bay spacing, 89 parking stalls, ESFR sprinkler system and 6,211 square feet of office space.

READ ALSO: How Automation Will Fill Supply Chain Gaps: Report

CBRE’s Josh Hayes and Eloy Covarrubias along with Colliers International’s Tom Taylor and Steve Bellitti were in charge of leasing the property.  

Stream Realty secured all the necessary approval and permits for the project in the fourth quarter of 2019 and began construction shortly after in the first quarter of 2020. The construction process for Santa Ana Commerce Center went ahead despite the COVID-19 pandemic and reached substantial completion this November. Stream has previously worked with Cabot Properties, after being tapped to manage an approximately 1.6 million-square-foot industrial portfolio of seven warehouses in California’s Inland Empire.

Capitalizing on Inland Empire’s industrial demand

According to Stream Realty, the strategy to build Santa Ana Commerce Center began with identifying a well-located site that was west of Interstate 215 and was zoned for industrial use. Stream Realty’s strategy also focused on building a site with efficient coverage, functional divisibility and flexible ingress and egress.

The new industrial property attracted a lot of interest from varying types of tenants, according to Stream Realty. Scott Sowanick, senior director for Stream’s Industrial Development Services division, said in prepared remarks that the Inland Empire’s industrial market is still seeing demand despite the uncertain market.

The post Cabot Properties Lands Tenant for New Industrial Asset appeared first on Commercial Property Executive.

Image by Nick Saltmarsh via Flickr

Rexford Industrial Realty Inc. continues to expand with the acquisition of a portfolio of four single-tenant industrial buildings in Southern California’s Inland Empire for $129.4 million. The acquisition was funded with cash on hand.

READ ALSO: Crow Holdings Sells Stake in 6 MSF Industrial Portfolio

The properties total 632,497 square feet on 30.2 acres, averaging the purchase price to $205 per square foot.

The portfolio is currently 63 percent leased to high-quality national tenants focused on logistics and wholesale trade; lease-up on the vacant space is expected in the near-term, according to Rexford.

The properties, all in the Inland Empire–West submarket, are:

• 4039 State St., Montclair (139,000 square feet);
• 10156 Live Oak Ave., Fontana (236,912 square feet);
• 10694 Tamarind Ave., Fontana (100,000 square feet); and
• 2520 W. Baseline Road, Rialto (156,585 square feet).

The portfolio reportedly consists of newly built, low-finish logistics facilities appealing to a wide range of e-commerce and distribution users with 32-foot clear heights, extensive dock-high loading, ESFR fire sprinklers, and excess container storage in secured truck courts.

Rexford expects the stabilized unlevered yield on its investment in the portfolio to be approximately 4 percent, with ongoing 3 percent or greater annual contractual rent increases thereafter.

The seller(s) were not disclosed. However, the previous owner of the Montclair and Rialto properties was The Carlyle Group, of Washington, D.C., and the previous owner of 10156 Live Oak was  Oakmont Industrial Group, of Atlanta, according to information provided to Commercial Property Executive by CommercialEdge.

Rexford co-CEOs Howard Schwimmer and Michael Frankel noted in a prepared statement that the REIT’s acquisitions so far this year have surpassed $1 billion and that its Southern California portfolio now exceeds 30 million square feet. 

Gone on a tear

Schwimmer and Frankel and their company have indeed been amazingly active buyers in SoCal over roughly the past year.

• Almost simultaneously with the above deal, they announced the $154.6 million purchase of an 18-building industrial portfolio next to the Van Nuys Airport.
• In November, Rexford bought a total of five industrial properties in the Greater Los Angeles area, paying $339 million for more than 1.1 million square feet.
• This past July, the REIT picked up five infill industrial properties in Greater Los Angeles for $73.2 million.
• In March, Rexford acquired a 10-building portfolio of SoCal properties, a mix of single- and multi-tenant assets, for $203.2 million.

These were preceded in late 2019 by two deals that added three buildings to Rexford’s SoCal holdings.

Warehouse and distribution space in the Inland Empire–West submarket saw about 1.4 million square feet of net absorption in the third quarter, on an inventory of 286 million square feet, according to a report from JLL. Average total vacancy is 4.5 percent, and the average asking rent is $.66 per square foot, also according to JLL.

The post Rexford Industrial Realty Acquires Inland Empire Portfolio for $129M appeared first on Commercial Property Executive.

Diaz Commerce Center. Image courtesy of MCA Realty

MCA Realty has sold Diaz Commerce Center, a 131,577-square-foot, multi-tenant industrial asset in Temecula, Calif., to a local investor for $14 million. Lee & Associates brokered the transaction. 

The former owner had acquired the two-building property for $10 million in 2018, leasing the remaining space shortly after the deal. Following the purchase, MCA had upgraded the asset by adding LED lighting, expanding parking and securing the truck court with fencing.

Built in 1975, the asset is located on 10 acres at 27711 Diaz Road, near Interstate 15 in a dense industrial/flex corridor. The structures have 20-foot clear heights, 90-foot truck courts and parking at a ratio of 2.3 spaces per 1,000 square feet, according to CommercialEdge.

Barret Woods and Scott Stewart of Lee & Associates arranged the deal, with Stewart acting on behalf of the seller and Woods representing the buyer. This past summer, MCA Realty sold another of its Southern California industrial assets. Pinnacle Business Park in Escondido, Calif., changed hands for $8.3 million.

The post MCA Realty Sells 132 KSF Inland Empire Industrial Property appeared first on Commercial Property Executive.

Shops at Gateway to Temecula. Image courtesy of Hanley Investment Group

Hanley Investment Group has facilitated the disposition of The Shops at Gateway to Temecula, an 8,325-square-foot retail property in Temecula, Calif. A private investor purchased the multi-tenant asset from Pacific Real Estate for $7.2 million, at a 5.5 percent cap rate. 

Vice President Austin Blodget, Executive Vice President Eric Wohl and Associate CJ Kiehler made up the Hanley team representing the seller, while Brian Melkesian of Lee & Associates worked on behalf of the buyer.

Built in 2018, the property is located on a 2-acre parcel at 30010 Temecula Parkway, near Interstate 15. The asset includes a free-standing Starbucks as well as a building with three tenants: Verizon, The Pizza Press and Sakura Sushi. A recently constructed LA Fitness center acts as shadow anchor for the site.

In August, Hanley brokered the sale of a 100,000-square-foot retail property in Page, Ariz. The asset changed hands for $8.5 million in a 1031 exchange.

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Stewart Plaza. Image courtesy of CBRE

CBRE has brokered the sale of Stewart Plaza, an 84,498-square-foot medical office campus in Upland, Calif. Harbor Associates and The Bascom Group acquired the asset for $10.3 million. CBRE’s Anthony Delorenzo, Gary Stache and Sammy Cemo represented the seller in the off-market transaction, while Shaun Moothart, Jennifer Ansari, Dana Summers and Bruce Francis arranged the financing for the project with Ready Capital Structured Finance.

Completed in 1987, the two three-story buildings at 400 and 440 Mountain Ave. consist of suites ranging from 493 to 9,138 square feet. The multi-tenant property was 56 percent leased at the time of sale. Situated 1 mile from Interstate 10, which connects Upland to the rest of southern California, Stewart Plaza sits on a five-acre lot in an opportunity zone.

Harbor Associates revealed plans for a multimillion-dollar capital improvement program, which will include upgrades to the entry and lobby, elevators, a new roof and replacing the HVAC units in both buildings. Additionally, the refurbished Spanish-style property will receive LED lighting retrofits, new signage and will feature rent-ready spec suites.

The joint venture owns a portfolio of 28 office buildings in southern California and Colorado, consisting of more than 3.7 million square feet, according to Bascom Managing Partner Jerry Fink. In March, Harbor Associates paid $34.2 million for a four-building office park in Carlsbad, Calif.  

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728 W. Rider St. Image courtesy of Duke Realty Corp.

Duke Realty Corp. has broken ground on a 1.2 million-square-foot speculative distribution facility in Southern California’s Inland Empire, the company’s eighth project in the submarket.

READ ALSO: Buildings of Tomorrow: Future Warehouses

The development, at 728 W. Rider St. in Perris, Calif., is slated for delivery in the summer of 2021. The 55.2-acre site reportedly offers convenient access to the I-215 freeway and other major interstates.

The project is being built to LEED Silver standards and will feature 40-foot clear height, level floors, 241 dock doors, 344 trailer stalls, 442 car parking spaces and four grade-level loading doors.

Nancy Shultz, senior vice president of Duke Realty’s Southern California operations, said in a prepared statement that Duke Realty has grown its Southern California footprint with more than $1 billion in development starts over the past eight years, accommodating tenants’ needs for large blocks of distribution space. She added that Duke currently has more than 14.8 million square feet of space in Southern California and a further 3.1 million square feet in the development pipeline.

According to Chris Burns, executive vice president of west and central regions at Duke Realty, about one third of the company’s leasing and development activity across the U.S. is related to e-commerce and, as the country continues to see significant increases in online retail transactions due to the pandemic, demand for more distribution space in tier one markets like Southern California is expected to remain strong.

Running cold and hot

The Inland Empire has just finished a record quarter for industrial leasing volume, as absorption hit 5.5 million square feet, according to a third-quarter report from JLL. Rents increased by 1.6 percent from the second quarter, even as 8.2 million square feet of new space (nearly 40 percent preleased) was delivered. JLL predicts a possible shortage of space, especially in large blocks, over the next 12 to 18 months, as e-commerce continues to surge.

Logistics facility activity has been brisk in the Inland Empire in recent months. In a July sale-leaseback, Latitude 36 Foods sold 98,900 square feet of cold storage space in Corona, Calif., to a joint venture of Condor Cold Storage and AEW Capital Management.

In early September, Amazon opened a 640,000-square-foot fulfillment center in Beaumont, the e-commerce behemoth’s 14th center in the Inland Empire. And at the end of September, CT Realty and PGIM Real Estate broke ground on what will eventually be a 4.4 million-square-foot logistics project in Jurupa Valley.

The post Duke Realty Breaks Ground on 1.2 MSF Distribution Facility appeared first on Commercial Property Executive.

31150 Temecula Parkway. Image courtesy of Cushman & Wakefield

Anchor Health Properties, in a joint venture with an existing institutional equity partner, has acquired a two-building, 42,857-square-foot property in Temecula, Calif. Barnhart-Reese Construction sold the Class A asset, according to Yardi Matrix information. Public records show the medical office buildings changed hands for $23 million and the buyer financed the purchase with a $13.4 million loan from Capital One. Cushman & Wakefield assisted the seller in the deal.

Completed in 2015, the two facilities occupy more than 5 acres at 31150 and 31170 Temecula Parkway. According to Cushman & Wakefield, the two-story buildings are fully leased to a mix of clinical tenants providing urgent care, cardiology, gastroenterology, family medicine and pediatric care.

Located some 2 miles southeast of downtown Temecula, the property is down the street from Temecula Valley Hospital, a 140-bed facility operated by United Health Services. Interstate 15 is 1 mile west.

Cushman & Wakefield’s Travis Ives, Gino Lollio and Scott Niedergang with the U.S. Healthcare Capital Markets Team negotiated on behalf of the seller.

The transaction closed a few days after Anchor Health had purchased a two-building, 78,690-square-foot medical office portfolio in Germantown, Tenn. Cypress Equities sold the assets for $32.8 million.

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6075 Lance Drive. Image courtesy of Dedeaux Properties

A partnership between Dedeaux Properties and Artemis Real Estate Partners has closed on the $44.4 million disposition of a 361,346-square-foot distribution center in the Inland Empire. The buyer, office furniture manufacturer Loctek Ergonomic, will relocate from a facility in Livermore, Calif.

The building, located at 6075 Lance Drive in Riverside’s Sycamore Canyon Business Park, marks the second divestment the partnership has made in the area this year. In February, Yardi Matrix shows TA Realty paid more than $130 million for Dedeaux’s other, 1 million-square-foot property just to the south.

Loctek’s new property delivered in October 2019 and boasts a range of features, with 32-foot clear heights, 37 loading docks and two drive-in doors. As part of the sale transaction, Dedeaux will implement tenant improvements, adding extra dock levelers, lighting with motion sensors and a backup power station. The building’s secured truck courts have parking for 53 trailers and auto parking is available on-site for nearly 170 vehicles. The structure also has 7-inch Ductilecrete concrete flooring and ESFR fire sprinkler systems. 

Colliers International’s Ian DeVries, Chris DeVries and Patricia Uchytil acted on behalf of the seller in the deal.

Despite the pandemic’s headwinds for commercial real estate, industrial investments have thus far remained relatively healthy—even thriving—due to the rapid growth of e-commerce. Both large-scale distribution centers and last-mile facilities continue to be in demand, though absorption of new deliveries could fall before the end of the year.

The post Dedeaux Properties JV Sells Inland Empire Warehouse for $44M appeared first on Commercial Property Executive.

READ ALSO: PGIM Real Estate Adds $700M Industrial Portfolio

The fully entitled 4.4 million-square-foot project reportedly has undergone significant predevelopment by CT Realty, which will begin sitework immediately and plans shell completion of the first buildings by the summer of 2021. PGIM Real Estate has invested in the development on behalf of institutional investors in its U.S. core-plus equity fund.

Agua Mansa Commerce Park. Image courtesy of CT Realty

The 206-acre Agua Mansa Commerce Park is in Jurupa Valley, immediately southeast of the intersection of Rubidoux Boulevard and El Rivino Road. The site is occupied by a former cement plant that’s being razed to clear the way for the development, a CT Realty spokesperson told Commercial Property Executive.

The project will initially feature three buildings over 1 million square feet, each in a cross-dock design with 40-foot clear height, plus two buildings of about 200,000 square feet each and 32-foot clearance, designed for regional last-mile distribution users.  

The joint venture purchased the site from Crestmore Development, of Denver, managed by Viridian Partners. CT Realty noted that while the land price has not been disclosed, comparable prices for entitled industrial land in the Inland Empire have exceeded $1 million per acre, putting the value of this land above $200 million.

The CBRE team that represented the seller was led by Darla Longo, Barbara Emmons Perrier and Dan De La Paz. CT Realty represented itself.

Active on both coasts

In a prepared statement, Carter Ewing, managing partner at CT, said that developing a project of this size on a speculative basis is justified by the strength of the logistics market in Southern California, along with the particulars of the project and its location.

He also touted the site’s access to the Southern California ports, which are served by the Union Pacific and BNSF railroads. Agua Mansa Commerce Park is about 2 miles from the UP’s West Colton Yard and roughly 8 miles from BNSF’s intermodal yard in San Bernardino, Calif.

Agua Mansa is CT Realty’s third recent project to be developed with PGIM Real Estate. The partners recently completed a 13-building development program in Southern California and are currently breaking ground on the third phase of their 3 million-square-foot Palmetto Logistics Park in Greater Atlanta.

The Inland Empire industrial real estate market is seeing falling vacancy (3.5 percent) and declining deliveries, along with strong absorption, all of which are naturally producing higher rents, which hit $0.74 for a direct asking lease rate, according to a second-quarter report from Kidder Mathews.

The Jurupa Valley submarket, in the Inland Empire West, had nearly 1.3 million square feet under construction in the second quarter. That was against an inventory of 30.3 million and with a bare-bones 3.1 percent total vacancy, also according to Kidder Mathews.

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The MarketPlace at Calimesa. Image courtesy of Lewis Group of Cos.

Lewis Retail Centers has opened The MarketPlace at Calimesa, a 105,000 square-foot shopping center in Calimesa, Calif. Anchored by a Stater Bros. Market, the Inland Empire retail property also includes Starbucks and Del Taco among its tenants.  

READ ALSO: The Challenges of Retail Property Valuation During COVID-19

Randall Lewis, executive vice president of marketing at the Lewis Group of Cos., the parent company of Lewis Retail Centers, told Commercial Property Executive that the company broke ground on the project in May 2019 and tapped CSI Construction as the general contractor.

The shopping center will also be home to Cold Stone Creamery, Jack in the Box, Modern Nails, Skin Solutions Aesthetics and Supercuts. Lewis also told CPE that these remaining tenants are anticipated to be open by the end of the year. Lewis said in prepared remarks that there’s a demand for close-in grocery and casual food from the area’s growing residential population, despite the current market conditions.

”For the MarketPlace at Calimesa, we studied the site and noticed a strong housing growth in the area,” Lewis told CPE. “With no similar competition for approximately 4 miles and steady housing growth on the rise, we believed that the site and the local community would benefit from a grocery-anchored shopping center.”

Lewis also told CPE that the company approached several grocery operators before selecting Stater Bros. Market as the anchor tenant.

Building in response to residential demand

Lewis added that one of the company’s original strategies involves identifying growing residential markets with little to no retail. Following this strategy, Lewis Retail Centers also began construction on a Safeway at Damonte Ranch Town Center, a shopping center in Reno, Nev., that is expected to open in the spring of 2021. Safeway will occupy a 62,000-square-foot space and will be the third anchor for the retail property alongside Home Depot and RC Willey. Lewis Retail Centers also opened a Millennial-focused retail center in Rialto, Calif., in August 2018.

Elsewhere in California, the company is upgrading some of its other shopping center properties. In Eastvale, Calif., Lewis Retail Centers is also working on modernizing the appearance of the 850,000-square-foot Eastvale Gateway. In Vacaville, Calif., the company completed a renovation of the Regency Park Plaza by installing LED lights in the parking lot, updating the monument sign with LED panels, repainting the exterior, adding new awnings and louvers, and installing building lights on the center’s columns. The company has also added electric car charging stations to several grocery-anchored shopping centers.

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First package arriving at the Amazon fulfillment center in Beaumont, Calif. Image courtesy of Amazon

Amazon has opened its latest fulfillment center in California’s Inland Empire—a 640,000-square-foot facility in Beaumont, Calif., that employs more than 1,000 full-time associates who will pick, pack and ship small items including books, electronics, school supplies and home goods.

READ ALSO: Amazon’s Bellevue Expansion Continues With 2 MSF Lease

Development of the fulfillment center, located in an industrial business park near the intersection of the Interstate 10 and state Route 60 freeways, was announced in November 2018. At that time, Amazon had 13 centers in the Inland Empire in California with Beaumont set to be the 14th. Other Inland Empire locations include Eastvale, Moreno Valley, Redlands, Rialto, Riverside and San Bernardino. Amazon is the largest employer in the Inland Empire, where it launched its first California fulfillment center in San Bernardino in 2012.

Beaumont City Manager Todd Parton said in a prepared statement the cutting-edge facility solidifies Beaumont as a pivotal location within the Inland Empire for international trade and commerce. He said the city was looking forward to the employment opportunities Amazon is bringing with its latest fulfillment center. The e-commerce giant, which notes it offers full-time employees comprehensive benefits including a minimum starting wage of $15 an hour, said it is still hiring for the site. Since 2010, Amazon has created more than 91,000 jobs in California and invested more than $50 billion across the state, including infrastructure and compensation to employees in the state.

Busy summer in Texas

In August, Amazon revealed plans to construct a new 1 million-square-foot fulfillment center in Forney, Texas, about 20 miles east of Dallas. Planned for delivery by 2021, it was the third fulfillment center announced for Texas within a 30-day period during the summer. The company increased its network square footage by about 15 percent in 2019 and expects to grow year-over-year square footage this year by about 50 percent, with space including fulfillment centers, sort centers and delivery stations.

The Forney announcement followed the company’s news in July that it was building two other industrial projects in Texas. Within a single week, Amazon announced it would open its first fulfillment center in El Paso with the development of a 625,000-square-foot facility and launch an 820,000-square-foot fulfillment center outside Austin in Pflugerville. Also in Austin, the company signed a lease to rent about 300,000 square feet in Kyle for a new sorting center.

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Image courtesy of EFAFLEX_Schnelllauftore via Pixabay.com

JLL Capital Markets has secured a $23.7 million financing package for the purchase of Pellisier Logistics Center, a 232,588-square-foot, newly built industrial warehouse and distribution property in Colton, Calif. The brokerage’s Marc Schillinger, Keith Rosso and Eric Boucher assisted the borrower, a privately-owned apparel manufacturer.

Thorofare Capital provided the 2-year, fixed rate mortgage within 6 days of the loan application. Concurrent with the deal closing, the warehouse was 100 percent leased for an initial term of 10 years. Additionally, the triple-net lease has two five-year renewal options.

Hillwood Investment Properties, a Perot Company, developed sold the asset. The seller funded the development with a $15.1 million construction loan from Pinnacle Financial Partners in 2019, according to Yardi Matrix data. The company finalized the project earlier this year.

The single-story building occupies a 13-acre parcel at 1901 W. Center St. The facility features 36- to 42-foot clear heights, an ESFR sprinkler system, two grade level and 24 dock high doors.  The site is close to Interstate 215 and 11 miles southwest of San Bernadino International Airport.

In August, a different JLL team arranged the $7.8 million sale of a 141,000-square-foot industrial building in Tempe, Ariz. The company represented the buyer, Arizona Custom Blends and arranged an $11.8 million acquisition and development loan from a national bank.

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Village Grove Plaza. Image courtesy of Hanley Investment Group

Hanley Investment Group has finalized the $5.2 million disposition of an 11,600-square-foot retail asset in Corona, Calif. President Ed Hanley and Executive Vice Presidents Bill Asher, Kevin Fryman and Jeff Lefko negotiated on behalf of the seller, Cadence Capital. ANA Capital’s Ranhee Im assisted the buyer, a private investor. Bank of Hope provided acquisition financing for the new owner, public records show. 

Located on 1 acre at 1240 and 1282 Border Ave., the property encompasses two buildings completed in 1976. The tenant roster includes a dentist office, dry cleaners and doughnut store. The asset is on two outparcels of Village Grove Plaza, a 56,100-square-foot retail center anchored by Crunch Fitness and Stater Bros. Markets.

The property is in a dense residential area 1 mile from the Riverside Freeway, which has an average daily traffic count of 257,000 vehicles. There are 194,000 people earning an average household income of more than $103,000 within 5 miles of the asset, according to the brokerage firm.

Earlier in July, the company closed the $13.4 million sale of a 50,082-square-foot office property some 30 miles northeast of Village Grove Plaza in San Bernardino, Calif. The Krausz Cos. acquired the asset in a 1031 exchange.

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300 El Sobrante Road. Image courtesy of CBRE

A joint venture between Condor Cold Storage and AEW Capital Management has acquired a 98,949-square-foot cold storage portfolio in Corona, Calif.

A sale price was not disclosed. The buyers secured $8.6 million in acquisition financing for the purchase.

According to Yardi Matrix, Latitude 36 Foods sold the two-building portfolio in a sale-leaseback transaction. The two properties feature 24-foot clear heights and a combination of office, food packaging, cooler distribution, and dry storage units. 

Located at 300 El Sobrante Road, the first property is just off Interstate 15. The 72,000-square-foot facility came online in 2000. The second asset is situated at 1701 N. Delilah St., within 2 miles of the first one. The facilities are within 16 miles of Ontario International Airport. 

CBRE’s Shaun Moothart, Bruce Francis, Robert Ybarra, Dana Summers, Doug Birrell and Jim Korinek represented the buyers in securing the acquisition loan.

In April, the same team arranged a $33.8 million refinancing package for Park One, a 217,433-square-foot office campus in Phoenix. The brokerage worked with Alliance Bank of Arizona, on behalf of Velocis.

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