Industrial Highlights
Inland Empire | Q1 2014
Will flurry of spec
deliveries meet demand?
Developers continue to capitalize on the Inland Empire, a dynamic
market that leads the country with speculative and build-to-suit
construction activity. The IE East submarket is steadily catching up with
the established West in terms of inventory and leasing activity,
highlighted by this quarter’s largest new lease by OHL in Rialto as well
as San Francisco-based Newcastle Partners, Inc.’s purchase of 25.7
acres in Riverside. Plans are underway for construction on a speculative
510,000-square-foot distribution building as part of the second phase of
its Meridian Distribution Center at midyear.
As the overall vacancy rate has steadily declined and net absorption has
increased year-over-year due to robust leasing activity, the market
heavily depends on sustained tenant demand to alleviate the concern of
properly aligned speculative deliveries. The favorable location as well as
state-of-the-art features of recent and planned deliveries provide
incentive for tenants to consider strategic expansion options, particularly
as the economy continues to recover.
Leasing activity
West
• Sears committed to a 120-month renewal of 802,201 square feet at
5691 E Philadelphia Street in Ontario.
• Amcor, a multinational packaging company, inked a 62-month renewal
and expansion totaling 435,000 square feet at 14120 Ramona Avenue
in Chino.
• Kenco Logistics signed a 36-month direct lease for 410,260 square
feet at 6509 Kimball Avenue in Chino.
• General Motors inked a 60-month renewal for 303,120 square feet at
11900 Cabernet Drive in Fontana.
• NRI Distribution, a 3PL warehousing & fulfillment company,
committed to a 115,035-square-foot direct lease at 13169 Slover
Avenue in Fontana.
• Globalinx Pet, a Southern California based manufacturer of products
for dogs, signed a 180-month direct lease for 108,703 square feet at
2400 E Francis Street in Ontario.
Vacancy
Rents
Net absorption
Leasing volume
Sales prices
Sales volumes
Construction
deliveries
Arrows represent change from prior quarter
• Seldat, specializing in small- and medium-sized retail product
businesses, inked a direct lease for 101,328 square feet at 10865
Jersey Boulevard in Rancho Cucamonga.
• Jacobsen Industrial Center, Inc. signed a 65-month direct lease for
92,079 square feet at 10788 Commerce Way in Fontana.
• South Bay International, specializing in products for mattress
manufacturers and retailers, committed to a 63-month direct lease for
69,720 square feet at 13169 Slover Avenue in Fontana.
• Genmert, Inc., specializing in merchandise for the kitchen, signed a
new 63-month lease for 39,749 square feet at 2817 E Cedar Street
in Ontario.
• Pacific Edge Marketing Group, a manufacturers‘ direct wholesale
distribution company, inked a 48-month renewal for 22,586 square feet
at 1885 Vineyard Avenue in Ontario.
• Fanimation, provider of high-quality indoor and outdoor ceiling fans,
committed to a 39-month new lease of 15,128 square feet at 605 S
Milliken Avenue in Ontario.
• Cordova Solutions, Inc. signed a 25-month direct lease for 15,090
square feet at 4051 Santa Ana Avenue in Ontario.
• Oriental Electronics, Inc. committed to a 38-month direct lease for
12,500 square feet at 13860 Benson Avenue in Chino.
• Damao Luggage International inked a 39-month direct lease for 8,748
square feet at 1909 Vineyard Avenue in Ontario.
East
• OHL, one of the largest 3PL companies in the world, inked a
64-month direct lease for 718,025 square feet at 1710 W Baseline
Road in Rialto.
• MasterBrand Cabinets signed a new 70-month direct lease for 328,691
square feet at 3700 S Riverside Avenue in Rialto.
• Standard Textile, a provider of end-to-end solutions for the
institutional textile and apparel markets, committed to a 68-month
new lease for 126,749 square feet at 6980 Sycamore Canyon
Boulevard in Riverside.
Tenants in the market
• Medline is in the market for up to 1.0 million square feet.
• Ashley Furniture is in the market for up to 900,000 square feet.
• UTI Supply Chain is in the market for up to 900,000 square feet.
Sales activity
West
• Part of a two-property portfolio, Bixby Land Company purchased
316,145 square feet at 10404 6th Street in Rancho Cucamonga from
CT Realty Investors for $25.9 million ($82 per square foot). The cap
rate was reported at 5.5 percent and the buildings were fully occupied
at the time of this investment sale.
• Norac Company, Inc. acquired a 100,345-square-foot investment
property at 11246 Jersey Boulevard in Rancho Cucamonga from
Combined Resources International for $9.3 million ($93 per square
foot). The building was fully leased during the time of sale.
• Rexford Industrial bought Ontario Airport Business Park from Dolphin
Partners Inc., a portfolio of five properties located at 4317 E Santa Ana
Street in Ontario, totaling 113,790 square feet for $8.6 million ($75 per
square foot). All buildings were fully leased at the time of this
investment sale.
• Meritage Homes of California, Inc. purchased a 100,000-square-foot
property at 430 E 19th Street in Upland from Red Mountain Retail
Group, Inc. for $7.6 million ($76 per square foot). The building was
fully leased at the time of this investment sale.
• Margaret Lau bought 103,216 square feet at 10655 E 7th Street in
Rancho Cucamonga from Ontario / Acacia Investors for $6.5 million
($63 per square foot). The property was vacant at the time of sale and
the buyer will occupy the space as an owner-user.
• RPM Investments, Inc. acquired a 40,668-square-foot property at 3575
Grapevine Street in Mira Loma from Bergandi for $3.8 million ($94 per
square foot). The building was fully leased at the time of this owneruser sale.
For more information, please contact:
Melineh Soukiasian
Research Analyst
Los Angeles
+1 (213) 239 6266
[email protected]
East
• Liberty Property Trust purchased 522,772 square feet at 22750 Cactus
Avenue in Moreno Valley from USAA Real Estate Company for $33.6
million ($64 per square foot). The property was sold with a high
vacancy as an investment sale.
• John R Widly bought a 78,800-square-foot property at 785 E Harrison
Street in Corona from Mark S Markos for $7.2 million ($92 per square
foot). At the time of sale, the building was fully occupied.
• George & Sandra Villalobos acquired a 190,000-square-foot
warehouse building at 5300 Via Ricardo in Riverside for $6.6 million
($35 per square foot) from Hackman Capital Partners. At the time of
sale, the building was fully occupied.
Construction activity
Currently, 12.2 million square feet of speculative product and 3.4 million
square feet of build-to-suits are under construction
East
• Groundbreakings continue with IDI / Brookfield breaking ground on a
1.0 million-square-foot building in Perris this quarter.
• DCT Industrial Trust also commenced construction on a 927,575square-foot building in Rialto.
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