Black Creek Plans 1.7 MSF of Inland Empire Industrial Product
- Mar 18, 2021
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.
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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.”
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.
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.
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.