HP Commits to 1.4 MSF at Cajon Distribution Center
- Mar 09, 2011
March 8, 2011
By Barbra Murray, Contributing Editor
Hewlett Packard Co. has signed a deal to occupy a premier two-building industrial park in San Bernardino, Calif., in its entirety. And size matters. The agreement involving the 1.4 million square-foot property marks one of the largest industrial leases ever in the greater Los Angeles area.
Cajon Distribution Center occupies 63 acres approximately 50 miles east of Los Angeles in the Inland Empire region. The two structures, developed in 2008 and carrying the addresses of 7010 and 7140 N. Cajon Blvd., sit in a coveted location providing quick access to four vital thoroughfares–the 215, 210, 10 and 15 freeways–and are within an hour of the BNSF and UPSP intermodal rail yards, as well as the ports of Long Beach and Los Angeles.
The institutional-quality asset came under new ownership in August 2010 when Westcore Properties and CT Realty Investors joined forces with PCCP L.L.C. and Behringer Harvard to acquire the then-vacant property, which also offers state-of-the-art cross-dock configuration, a secured truck court and skylights.
Commercial real estate services firm CB Richard Ellis represented both HP and the ownership in the gargantuan seven-year lease transaction. The deal dovetails with industry experts’ forecast for the Inland Empire market in 2011. “Fortune 500 companies will seek out the region in pursuit of mega-box space,” commercial real estate services firm Grubb & Ellis reports in a recent study. “As available inventory decreases, owner-built and build-to-suit developments will occur.” The market closed 2010 with a vacancy rate of 10 percent, a decline of 250 basis points from 2009.
While no recent Inland Empire industrial lease agreements have come close to covering the square footage involved in the HP deal, there have been some sizable transactions in the market over the last few months. In the fourth quarter of last year, Living Spaces Furniture committed to approximately 796,800 square feet of space, Harbor Freight Tools signed on for 779,000 square feet and American Building Supply Inc. inked a deal for 734,200 square feet. HP plans to settle into its new digs at Cajon Distribution Center in June and July.