Pacific Newport Rakes in $85.3M in Southern California’s Largest Industrial Sale of 2010

Harbinger of big change or no, Southern California has just seen its largest industrial property transaction of the year to date with Pacific Newport Properties Inc.'s disposition of Mira Loma Distribution Center.

Harbinger of big change or no, Southern California has just seen its largest industrial property transaction of the year to date with Pacific Newport Properties Inc.’s disposition of Mira Loma Distribution Center in Mira Loma, in a transaction valued at approximately $85.3 million. Pacific Newport sold the Class A, 1.6 million-square-foot warehouse and distribution complex to an unidentified institutional buyer.

Mira Loma Distribution Center is part of the Inland Empire, located about 50 miles east of Los Angeles and within one of the nation’s strongest industrial markets. The disposition of the center comes about a decade after Pacific Newport commenced construction of the complex, which constituted the last phase of the commercial real estate firm’s original 131-acre development endeavor. Mira Loma Distribution Center occupies 83 acres of the development and encompasses three warehouse/distribution facilities carrying the addresses of 12455 Harvest Drive, 12510 Micro Drive and 4650 Hamner Ave.

The price tag attached to the center deal is twice as large as the $42 million Federated Department Stores transaction in Los Angeles, which previously held the distinction of being Southern California’s biggest industrial asset sale for the year.

“This sale shows the demand by institutional investors for quality, well-positioned commercial real estate in the Southern California area,” Kent Hindes, director with Cushman & Wakefield and Pacific Newport’s representative in the transaction, said in a prepared statement. “This project is ideally located in one of the nation’s largest warehouse and distribution hubs, and has healthy occupancy, with a strong roster of credit tenants.”

Indeed, there has been a renewal of investor appetite, particularly for Class A properties, in the Inland Empire this year, spurred by low prices. A bevy of big properties have changed hands, although, at costs more moderate than that attached to the Mira Loma deal. Earlier this month, A&B Properties Inc. sold the 900,000-square-foot Ontario Distribution Center in Ontario for approximately $42 million, 10 years after acquiring it for $27 million. In August, Westcore Properties joined forces with CT Realty Investors and two other partners to acquire the Cajon Distribution Center, a premier 1.4 million-square-foot industrial facility in San Bernardino. Financial terms of the trade were not released; however, those in the know did not attribute “biggest deal of the year” status to the transaction.

In terms of dollars, Pacific Newport’s Mira Loma sale may top Southern California’s list of industrial transactions of the year, but the year is not over and opportunities abound. As real estate service firm Grubb & Ellis Inc. noted in its third quarter report, “Institutional investors will continue to purchase Class A distribution centers to build their market share.”