Rare Inland Empire Distribution Center Up for Lease
- May 14, 2020
Two months after acquiring 5600 E. Airport Road, a 1.6 million-square-foot industrial property in Ontario, Calif., CenterPoint Properties has assigned CBRE to market the massive facility in the hot Inland Empire region for lease.
Located on 94.4 paved acres, the property also has 13,771 square feet of office space and abundant parking with 954 trailer spaces and 580 car stalls, which is five times the market average. The sheer size of the facility and the acreage is rare and CBRE notes it has divisibility potential. When CenterPoint purchased the property, it implemented a short-term leaseback with the unidentified building tenant as part of the acquisition deal. While CenterPoint didn’t release the name of the tenant, the property had long been home to a Kmart distribution center.
Developed in 1980 at the intersection of two major freeways, the property is about 60 miles from the Ports of Los Angeles and Long Beach and 3 miles from Ontario International Airport. The off-market purchase was CenterPoint’s first acquisition in the Inland Empire industrial market since 2012. Elsewhere in California, CenterPoint recently picked up a 132,741-square-foot industrial facility in Hayward, Calif., from CalCargo, which had owned the Bay Area property for seven years. Constructed in 1973 on a 5.5-acre site, the property is located near several major highways including Interstate 880 and Freeway 92 and about 20 miles from San Francisco International Airport. The facility was vacant at the time of the sale and CenterPoint was planning an extensive renovation program.
Strong Inland Empire market
The Inland Empire is considered one of the country’s most robust industrial markets. Over the past decade, the region has seen explosive growth with record low vacancy and rising lease rates. The region has a variety of industrial and logistics sites that are home to e-commerce, manufacturing and third-party logistics companies.
Bret Quinlan, executive vice president, industrial leasing, at CBRE, said in a prepared statement that despite the current business climate due to the COVID-19 shutdowns around the U.S., the Inland Empire market is still expected to be one of the most dynamic industrial markets in the U.S.
Kidder Mathews reported the first quarter 2020 vacancy rate was 4.0 percent, the same as for the first quarter of 2019. Net absorption in the first quarter 2020 was 6.1 million square feet, up from 4.5 million square feet in the fourth quarter of 2019 and about 6 million square feet in the first quarter of 2019.
“Overall, expect the Inland Empire industrial market to remain relatively stable among a more limited group of competing tenants,” the Kidder Mathews 1st Quarter 2020 Market Trends report noted.
New leasing deal
In other leasing news, in February, NAI Hiffman signed a new tenant for an entire 63,318 square-foot industrial property in Bloomingdale, Ill., also owned by CenterPoint. The lease is set to expire in April 2025. The property at 4150 Chandler Drive is located on 3.6 acres and was completed in 1992. It is about 22 miles from O’Hare International Airport and 7 miles west of interstates 290 and 355.