After several years of rapid growth, the Inland Empire’s industrial market flattened a bit during the fourth quarter.
The region ended 2006 with a 4.4 percent vacancy rate, approaching double of a year ago though asking rents dropped only 3 cents to 40 cents during the past 12 months, according to Grubb & Ellis Co.
Indeed, the Inland Empire remains a hot market as businesses continue to trek east to find affordable alternatives to more expensive space in Los Angeles and Orange counties.
And the next few years will bring plenty of new product to the region, which had nearly 21 million square feet of industrial space under construction at the end of the fourth quarter compared to just 5.3 million in L.A. County.
The easterly submarket of Redlands and San Bernardino closed out the year with more industrial space under construction than any other Inland Empire submarket.
“That’s where developers continue to go to get large pieces of land to build the big box buildings,” said Ron Washle, Grubb & Ellis Co. senior vice president, industrial services.
The Inland Empire’s office market ended 2006 with higher vacancies (7.6 percent compared to 7 percent) but also higher rents ($2.11 compared to $1.97) than it did the year before.
The market has gotten a boost over the past several years from many regional companies opening satellite offices in the area to give employees the benefit of affordable housing as well as shorter commutes.
Lizbeth Scordo
MAIN EVENTS
In one of the largest transactions of the quarter, Lamps Plus Inc. purchased a 784,200-square-foot industrial building in Redlands for $54 million.
Kearny Real Estate Co. acquired three new buildings at the Redlands Industrial Centre for $39.5 million. A joint venture between Borstein Enterprises and Alameda 24th Street LLC sold the properties.
CB Richard Ellis Investors acquired a 457,000-square-foot building and a 750,000- square-foot building at the Agua Mansa Industrial Center for an undisclosed price. The 300-acre development is located at the border of Riverside and San Bernardino counties.
GAF Materials Corp. inked a 123-month lease for 612,000 square feet of warehouse and distribution space at Fontana’s Midway Distribution Center. Landlord George M. Huff Lumber Co. leased the space in a deal worth more than $30.6 million.
Co-Op Financial Services signed an eight-year lease to take a 75,000-square foot Rancho Cucamonga office building in a deal worth $14 million. The building is part of developer Hileman Co.’s HavenPark, a mixed-use project featuring a hotel that is scheduled for completion later this year.
In Ontario, Cemex Corp. entered into a six-year lease to take 24,877 square feet of office space at Empire Towers V, a 125,599-square-foot building under construction that is owned by LBP Empire LLC. Financial terms were not disclosed.
