The Inland Empire's industrial market remained flat last quarter, thanks in part to the building boom in the region's easterly submarkets.
Industrial rents stayed at 41 cents during the April-June period, while vacancies nosed upward slightly to 4.8 percent, according to Grubb & Ellis Co.
"In the Inland Empire west marketplace, land is very scarce and you're seeing record lease rates being achieved. Compare that to the east where there's just an abundance of choice and tenants can be more selective when choosing a building," said Chuck Belden, senior director, Cushman & Wakefield.
Industrial vacancies varied wildly around the region, topping out at a whopping 25 percent in the eastern submarket of Moreno Valley/Perris, up from 18.9 percent during the previous quarter. Chino's vacancy rate, the lowest in the region, fell by half a point to 0.9 percent last quarter. Twenty-four million square feet of industrial space is currently under construction in the area with eastern markets Redlands/San Bernardino and Moreno Valley/Perris accounting for nearly half of that total.
With an influx of users in both the eastern and western markets of the Inland Empire, developers should not have a problem filling the space.
"We're still seeing a lot of migration ... coming from L.A. County and outside the state," Belden added.
In the region's smaller office market, Class A rents were up a penny to an all-time high of $2.13, but at the same time vacancy rates rose two points to 9.3 percent. As with the industrial, that uptick can be attributed to a slew of new construction. Last quarter ended with 4 million square feet of space under construction.
- New Breed Logistics signed two leases in the Inland Empire last quarter. In a renewal at 5200 E. Airport Drive the company extended its lease of 404,500 square feet of industrial space for seven years from landlord TIAA-CREF. The lease is valued at $11.6 million. New Breed also inked a new lease for 210,930 square feet at 13232 North Valley Blvd. in Fontana for five years in a deal worth $5.3 million. The David F. Bolger Revocable Trust owns the building.
- Lincoln Property Co. Commercial purchased a newly constructed 150,000-square-foot industrial building at 4455 E. Philadelphia St. in Ontario for $12.3 million. Majestic Realty Co. bought the land in 2005.
- Sunglasses maker Oakley pre-leased 289,940 square feet of distribution space at Crossroads Business Park in Ontario from developer ProLogis. Terms of the deal were not disclosed. Crossroads includes eight buildings totaling 2.4 million square feet and has enough available land to construct another three distribution facilities totaling 1.74 million square feet.
- Consumer brands developer and marketer Lifetime Brands inked a 120-month lease for a 753,000-square-foot industrial building in Fontana. Black Rock Realty Co. is the landlord.
- Ruth Group, a newly formed development company, acquired one office building and three land sites in a transaction estimated at more than $100 million. The portfolio includes an existing building at 3536 Concours St. in Ontario, a development site at 888 Haven Ave. and two additional development sites at Retreat Business Center in Corona.
- Industrial real estate firm Rexford Industrial LLC purchased a 62,677-square-foot multi-tenant business park at 9375 Archibald Ave. in Rancho Cucamonga in a deal valued at $7.3 million. 9375 Associates LP and Diversified Partners Inc. sold the property, which includes 33,000 square feet of industrial space and three two-story office buildings.
Industrial Market at a Glance
369 million square feet
Under Construction: 24.2 million square feet
Asking Rents: 41 cents
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