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CHICAGO-The locally based Alter Group has begun construction of spec warehouse facilities in Fontana, CA and near Indianapolis. The builds aggregate slightly more than one million sf. The combined cost, including land, construction, marketing and lease up, is $65.5 million.

The all-in cost of the 590,000-sf Calabash II in California's Inland Empire region is $47 million, says Patrick E. Gallagher, SVP of Alter. It is immediately adjacent to, and patterned after, the 528,320-sf Calabash I building the firm developed in 2004.

Ontario (CA) International Airport is five minutes west of Fontana, and Gallagher says the new building is targeted primarily to large warehouse users, "typically importers from the Far East." The building site is also 40 miles east of Downtown Los Angeles. He tells GlobeSt.com the rent, which is typically quoted per month is this area, "is 37 cents per sf," which translates to $4.44 per sf a year.Fontana's distribution vacancy rate is 2.7%, according to Gallagher. Alter sold its first two California projects, Calabash I and the 830,000-sf Haven Distribution Center at Haven Avenue and Sixth Street in Rancho Cucamonga, CA to CB Richard Ellis Investors LLC in 2005 for an undisclosed price. "Most likely Calabash II will also be sold," he says. "There is no asking sales price; it gets higher, once it's 100% leased." Both of the new buildings are expected to reach completion by the end of this year.