RANCHO CUCAMONGA, CA—An off-market industrial property here has changed hands, GlobeSt.com has exclusively learned. According to Colliers International, which negotiated the $14.7-million sale, the deal “established a new and higher price level buyers are willing to pay per square foot to acquire industrial property in the West Inland Empire market.”
Located at 9449 Eighth St., the 161,555-square-foot facility was purchased by a furniture distribution company that cited the building's location, multiple loading docks, warehousing capacity and two-story office component all as factors in its decision to pay $91 per square foot for the facility.
"Nobody who is familiar with this market will be surprised that we have crossed the $90-per-square-foot price threshold for quality industrial buildings since demand continues to outstrip the supply of buildings in almost every submarket of the Inland Empire and beyond," Colliers' executive managing director, John Hollingsworth, who oversees industrial properties for the brokerage firm in the Greater Los Angeles Region, tells GlobeSt.com. "This is a perfect example of what is taking place throughout Southern California. Developers who were stalled by the recession are picking up the pace of new construction, but the pipeline of new buildings is slower than market demand and that has created opportunities to raise lease rates."
In a very tight West Inland Empire industrial market with low vacancy rates, “the price paid by this user set another high water mark,” adds SVP Mark Zorn, who represented the seller, a private investment trust. “The fact that this new owner-user came from the Mid-Counties area is another significant part of this transaction since it shows how difficult it is to find suitable properties in that closer-in market.”
According to Colliers' latest research reports, the vacancy rate in the West Inland Empire market where this building is located is 3.3% and declining as the close of the second quarter approaches. At the same time, Colliers reported, developers are racing to slake the growing demand exemplified by this transaction. Particularly acute is the lack of suitable distribution facilities in the closer-in markets that make up what Zorn called the “Mid-Counties” market, or Santa Fe Springs, Commerce and Vernon.
“It's important to note that this company is relocating from the Mid-Counties area in order to meet its need for expansion,” Zorn says. “There is simply not enough product to meet the current demand, especially in the closer-in markets, so companies are looking further out to meet their growth needs.”
Additionally, Zorn says, there is a decided lack of newer industrial buildings like this one that combine state-of-the-art distribution facilities, including 34 dock-high loading doors, with more than 20,000 square feet of office space. It also features dual-access truck egress and parking for 88 semi-trailers in an electronically monitored and fenced enclosure for round-the-clock security, parking for 56 automobiles, and multiple skylights. In addition to its nearly three dozen loading docks, it also features two ground level loading doors.
Built in 2006 on 8.25 acres, the other obvious feature that attracted the furniture distribution company was the building's direct access to the San Bernardino (I-10), Escondido (I-15), Foothill (I-210) and Pomona (SR 60) freeways, as well as its accessibility to the ports of Los Angeles and Long Beach, Zorn noted.
“It's also significant to note that this structure was built with all of the most sophisticated security functions that are important to companies that have a constant stream of goods coming in and going out,” Zorn says. “As a result, the building features card-key security access, flat-screen security monitors linked to high-resolution cameras, electronically operated wrought-iron gates and other security features.”
While Zorn, who is based in Colliers' Ontario office, represented the private investment trust seller, Ashwill Associates represented the buyer.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
