SAN BERNARDINO, CA—Hillwood Investment Properties has broken ground on the Gateway South Building 3, a 1.1-million-square-foot industrial building in San Bernardino. The property is an extension of the 14-million-square-foot AllianceCalifornia industrial park. The development is scheduled for delivery by the end of the year.

“We feel very good about getting a building of this size up. We have done several buildings of this size over the years, and have leased them,” John Magness, SVP at Hillwood Investment Properties, tells GlobeSt.com. “Usually about mid-way through construction we will find a tenant. This building has all of the amenities that a tenant would want, like extra truck parking, extra car parking, truck circulation around the building and a 36-foot clear, which is the trend in the larger industrial building. We just started grading last week, so we are about nine months away from end of the year delivery of the building, hopefully with a tenant, but if not, we will work on the lease-up even after construction.”

Hillwood secured a construction loan through PCCP for the development process. HFF associate directors Cullen Aderhold and Brian Torp, senior managing director Trey Morsbach and real estate analyst Carson Dennis secured the undisclosed funds on behalf of Hillwood. For confidentiality, the team declined to comment on the transaction.

Hillwood has already received healthy interest from prospective tenants for the building, even before the start of construction, and Magness believes that they will have a tenant by delivery at the end of this year. “Tenants like this project because of its proximity to Interstate 10, which is the east-west corridor, and proximity to the Interstate 215, which runs north-south,” says Magness. “But the biggest amenity is the BNSF Intermodal, which is two miles away, so it is the closest industrial park to the intermodal facility.” The larger 14-million-square-foot industrial park, which debuted its first buildings in 2006, has only 280,000 square feet of available space. Its current tenants include Amazon, which occupies 1.5 million square feet, Khols.com, which occupies 1 million square feet, and Mattel Toys, which occupies 1.1 million square feet. Ian DeVries and Chris DeVries of Colliers International are the exclusive agents for Hillwood.

Hillwood still has 60 acres left to develop at the park, but it is also busy purchasing adjacent land to continue expanding—as is the case with Gateway South Building 3. Magness thanks the city for their ability to complete these massive industrial developments. “It is hard to get buildings built in California, but this is a very pro-business city,” he says. “The project is part of the success story of San Bernardino, and that is because, despite their bankruptcy, the city has continued to process buildings and get things done.”