REDLANDS, CA—Hillwood Investment Properties has hired Lee & Associates Ontario office as the exclusive leasing agent for its 1-10 Redland Logistics Center development. The 1.1-million-square-foot industrial development is a two building property, and the leasing team is looking for a single tenant for each building. The development will be complete in the fourth quarter of 2015, and the leasing team is confident they will have leases signed before then.

The property is located in a prime industrial market and is fixed with high-end and atypical upgrades that will help attract healthy interest from tenants. “Our anticipation is that it will be a two-tenant project,” Jeff Smith of Lee & Associates Ontario office, tells GlobeSt.com. “The buildings lend themselves to divisibility, and we have street access from two different streets that serve the two buildings. Based on market strength and what seems to be a pretty discernable level of demand in this size range, we fell pretty strongly about the chances of us putting a single tenant in each building.” Smith is handling leasing efforts for the property along with his colleagues Ryan Lai and Austin Hill.

The project is only in the site padding stage, so it is still early for tenants to take an interest. “Our expectation is that the property will start gaining more momentum when we are within three-to-four months of completion,” says Smith, adding, “We feel very good about the likelihood of having realized preleasing.” In addition to the great location on the corner of Lugonia Avenue and Bryn Mawr in Redlands with easy access to the 10 freeway, the property also has a high-end upgrades that will help to lure in tenants. “This owner is taking a more proactive approach. It is becoming typical for buildings over 400,000 square feet to have a 36-foot minimum clear height, but this owner is putting in a TPO roof system that comes with a 20-year warranty and we are putting in 4,000-amps of power. We are speculatively adding a lot of other longevity-related improvements that will help with tenants as they approach further lease terms and that will help with ongoing maintenance issues,” says Smith. “I think the upgrades will help even further with attracting tenants. Tenants are used to dealing with second-generation maintenance, so when you have a building that was designed to offset some of those maintenance issues in the five- to seven-year lease terms, we are hoping that tenants will appreciate that.”

The hope is that these upgrades will translate to increased rental rates. Smith could not yet comment on the exact rental rates they are looking at for the property, but said they aren't far off from the $0.41 or $0.42 per square foot rates that class-A industrial properties in the nearby Inland Empire West garner. “We are in an ascending market, so it is almost impossible to peg where we'll lease. But, this size range has seen a good amount of activity, and absorption is somewhere on track with where it was last year. Redlands isn't in the Inland Empire West, but it is characterized as the next best spot. We will be leasing at the end of 2015, or beginning of 2016, so if you take that market momentum, we are very bullish.”

Hillwood also broke ground on the Gateway South Building 3 a 1.1-million-square-foot industrial building in San Bernardino in April of this year. The property is an extension of the 14-million-square-foot AllianceCalifornia industrial park. That development is also scheduled for delivery by the end of the year.