Duke Realty Adds 1.4M-SF to SoCal’s Industrial Market

Duke Realty Corp. is continuing to expand its construction pipeline. The developer has announced six new industrial projects totaling 1.4 million square feet in the Inland Empire and Orange County. All of the projects are speculative and located in some of the most in-demand markets in Southern California.

As part of the construction pipeline, Duke will build two industrial buildings totaling 418,319 square feet at 1861 and 1865 Mountain View Avenue in Redlands; a 330,735-square-foot building at 23840 Rider Street in Perris; a 187,520-square foot building at 2872 East La Palma in Anaheim; a 194,5595-square-foot building at 16225 Slover Avenue in Fontana; a 193,077-square foot building at 16171 Slover Avenue in Fontana; a 148,078-square-foot building at 131 Perry Street in Perris; and a 4.7-acre trailer drop lot that can accommodate 139 trailers at 2801 Lynwood in the South Bay.

The six buildings will feature clear heights from 32 feet to 36 feet, generous dock positions, trailer stalls and car parking to accommodate distribution and warehousing demands. Duke will build the properties to LEED certification standards, focusing on water and energy savings and waste management.

While the properties are being built speculatively, Duke is handling leasing efforts internally. Duke’s Collin Phillips and colleague Jake Smith are handling leasing efforts. “We recently announced the preleasing of a 1.2 million square foot speculative development in Inland Empire, and have preleased 11 of our last 12 speculative developments, so we know the demand for space continues,” said Phillips.

The demand is fueling tremendous rent growth as well. Southern California markets lead the country in industrial rent growth. Fueled by record activity at the Port of Los Angeles, demand for industrial space is at an all-time high in Southern California, according to a new report from Yardi Matrix. The Inland Empire saw rent grow by 7.1% over the last 12 months, while LA posted an increase of 6.7% over the same period. Vacancies clocked in at 2% for the Inland Empire in May, and research from JLL released earlier this year shows that the market recorded an impressive 26 million square feet of absorption in 2020. And, in San Diego, industrial rents continued to climb through the fourth quarter, growing 4.7% to $16.80 per square foot, according to research from Marcus & Millichap. Rents have grown consistently each quarter since the start of the pandemic.