Inland Empire Warehouses Fully Leased Before Delivery

A joint venture of Trammell Crow and Clarion announced this week that two warehouses encompassing 1.1M SF under construction in the JV’s sprawling Knox Logistics Center have each been fully pre-leased to single tenants. 

Apparel retailer Burlington Stores has signed a 410K SF lease to occupy all of Knox IV, while an identified logistics services provider has inked a deal to lease all of Knox III, a 693K SF facility. Colliers represented both tenants in the lease transactions, while Lee & Associates represented the joint venture.

Knox IV is scheduled to open at the end of this month. Knox III will be completed in September, according to the announcement.

There currently is 2.7M SF of Class A logistics space under construction at the 249-acre Knox Logistics Center in Perris, CA, a 4.7M SF industrial complex that has been under development for nearly a decade.

A 1.1M SF logistics facility designated Knox VII also is nearing completion on a 72.5-acre site at Knox Logistics Center; Knox VI, a 418K SF warehouse on 20.3 acres, is scheduled to be delivered next month,

Two buildings, designated Knox I and II, were delivered in 2013 and 2018 at the site, which is located on the I-215 South Corridor at an intersection with the Cajalco Expressway across from the March Reserve Airbase in Riverside County.

Knox III, located on 34.5 acres on Old Oleander Avenue, features 11K SF of office space, 40-foot clear heights, and 247 trailer parking stalls. The cross-dock loading facility includes 106 dock-high loading doors, two ground-level doors and a 185-foot truck court.

Knox IV, next door on Old Oleander on a 19.5-acre parcel, includes 3.9K SF of office space, 37-foot clear heights and 80 trailer parking stalls. The front-loading facility has 51 dock-high loading doors, two ground-level doors and a 185-foot truck court.

The Mead Valley region in Riverside County is becoming a leading logistics hub for the apparel industry. Earlier this month, USAA Real Estate and McDonald Property Group broke ground in Beaumont—about 30 miles northeast of Perris—on a 1.8M SF manufacturing and distribution facility for NY-based United Legwear & Apparel.

The Inland Empire industrial market remains the tightest in the nation with an 0.4% vacancy rate that essentially means it’s filled to capacity, a situation that has been exacerbated for the past year by the backlog at the Ports of Los Angeles and Long Beach, according to JLL’s Q2 2022 market report.

An estimated three-quarters of the record 39M SF of industrial space under construction in the Inland Empire—9.2M SF was added to the pipeline during Q2—already has been pre-leased, with pre-leased space the primary driver of next absorption in the second quarter as existing availabilities have been extremely limited.

The industrial warehouse sprawl in the two-county region that stretches from the LA city limits to the Arizona border is now exceeding an estimated 1B SF, with new logistics facilities pushing north and east and facing a growing backlash from several towns that are moving to enact moratoriums or bans on new warehouse construction.