Brookfield Buys Inland Empire Logistics Center for $330M

Brookfield Asset Management has acquired the newly completed 1-10 Logistics Center, a two-building, 155-acre industrial campus that is fully leased by online apparel retailer Shein, in a $329M in a deal with the joint venture that developed the campus.

Brookfield’s deal with Shopoff Realty Investment and Artemis Real Estate Partners translates into $183 per SF, according to Riverside County property records.

A CBRE team brokered the deal on behalf of the buyer. The acquisition increases Brookfield’s Inland Empire industrial portfolio to 16 properties.

Shein, owned by a Nanjing tech firm and based in City of Industry, announced in September that it would lease the Cherry Valley campus as its SoCal distribution center as part of a plan to two open three logistics hub in the US this year.

Shopoff and Artemis secured a $105M construction loan for the project from Bank OZK in April 2021 and delivered the I-10 Logistics Center in December. The Cherry Valley campus features a 1M SF warehouse and an 811K SF industrial building.

Shein was one of three apparel players to put distribution centers in Riverside County last year. In July, a joint venture of Trammell Crow and Clarion announced 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.

Also, in July, USAA Real Estate and McDonald Property Group broke ground in Beaumont—about 30 miles northeast of Perris and just south of Cherry Valley—on a 1.8M SF manufacturing and distribution facility for NY-based United Legwear & Apparel.

The economic slowdown has yet to dent the growth of the industrial market in Southern California’s Inland Empire, which recorded overall net absorption of 5.3M in Q4 despite 7.8M SF of deliveries.

While there were indications—particularly in the West submarket—that occupiers downsizing footprints are impacting on warehouses in the 100K SF to 300K SF range, the overall market is being driven by the arrival of pre-leased mega-warehouses, according to Newmark’s Q4 industrial market report.

Even with deliveries outpacing the growth of absorption in Inland Empire in the fourth quarter, the overall vacancy rate in the market—which early last year was as low as 0.4%—hovered at about 1.3%. Inland Empire is a region stretching from the LA city limits to the Arizona border, encompassing Riverside and San Bernardino counties, with an industrial inventory now totaling nearly 1B SF.