Colliers Team Negotiates Trio of Large Industrial Leases Totaling $56 Million and 1.4 Million Square Feet in Continuing Sign that Inland Empire is Strongest Logistics/Industrial Powerhouse in U.S.
Team Led by Colliers’ Mark Zorn Negotiates Long-Term Pacts with Burlington, Radial Inc. and Drug Maker Amphaster as Southern California’s Inland Empire Remains Nation’s Strongest Logistics Market
ONTARIO, CA – In another sign that the economic powerhouse known as the Inland Empire in Southern California continues to be the nation’s most-preferred and largest destination for companies seeking logistics and warehousing facilities, a team of veteran brokers from Colliers International has, in quick succession, negotiated and closed three major lease transactions totaling 1.4 million square feet with an aggregate value of $56 million.
“Never in my career have I such momentum in the market,” said Colliers Senior Executive Vice President Mark Zorn, the team’s lead broker. “I like to call it the Retail-Industrial Transition since many of what we would normally call ‘industrial’ transactions these days are with some of the best-known retail firms in the U.S., who are staging products here that have been, or will be, ordered online and delivered to homes and businesses throughout the west.”
In the largest of the three transactions, Burlington Distribution of California will occupy a Prologis Inc.-developed 800,444-square-foot building located at 27852 Pioneer Ave. in Redlands. Valued at approximately $32.5 million, the term of the lease will run for more than seven years with options to renew. Zorn, who’s based in the brokerage firm’s Inland Empire office in Ontario, Calif., represented Burlington in the transaction.
Radial Inc., a multinational e-commerce company, leased a 475,555-square-foot logistics building in the Prologis Park Rialto I-210 Distribution Center. Zorn and Cory Whitman, who represented Prologis Inc., negotiated the nearly six-year lease that was valued at $16,361,693. Completed this year, the building is located at 2602 N. Locust Ave. in Rialto, accessible to the Foothill (I-210), Corona (I-15) and San Bernardino (I-10) freeways. Corporate neighbors include Target, Under Armour and LG.
Although off to a cautious start especially when it came to speculative building after being shell-shocked by The Great Recession that officially ended in 2009, developers in the past 12 months have added a total of 25.8 million square feet of new supply to the Inland Empire industrial market, yet it still isn’t enough to meet demand, according to Colliers’ latest research report on the region.
“High demand for newly constructed buildings offering state-of-the-art features required by many logistics firms – you simply cannot take an old warehouse and renovate it if it’s going to be used as a high-volume logistics facility -- it has to be designed with the new logistics-oriented accommodating features which are reflected in the rising rental rates we’re seeing,” said Zorn. “These new buildings allow tenants to be more efficient by lowering operating costs and increasing the velocity at which goods can be sorted and shipped, and higher rents are a trade-off tenants are willing to pay.”
In the third transaction, Amphaster Pharmaceuticals, a specialty pharmaceutical company, leased a 92,259-square-foot industrial warehouse building located at 9281 Pittsburgh Ave. in Rancho Cucamonga. The more than 10-year lease is valued at $7,206,694. Zorn and Whitman represented the tenant in the transaction. The property is owned by a full-service real estate investment and management company.
Built in 1985, the renovated building is directly accessible to the San Bernardino (I-210), Corona (I-15) and Foothill (I-210) freeways, as well as the Rancho Cucamonga and East Ontario Metrolink commuter rail lines and is within close proximity to Ontario International Airport.
“Tightening vacancy rates that have hovered between 2% and 4% for the past 24 months are continuing to put pressure on asking rents,” added Zorn. “While we saw a noticeable bump in asking rates during the first quarter of this year, landlords remain bullish on future rate increases.”
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