Inland Empire warehouse deals
Two large-scale warehouse leases valued at a total of almost $300 million have been signed in Southern California as retailers continue to set up distribution centers in enormous buildings, many of them in the Inland Empire.
The most recent deals involve new facilities for appliance manufacturer Whirlpool Corp. in Riverside County and grocer Kroger Co., owner of Ralphs and Food 4 Less, in Paramount.
Kroger said Wednesday that it would rent all 552,000 square feet in a warehouse to be built in Paramount by Irvine-based Birtcher Development & Investments and Cornerstone Real Estate Advisers. The 30-year lease is valued at $207 million.
The $50-million building will be completed in about a year on a 26.4-acre site at 14900 Garfield Ave., according to Shannon Hondl of Birtcher.
“This is an opportunity that the market is unlikely to see again any time soon because of the scarcity of land in the region,” Hondl said. The industrial property vacancy rate in the area is less than 2%.
Another, even larger, building was recently completed by IDS Real Estate Group in the city of Perris along Interstate 215. The Los Angeles-based developer is expected to announce today that Whirlpool has made the building its distribution center for the Southwest.
The 1.7-million-square-foot structure on 80 acres is big enough to contain 31 football fields, making it one of the largest warehouses in the country. Whirlpool now uses it to distribute home appliances made by company-owned brands including Whirlpool, Maytag, KitchenAid, Jenn-Air and Amana.
“In spite of the fact that the Inland Empire is by far the largest industrial market in the U.S., there are still very limited options in land and buildings over 1.5 million square feet,” said Leslie Wendel, senior real estate manager for Whirlpool.
The value of the Whirlpool lease is more than $85 million, according to local real estate experts who asked not to be identified because terms of the transaction were confidential. Whirlpool consolidated operations from three other Inland Empire sites into the new building in Perris.
Last month shoe manufacturer Skechers USA Inc. said it would rent a 1.8-million-square-foot warehouse in Riverside County’s Moreno Valley to distribute shoes across the U.S. and Canada.