CBRE IM, Hillwood Land $756M in Financing for Inland Empire Project

Fueled by a $756 million financing package, construction is underway on the first phase of the Speedway Commerce Center, a 6.6 million-square-foot logistics project planned by a CBRE Investment Management fund and Hillwood Investment Properties in California’s Inland Empire.

The first two buildings are slated for completion in early 2025. The property is located at 9300 Cherry Ave. in Fontana, Calif.

Eastdil Secured arranged the financing on behalf of CBRE Investment Management. Dan de la Paz, Eloy Covarrubias and Barbara Perrier of CBRE have been retained to handle leasing efforts.

The partners acquired 364 acres of land from Auto Club Speedway for $559 million for the first phase a year ago. The sale of 69 acres for the project’s second phase is scheduled to close on or before Dec. 31, 2026.

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Planned as a multi-building logistics center, the project will feature highly functional, larger-scale buildings with 40-foot clear heights, cross-dock loading, 185-foot concrete truck courts, employee parking, optimal circulation and more than 100 acres for excess trailer parking.

Key Inland Empire location

Tenants at Speedway Commerce Center will have easy access to interstates 10 and 15, as well as the San Bernadino BNSF freight railway’s Intermodal Yard. The property also has proximity to the ports of Los Angeles and Long Beach, Calif.

The Inland Empire industrial market fundamentals remain strong with an overall vacancy rate of 5 percent as of the fourth quarter of 2023, according to CBRE research. The vacancy rate for Class A industrial buildings with more than 500,000 square feet of space in the Inland Empire West market is currently at 2.96 percent, CBRE stated.

According to CommercialEdge data, the Inland Empire had 19.4 million square feet of industrial space under construction as of December. This represented 3.0 percent of total inventory, outpacing the 2.4 percent national average. Although the slowing investment market has had a significant impact on sales in the area, demand for industrial space in the Inland Empire remained strong, pushing in-place rental rates higher throughout 2023.