An affiliate of Covington Group Inc., along with an institutional capital partner, has acquired seven Class A warehouse/distribution buildings totaling nearly 3.4 million square feet at Southern California Logistics Centre, in Victorville, Calif., in the Inland Empire for $270 million.
The transaction, according to Covington, represents the single largest acquisition to date of industrial properties in the Inland Empire North submarket.
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Completed between 2008 and 2017, the buildings feature clear heights up to 32 feet, concrete tilt-up construction, large truck courts and ample trailer parking. The portfolio’s tenant roster includes such national tenants as Newell Brands, M&M Mars, Boeing and Plastipak Packaging.
The seller was a partnership of Stirling, the properties’ developer and operator, and Prologis, the portfolio’s other owner, via a recent recapitalization.
Southern California Logistics Centre is on the site of the former George Air Force Base in Victorville; it’s the product of a decades-long effort by the City of Victorville to redevelop the base as a multimodal transportation hub.
In a prepared statement, Ken Sheer, CEO & founding partner of Covington, said this portfolio and the submarket are “uniquely positioned to address the overflow of demand seen from tenants coming from the Los Angeles basin in search of more affordable space that still meets their specific requirements.”
Tighter than tight
As the Ports of Los Angeles and Long Beach together process nearly 30 percent more cargo than a year ago, yet still can’t keep up with the record volume of containers waiting offshore, demand for warehouse space in the Inland Empire is surging. In the third quarter, overall vacancy fell to a razor-thin 1.0 percent, with rents climbing accordingly, Cushman & Wakefield reported recently.
In April, a Covington Group affiliate sold 60 acres at Covington’s 200-acre Hesperia Commerce Center, in Hesperia, Calif., (also in the Inland Empire) to Exeter Property Group for $20.5 million. The buyer plans to develop a 1 million-square-foot build-to-suit facility for home and office furniture distributor Modway Inc.