CT Realty, of Newport Beach, Calif., in a joint venture with PGIM Real Estate, has begun the development of Agua Mansa Commerce Park, a multi-building logistics project in Southern California’s Inland Empire industrial market.
The fully entitled 4.4 million-square-foot project reportedly has undergone significant predevelopment by CT Realty, which will begin sitework immediately and plans shell completion of the first buildings by the summer of 2021. PGIM Real Estate has invested in the development on behalf of institutional investors in its U.S. core-plus equity fund.
The 206-acre Agua Mansa Commerce Park is in Jurupa Valley, immediately southeast of the intersection of Rubidoux Boulevard and El Rivino Road. The site is occupied by a former cement plant that’s being razed to clear the way for the development, a CT Realty spokesperson told Commercial Property Executive.
The project will initially feature three buildings over 1 million square feet, each in a cross-dock design with 40-foot clear height, plus two buildings of about 200,000 square feet each and 32-foot clearance, designed for regional last-mile distribution users.
The joint venture purchased the site from Crestmore Development, of Denver, managed by Viridian Partners. CT Realty noted that while the land price has not been disclosed, comparable prices for entitled industrial land in the Inland Empire have exceeded $1 million per acre, putting the value of this land above $200 million.
The CBRE team that represented the seller was led by Darla Longo, Barbara Emmons Perrier and Dan De La Paz. CT Realty represented itself.
Active on both coasts
In a prepared statement, Carter Ewing, managing partner at CT, said that developing a project of this size on a speculative basis is justified by the strength of the logistics market in Southern California, along with the particulars of the project and its location.
He also touted the site’s access to the Southern California ports, which are served by the Union Pacific and BNSF railroads. Agua Mansa Commerce Park is about 2 miles from the UP’s West Colton Yard and roughly 8 miles from BNSF’s intermodal yard in San Bernardino, Calif.
Agua Mansa is CT Realty’s third recent project to be developed with PGIM Real Estate. The partners recently completed a 13-building development program in Southern California and are currently breaking ground on the third phase of their 3 million-square-foot Palmetto Logistics Park in Greater Atlanta.
The Inland Empire industrial real estate market is seeing falling vacancy (3.5 percent) and declining deliveries, along with strong absorption, all of which are naturally producing higher rents, which hit $0.74 for a direct asking lease rate, according to a second-quarter report from Kidder Mathews.
The Jurupa Valley submarket, in the Inland Empire West, had nearly 1.3 million square feet under construction in the second quarter. That was against an inventory of 30.3 million and with a bare-bones 3.1 percent total vacancy, also according to Kidder Mathews.