Shopoff Realty Investments just announced that it has obtained $105 million in financing for the development of I-10 Logistics Center, an approximately 1.8 million-square-foot speculative industrial project in Cherry Valley, Calif., in the Inland Empire. Bank OZK provided the loan for Shopoff Realty Investments, which is developing the state-of-the-art logistics center in a joint venture partnership with Artemis Real Estate Partners.
Shopoff Realty and Artemis relied on Mark Strauss and Rob Quarton of Walker & Dunlop to assist in securing the funding for I-10 Logistics.
“There was significant interest in the product type. We had several viable proposals for this financing,” William Shopoff, president & CEO, Shopoff Realty Investments, told Commercial Property Executive.
Bank OZK ultimately came through with a senior-secured construction loan, citing the project’s strong market fundamentals and top-tier sponsorship as reasons for its attraction to the opportunity.
I-10 Logistics, which will occupy 155 acres near the intersection of I-10 freeway and Cherry Valley Boulevard, has been a long time coming. The Riverside County Board of Supervisors had approved the project in 2017; however, claims against the development slowed the process until July 2020, when the Riverside County Superior Court dismissed all challenges and finalized previous project approvals.
Conceived to help answer the constant call for big-box industrial space in the Inland Empire, the Ware Malcomb-designed I-10 Logistics will consist of an approximately 1 million-square-foot facility and a roughly 800,000-square-foot facility, both of which will feature a 40-foot clear height to allow for maximum storage capabilities and 8-inch slab with no slope to better accommodate tenants utilizing robotics operations. Additionally, the two-building project is being built to qualify for LEED Silver certification.
Shopoff Realty and Artemis have tapped CBRE to handle leasing for the project. KPRS, general contractor, will commence site development this month.
The Inland Empire is the fifth largest big-box industrial market in North America, with 42.5 million square feet transacted in 2020—up 21 percent year-over-year—the most for any North American market, according to a CBRE report. Net absorption, which totaled 25.1 million square feet in 2020, constituted a 40 percent increase over the previous year.
With fewer project completions on the horizon as a result of limited developable land sites, the market is projected to tighten further in 2021, and the big-box direct vacancy rate is projected to drop from 3.1 percent at year-end 2020 to below 3 percent. And more of the same is forecasted for big-box product for the foreseeable future.
“We believe the demand for this product is long-term in nature,” Shopoff added. “COVID-19 likely accelerated some demand, but we believe the market should remain in balance for many years to come, especially in light of the challenges of getting new product approved.”
I-10 Logistics is on track to reach completion in the summer of 2022.