Ivanhoé Cambridge Adds To $2.5B Investment, Plans $450M Industrial Project With CapRock In Inland Empire
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Adding to its $2.5B North American industrial portfolio, Canadian real estate investment giant Ivanhoé Cambridge is entering into a JV with CapRock Partners to develop a $450M, 3M SF industrial business park in the Inland Empire submarket of Ontario, California.
Ivanhoé Cambridge acquired the two-parcel property from CapRock for an undisclosed price, and later tabbed the Newport Beach-based company to develop the project.
The Colony Commerce Center will be composed of 11 Class-A industrial buildings ranging from 600K SF to 1M SF. Construction on Phase 1, a 65-acre site on Carpenter and Remington avenues, will begin later this year. Phase 2, an adjacent 85-acre site, will begin construction sometime in the second quarter of 2019.
“We strongly believe that Colony Commerce Center will allow us to capitalize on the growing demand for rental space by offering modern industrial facilities in one of the best U.S. logistics markets,” Ivanhoé Cambridge Executive Vice President of Industrial in North America Mario D. Morroni said in a news release.
The Inland Empire region, which sits just east of Los Angeles County, is considered one of the hottest industrial markets in the nation.
With a less than 4% vacancy rate and strong rent growth, the Inland Empire is seeing a number of new industrial products come to market, according to CBRE’s second-quarter report.
“It is expected that demand will keep vacancy in check, despite CBRE Econometrics Advisors predicting over 20M SF in new completions by year end,” the report states.
For the past couple of years, Ivanhoé Cambridge has been bullish on the North American industrial market.
In May, Blackstone Property Partners and Ivanhoé Cambridge purchased Vancouver-based Pure Industrial Real Estate Trust for $3.8B. Ivanhoé Cambridge owns 38% of the trust.
Last year, Ivanhoé Cambridge acquired TPG Real Estate’s Evergreen Industrial Properties industrial portfolio for an undisclosed price. Evergreen owned and operated 150 light industrial properties totaling 16M SF in 18 major U.S. markets.
Morroni said in the release that the company intends to continue to grow its industrial portfolio in North America in the coming years.
Morroni told Bisnow this is the perfect time for the company to invest in the Inland Empire.
“Users who are being pushed out of the Orange County and Los Angeles markets due to rising lease rates and limited supply now consider the West Ontario/Chino submarket, a location of choice,” Morroni wrote in an email.
He said the Ontario location has strong regional transportation links and its proximity to the Los Angeles and Long Beach ports is "ideal for e-commerce, package delivery, and third-party logistics as they seek to fulfill last mile delivery needs and meet consumer demand.”
CBRE's Darla Longo and Barbara Emmons helped facilitate the transaction between CapRock and Ivanhoé Cambridge, according to the news release.