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Duke Realty Launches 1.4M SF Of Spec Industrial Space In SoCal

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Duke Realty Corp.’s Southern California office is working on over 1.4M SF of speculatively built projects throughout the region, with most of the square footage concentrated in the Inland Empire, the company announced Monday. 

While 1.4M SF may seem like a lot of space to build on a speculative basis, Duke announced in December that it had bagged a tenant for the entirety of its nearly complete 1.2M SF distribution center in the Inland Empire city of Perris. Duke has pre-leased 11 of its last 12 developments, the REIT said.

The square footage is spread across six projects, including two industrial buildings totaling about 418K SF at 1861 and 1865 Mountain View Ave. in Redlands, a roughly 188K SF building at 2872 East La Palma in Anaheim and a 4.7-acre trailer drop lot with a 139-trailer capacity at 2801 Lynwood Road in Lynwood. About 1.3M SF of the 1.4M SF underway is being built in the Inland Empire’s east and west regions. 

“We continue to see record-breaking rent growth and record-low vacancy rates in Southern California creating a dire need for space for companies trying to meet their supply chain demands and consumers’ appetite for prompt delivery,” Duke Realty Regional President of the West Region Nancy Shultz said in a statement. 

Industrial vacancy in Q4 2021 was 0.7% in the Inland Empire, according to a report from Cushman & Wakefield. Tenants absorbed a net of 27.7M SF in 2021, the largest occupancy gain since 2018, when the market saw net absorption of 29.6M SF, the report found. 

“Investing in land for trailer storage and constructing state-of-the-art facilities using sustainable development practices can help ease the supply chain strain while positively contributing to the economy of Southern California with added jobs, improved infrastructure and increased revenue to local communities,” Shultz said. 

All buildings will have 32-to-36-foot clear heights as well as trailer stalls and car parking.

They will also be built to LEED certification standards, including the standards for water and energy efficiency as well as sustainable construction practices, according to Duke. The environmental impact of industrial warehouse and distribution facilities, especially in the Inland Empire, has become a frequent point of concern for residents living near new industrial projects. It is also something that state regulators have zeroed in on, with new rules aimed at zapping emissions at multiple points in the life cycles of these projects.