Crow Holdings sold a 344K SF distribution facility leased to Amazon in Bloomington for $102M, but it might have sold for even more if it had been vacant, thanks to the runaway rental rate growth for industrial space.
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Although both the functionality of the warehouse — it's a robot-enabled facility — and its high-credit secured tenant likely both contributed to the high value of the property, JLL Senior Managing Director Mark Detmer said rental rates have escalated so much in the Inland Empire in the last year, that the property could have rented for much more if it was securing a tenant now.
“This lease was structured and signed a couple years ago, at a lease rate that was probably half of today's market rate for a lease,” said Detmer, who led the JLL Capital Markets Investment Sales and Advisory team that represented Crow Holdings.
According to JLL, first-quarter rents this year in the Inland Empire for Class-A facilities have grown 91.3% from their second-quarter 2021 levels.
“We don’t normally see [that much] rent growth in a year,” Detmer said.
Detmer says that what’s allowing rental rates to shoot up that much is a combination of a lack of new supply and the high demand for space from occupiers. In the first three months of the year, JLL calculated vacancy in the Inland Empire at 0.4%.
The building is a “robotics distribution facility,” a Class-A property designed to accommodate robots that aid the movement of goods within the warehouse, according to a release from JLL, which represented the seller in the transaction.
The sale price translates to roughly $296 per SF. In the first three months of this year, industrial properties in the same area were trading hands for an average of $257 per SF, according to NAI Capital.
The facility at 18025 Slover Ave. was built in 2021 and has all the expected features of a Class-A last-mile facility, including 36-foot clear height, 49 dock-high doors, 185-foot-deep truck court and plenty of parking.
Even with the cloud of a recession hanging over so much of commercial real estate, “the fundamentals of industrial real estate in Southern California still favor the landlord,” Detmer said.
The buyer of the warehouse was Property Reserve, a Salt Lake City-based company that manages assets of the Church of Jesus Christ of Latter-Day Saints, The Real Deal reported.
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