1.2M sf spec warehouse totally booked in Inland Empire
Deal will keep two-county region’s industrial vacancy rate around one percent
Third-party logistics company Lecangs LLC has pre-leased a 1.2-million-square-foot project in the Inland Empire, underscoring the region’s status as one of the nation’s top industrial markets.
Lecangs agreed to a long-term lease on the under-construction facility at 728 West Rider Street in the Riverside County municipality of Perris, which developer Duke Realty expects will be completed by year’s end, according to a Tuesday release from the REIT. The company is a subsidiary of Loctek Ergonomic Technology Corp., which designs and builds workstations under its FlexiSpot brand. The Inland Empire lease almost single-handedly doubles Lecangs’ current base of 1.6 million square feet of warehouse space spread across 15 facilities nationally, Duke’s release said.
Lecangs did not respond to an email seeking comment. Duke did not disclose terms of the lease. Colliers broker Ian DeVries, who co-represented Lecangs during lease negotiations with his colleague Chris DeVries and Jennifer Whelan of AZ Realty & Investment Corp, said the company’s term is longer than 10 years. Colliers deferred to Duke for any specific transaction details.
While it’s unclear how Lecangs plans to use the West Rider Street facility, the company has been working to achieve one-day delivery times across the country, according to its website, which lists delivery giants DHL, UPS, and FedEx as customers.
The transaction also means that Duke has pre-leased all but one of its last 12 speculative facilities in Southern California. Demand for such developments “continues at historic highs across the country and breaks records in Southern California, driving up rents and driving down the vacancy rate in the Inland Empire to less than one percent,” Nancy Shultz of Duke’s Southern California office said in the release.
The region’s vacancy rate at the end of last quarter was 1 percent, less than the rate in Los Angeles and Orange County and down from 1.6 percent at the end of the second quarter, according to Cushman & Wakefield data. Average asking rents in the Inland Empire, excluding expenses, were $0.90 a square foot a month last quarter, up 12.5 percent from the previous three months, Cushman & Wakefield said.
Duke’s Collin Phillips as well as Chuck Belden, Phil Lombardo, and a team of Cushman brokers represented Duke in the transaction. Representatives for Cushman did not respond to requests for comment.