USPS signs its largest CA lease since 2018

The U.S. Postal Service is expanding in the Inland Empire, The Real Deal has learned.

USPS has leased a 350,000-square-foot building in Highland, according to publicly available data from the agency. The lease was signed in October, but has not yet been reported.

Brookfield Property Partners owns the Class A industrial building, located at 27400 5th Street. The New York-based investment firm bought the property in 2021 from Blue Jay-based Transition Properties.

USPS will lease the Highland property through October 2026.

The same month, USPS leased a 104,000-square-foot property at 321 Vineland Avenue in the City of Industry.

From October through March of this year, USPS has signed new leases on 108 facilities in California totaling about 980,000 square feet. Most of the deals were for new main offices, with the median lease size at 2,145 square feet.

The deal with Brookfield is USPS’ largest deal in California since 2018, when the company leased a 371,450-square-foot property near LAX from the City of Los Angeles in a build-to-suit deal.

USPS will use its new Highland building as a processing and distribution center to handle the peak mailing season of the 2022 fiscal year, according to the agency data.

Package volume during the 2021 peak mailing season — from November through January — increased 37 percent, compared to the prior period, according to a report from the USPS Office of Inspector General. The agency is expecting a higher increase in 2022.

To handle this expected surge in packages, USPS leased 70 mail processing and logistics properties on a temporary basis and 46 other “package support” facilities on two- to five-year lease terms, the report said.