Singapore logistics fund drops $325M on Inland Empire spec project

Kearny Real Estate has sold one of its largest spec projects in the Inland Empire for $325 million. 

The Los Angeles-based developer sold the 730,000-square-foot, five-building industrial campus at 1501 Sherborn Street in the Riverside County city of Corona in a ground-lease deal, according to Colliers, which brokered the sale and announced it Monday. The deal came out to around $445 per square foot.

Colliers declined to name the buyer, but reports said GLP Capital Partners, a logistics-focused fund based in Singapore, bought the complex. 

Colliers’ Richard Schwartz has worked on the development for more than seven years. He first met with the owners of the land in 2016, who had pitched creating a ground lease on the property, to allow for industrial development. 

The land is owned by entities linked to Bruce and Andrew Hohn, according to property and California Secretary of State records. 

In 2019, Kearny Real Estate was chosen as a developer to build five speculative buildings on the site, according to Schwartz. Kearny then obtained entitlements from the city and started construction last year, using a $59.1 million construction loan from Wells Fargo, records show.

“It has been a whirlwind,” Schwartz said, adding rising interest rates slowed down buying interest and construction was delayed by rain in Southern California. 

Given the deal involved a ground lease, many institutional buyers backed away from it, Schwartz said. Prologis, its subsidiary Duke Realty and Brookfield already own industrial properties within a few-mile radius of the development, records show. 

“It was a small group,” Schwartz said of the bidding pool. 

It’s not the first Inland Empire acquisition for GLP Capital Partners, which has an office in Santa Monica. In October, the firm bought a 406,000-square-foot distribution warehouse in Fullerton for $156 million, or about $384 per square foot.