Inland Empire, San Gabriel attract large distributors.

When Toyota Motor Sales U.S.A. Inc. broke ground on a $75 million project in the Inland Empire city of Ontario, it marked just the latest move by a prominent corporation to locate an important distribution center in the Inland Empire.

Firestone, Bridgestone, Mercedes-Benz and many others have chosen the Inland Empire for distribution centers - one reason that industrial vacancy rates continue to decline there and in the nearby San Gabriel Valley, which has the lowest vacancy rate of any industrial market in Southern California, according to Grubb & Ellis commercial real estate brokerage. Some of the companies moving in are combining both manufacturing and distribution centers, like the 30-acre site at the Koll Mira Loma Commerce Center where Metal Container Corp., the can manufacturing subsidiary of Anheuser-Busch Inc., is constructing a $150 million, 350,000-square-foot factory.

Distributors today want a centralized location that is convenient to their markets - along with modern buildings featuring state-of the art features like the latest in loading docks, higher ceilings than traditional distribution space, and computerized inventory control systems.

Older industrial buildings generally won't do, brokers say, because they have ceiling heights of 18 to 22 feet, compared with the 30 feet and higher spaces that distributors want today. Besides the availability of land and buildings, another factor drawing new companies to these areas is aggressive recruiting by groups like the San Gabriel Valley Cities and Commerce Consortium, a partnership of public agencies and private companies.

The Consortium and its Inland Empire counterpart, the Inland Empire Economic Partnership, emphasize their region's freeway access, labor pool and a business-friendly attitude.

Another recent sign of activity in the region was the purchase by Tension Envelope Corp., a Kansas City, Mo.-based manufacturer and distributor of envelopes, of a 117,00-square-foot industrial building in the Winchester Highlands Business Park in Temecula for $2.8 million to serve as its West Coast headquarters.

Among some other expansions and relocations into the Inland Empire and San Gabriel Valley in the past year have been: - Best Buy Co., an electronics retailer, leased 311,000 square feet for a warehouse in Ontario as part of its plans to enter the Southern California market. The company recently opened its first retail stores in the state as part of a West Coast expansion.

Smith's Food & Drug Centers Inc., a Salt Lake City-based firm, is building a 1.1 million-square-foot distribution center in Riverside. The 80-acre, $60 million project will employ approximately 450 workers.

Earlier this year St. Louis-based Graybar Electric Co., the nation's largest electrical distributor, leased a 90,000-square-foot building in the City of Industry to serve as its Southern California distribution center.

Trends like these are one reason the industrial vacancy rate has continued to decline in the region.

Walter Hahn, an economist at the Orange County office of Kenneth Leventhal & Co. who tracks the Inland Empire real estate markets, said the the appeal to national distributors in the Inland Empire is large tracts of open land where they can lease or build huge distribution facilities.