DEMAND FOR INLAND EMPIRE INDUSTRIAL SPACE PICKS UP
IN SECOND QUARTER, MID-YEAR REPORT REVEALS
ONTARIO, Calif., July 29 /PRNewswire/ -- Demand for Inland Empire industrial space, particularly from users outside the area, picked up in the second quarter of 1992, with sales and leasing up from the previous quarter, according to a report released today by Grubb & Ellis Commercial Real Estate Services.
A total of 2.4 million square feet of speculative industrial space was sold or leased in the Riverside/San Bernardino County area during the second quarter of 1992. That was up from the 2.1 million square feet of sales and leasing activity posted during the previous quarter, but down from the 3.7 million square feet recorded during the same period a year ago.
At mid-year, 4.5 million square feet of industrial space had been sold or leased in the Inland Empire, vs. 6.0 million square feet during the first half of 1991.
"What's significant about the industrial activity here in the Inland Empire is that most of it is net activity, which means growth in the market," said Mark Piscitelli, senior vice president and district manager of Grubb & Ellis' Inland Empire District. "Also key is that much of our activity is coming from users relocating to the Inland Empire. In other Southern California industrial markets, the majority of activity is the result of internal churning."
According to the study, 73 percent of the total sales and leasing activity for the Inland Empire in the first six months of 1992 was net activity. Of the 39 transactions 35,000 square feet and above completed in the first half of 1992, 14 involved users from Los Angeles County, four were users from Orange County, one was from San Diego, one was from Northern California and two were from out of state.
The industrial vacancy rate for the two-county area stood at 20.7 percent as the second quarter ended, unchanged from the previous quarter and down from the 21.3 percent recorded last year.
The West End, which posted a vacancy rate of 23.5 percent, accounted for the majority of the gross sales and leasing activity in the second quarter with 1.9 million square feet and 3.4 million square feet year to date. The West End includes the cities of Chino, Fontana, Montclair, Ontario, Mira Loma, Rancho Cucamonga and Upland.
"Low lease rates and sale prices are driving market activity," said Doug Jorritsma, industrial properties specialist with Grubb & Ellis' Ontario office. "We're seeing a lot of migration from the San Gabriel Valley."
Ontario/Mira Loma led the West End in sales and leasing activity in the second quarter with 1,049,411 square feet, followed by Rancho Cucamonga with 278,154 square feet, Fontana with 277,815 square feet and Chino with 251,423 square feet.
Significant transactions completed in the West End in the first six months of 1992 included:
-- Gilleno Distribution - 166,277 square feet in Ontario
-- Hardwoods Inc. - 130,000 square feet in Chino
-- Maisto Toys - 110,817 square feet in Fontana
-- Lynns Alliance Corp. - 109,412 square feet in Fontana
-- STC Corp. - 104,448 square feet in Chino
"Of those five transactions, four involved newcomers to our marketplace," Jorritsma said. "Lynns Alliance and STC Corp. were from Los Angeles County, Hardwoods Inc. was from Orange County, and Maisto Toys was from out of state."
Vacancies in the West End ranged from a high of 29.9 percent in Fontana to a low of 12.7 percent in Upland. Vacancies in the remaining submarkets were Chino, 29.3 percent; Montclair, 22.1 percent; Ontario/Mira Loma, 23.3 percent; and Rancho Cucamonga, 17.6 percent.
The East End, which reported a vacancy rate of 16.1 percent, posted 552,841 square feet of gross sales and leasing activity for the second quarter and 1.1 million square feet year to date. The East End includes the cities of Corona, Colton, Moreno Valley, Perris, Rialto, San Bernardino, Redlands and Riverside.
Leading the East End in sales and leasing activity in the second quarter was Corona with 299,133 square feet, followed by Riverside with 137,172 square feet and San Bernardino with 79,562 square feet.
Significant transactions completed at mid-year 1992 in the East End included:
-- Cal-Mar - 96,829 square feet in Riverside
-- Cal-Tex Industries - 59,290 square feet in Corona
-- Northwestern Converting - 44,182 square feet in Corona
-- Golden Cheese - 43,577 square feet in Corona
"Of those transactions, Cal-Mar came to the Inland Empire from Los Angeles, Cal-Tex from San Diego, and Northwestern Converting from Orange County," said Jorritsma. "Golden Cheese expanded its operations in Corona."
Second quarter vacancies in the East End's major submarkets were: Riverside, 16 percent; San Bernardino, 10.2 percent; and Corona, 21.4 percent.
The amount of new speculative industrial space under construction in the Inland Empire in the second quarter of 1992 totaled 918,576 square feet, up slightly from 1991's second quarter total of 898,445 square feet.
All of the new space under construction was in the West End and the majority was in Chino. Chino had 800,000 square feet under construction, while Ontario/Mira Loma had 106,576 square feet and Fontana had 12,000 square feet.
/CONTACT: Sharon Abar of Grubb & Ellis Commercial Real Estate Services, 714-937-0881/ CO: Grubb & Ellis Commercial Estate Services ST: California IN: SU:
CH-AL -- LA016 -- 4638 07/29/92 13:04 EDT