Realterm Logistics is raising its bet on Southern California’s transportation and supply chain industries with a buying spree in the Inland Empire — one of the most supply-constrained markets in the nation.
The Maryland-based investment firm has closed three acquisitions in as many months for a combined $116 million, property records show. The properties in total comprise about 31.8 acres of parking space and storage facilities with hundreds of trailer stalls, as well as a 96,176-square-foot distribution warehouse plus entitlements for more truck and trailer storage space.
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In San Bernardino, Calif., Realterm acquired the distribution warehouse and about 18.6 acres at 2765 Lexington Way for $48 million. The deal is equal to almost $500 per square foot of developed space, but also $59.40 per land square foot.
Derek Fish, vice president and head of U.S. acquisitions for Realterm, told Commercial Observer that the firm hasn’t yet settled on a plan for enhancing the property, but they were intrigued by its flexibility.
“We valued the site because of the large land parcel that allows for the excess parking and storage of vehicles, whether it be truck and trailer vans or passenger vehicles,” he said.
Realterm also acquired an 8.2-acre storage facility and storage yard with 206 trailer stalls at 1408 East Franklin Avenue in Pomona, Calif., for $44 million. The property has a 5,648-square-foot office building and a 4,000-square-foot shop building, and is entitled for truck and trailer storage. The firm, too, bought a 5-acre parking and storage facility at 13819 Slover Avenue in Fontana, Calif., in August for $24 million.
The Inland Empire maintains its position as one of the nation’s hottest markets, pulling in $3.2 billion in industrial investment sales this year through August, and trucking services have become a major focal point in moving and handling rampant e-commerce growth. While the national vacancy rate rested at 4.1 percent, the lowest vacancy rate in the country was in the Inland Empire with 0.9 percent, according to a recent report by CommercialEdge.
Fish said Realterm is bullish on the tailwinds propelling the industrial market, and they have not seen the intense growth begin to plateau. But the company is planning for the potential of reduced growth, which means lower rent growth and slower leasing velocity.
“We still feel like there is embedded demand in the market, and the tenants that were unable to land anywhere or make moves that they wanted to make in a market that’s 1 percent or less vacant is still a pretty deep backlog,” Fish said. “With that said, we’ve looked at longer lease-up times, we’ve looked at reduced growth scenarios. But we haven’t seen it today where we’re panicking at all in that market, it’s still one of the strongest in the country.”
Realterm manages more than $13 billion in assets across six transportation logistics-oriented private equity fund series. In May, Realterm acquired a rare-asset trucking facility in the city of Rancho Cucamonga from Heartland Express in a sale leaseback deal for $95.5 million.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
