Western Alliance Bank Lends $80M for Inland Empire Warehouse Development
Funds helped Patrinely Group acquire 38 acres of land for $60.8 million
By Greg Cornfield March 7, 2023 4:25 pm
reprints
Western Alliance Bank has set the stage for the latest industrial development in Southern California’s Inland Empire with an $80.3 million loan, Commercial Observer has learned.
The funds helped Patrinely Group acquire nearly 38 acres of land in Menifee, Calif., from Jupiter Holdings for $60.8 million, according to data provided by Vizzda. The developers have proposed to build multiple buildings with 668,000 square feet of warehouse space at 33630 Zeiders Road, just south of the Scott Road interchange on Interstate 215, known as the Escondido Freeway.
The development would be the second phase of the Commerce Pointe Project. The adjacent first phase includes 157,147 square feet of industrial space on 10 acres.
Neither Patrinely Group nor Western Alliance immediately returned requests for comment.
Cushman & Wakefield (CWK)’s national market outlook released Monday noted consumer spending on goods along with e-commerce sales started tapering back toward pre-pandemic levels last year, and that higher interest rates are weighing on demand.
“A slowdown in (industrial) demand can make it tempting to believe that rents will decline and that there will be some respite for occupiers who have been forced to pencil in 40 percent increases in real estate costs,” Rebecca Rockey, head of economic analysis and forecasting for C&W, said in a statement. “Although we expect rent growth will decelerate meaningfully in the near term, it is unlikely to decline. Vacancy is at 3.3 percent nationwide, and the construction pipeline, which is 40 percent spoken for, has a swift construction cycle, meaning construction will pull back quickly and put a ceiling on how high vacancy can go, despite softer demand.”
Additionally, the Inland Empire has been the fastest-growing industrial market in the nation, with property rents increasing an average of 28 percent upon lease renewal, according to CommercialEdge. Approximately $5 billion in warehouse sales closed in the Inland Empire in 2022.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
