Blackstone’s Link Logistics Pays $125M for AutoZone Distribution Center in SoCal
By Greg Cornfield April 3, 2023 10:55 am
reprints
More than $1 billion in warehouse deals have closed just in Southern California’s Inland Empire region so far this year, significantly more than in any other market in the United States.
Blackstone (BX)’s Link Logistics added another nine-figure trade to the tally as it acquired an AutoZone distribution center from a REIT managed by JPMorgan for $125 million, according to data provided by Vizzda. AutoZone is signed to lease the property through April 2033, with two five-year options to extend.
“Industrial fundamentals remain solid, especially in premier markets like the Inland Empire, where we continue to see unique opportunities to acquire great real estate,” Matthew Chapman, managing director of investments for the Western U.S., told Commercial Observer in a statement. “Through this transaction we added a Class A infill property in a high-quality location, and a long-term credit-worthy occupier.”
The last-mile logistics company closed the 490,000-square-foot development for about $255 per square foot. The center was completed in 1989 on a 25-acre property at 1800 South Wineville Avenue in the city of Ontario.
Despite the economic uncertainties driven by high inflation and borrowing costs, the Inland Empire attracted the most warehouse capital in the first two months of the year, accounting for more than one-fifth of all sales volume nationwide. Indeed, the market is blowing all others out of the water, with $855 million in sales in January and February alone, according to a recent report from CommercialEdge, prior to when the AutoZone warehouse sold. That’s more than four times the second-place market, New Jersey, which completed $209 million in industrial trades.
That’s because the Inland Empire has the highest rent growth in the nation at 15.6 percent year-over-year (followed by Los Angeles in second place) and it still boasts a 1.7 vacancy rate.
Just in the city of Ontario, major companies Amazon, Walmart and Home Depot have set up big operations. In November, REDA paid $122 million for 130 acres and will construct the 2.9 million square feet of warehouse space at South Ontario Logistics Center. Last year, Home Depot signed a 1.1 million-square-foot lease in the master-planned Ontario Ranch at a building owned and developed by Clarion Partners. And Amazon signed a 4.1 million-square-foot lease for what will be its largest warehouse in the nation in the city of Ontario.
Launched in 2019 by Blackstone, Link Logistics owns, has interests in, or has under development properties that represent 545 million square feet of industrial space. That space was 97.3 percent leased as of the start of 2023.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
UPDATE: This post has been updated since publishing to include commentary from Link Logistics.
