Grocer Chedraui USA Signs 1.4M-SF Lease in Southern California
Company taking an entire warehouse owned by Bridge Industrial
By Greg Cornfield July 13, 2023 5:00 pm
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Chedraui USA, a grocer that runs the El Super, Smart & Final, Fiesta Mart stores, has signed a 1.42 million-square-foot industrial lease in Southern California.
The company, formerly known as Bodega Latina, is taking the entire building called Bridge Point Rancho Cucamonga I owned by Bridge Industrial, according to a report from Savills. It’s one part of a two-building property that spans 2.2 million square feet in the Inland Empire less than one mile from the intersection of Interstates 10 and 15.
Bridge acquired the building at 12434 Fourth Street in Rancho Cucamonga, Calif., along with a 23,240-square-foot retail building, from Big Lots for $191.1 million in 2019. The landlord used a three-year, $200 million bridge loan, according to an announcement from JLL at the time. Big Lots vacated in 2020 for a new location.
Wells Fargo (WFC) Bank provided another $230.4 million in financing for the property in June 2022, property records show.
The Inland Empire’s industrial vacancy increased 70 basis points in the second quarter to 3.8 percent, according to Savills’s report. That’s up 260 basis points over the 1.2 percent rate from one year ago. The Inland Empire also recorded negative absorption for the first time in more than two decades as the overall industrial real estate market normalizes.
Industrial rental rates have flattened and are expected to plateau while economic uncertainties persist due to increased interest rates and uneven retail sales, Savills added. Inland Empire asking rental rates increased by just 0.7 percent from last quarter to $1.44 per square foot per month, while increasing by 27.4 percent compared with one year ago.
Bridge Industrial, formerly Bridge Development Partners, announced in March that its development pipeline in Southern California and the Bay Area was at nearly 4 million square feet across 12 buildings delivering in 2023.
“Southern California and the Bay Area continue to experience some of the lowest vacancy rates in the nation, and Bridge’s current pipeline is well positioned to meet the needs of top-tier industrial users seeking modern, last-mile warehousing space,” Bridge’s Greg Woolway said in the March announcement. “Due to persistent strong market fundamentals in California, Bridge will continue to make strategic acquisitions across the state in 2023 to further grow its development pipeline and value-add investment strategy.”
Bridge has 40 buildings across 26 developments completed or under construction in California. Its current California portfolio spans 9.5 million square feet and is valued at $2.7 billion, the firm said.
Commerce, Calif.-based Chedraui USA operates 253 Smart & Final stores, 61 El Super grocery stores, three El Super Fresh stores, as well as 59 Fiesta Mart stores in five states.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
UPDATE: This article has been updated with Chedraui USA’s current name and additional information about the company. It previously referred to the company by Bodega Latina.
