SAN BERNARDINO, CA-Hewlett-Packard Co. has signed a seven-year lease for 1.4 million square feet of space at the Cajon Distribution Center at 7010 and 7140 N. Cajon Blvd., bringing the property to 100% occupancy. Westcore Properties and CT Realty Investors acquired the property in August 2010 in partnership with PCCP, LLC and Behringer Harvard. The lease by Palo Alto, CA-based Hewlett-Packard represents one of the largest industrial leases in terms of square footage to have ever occurred in the Greater Los Angeles market.

Westcore Properties and CT Realty were represented by Darla Longo, Jim Koenig, Dave Consani and Dan De la Paz of CB Richard Ellis. HP was represented by Alex Somerville, Kent Gilbert, Raul Campos and Grant Ross, also of CB Richard Ellis.

According to Hack Adams, senior vice president of leasing with Westcore Properties, HP will occupy the entire two-building institutional-quality class A industrial park. “Cajon Distribution Center is an ideal distribution choice due to its functional space, strategic location with immediate access to the 215, 210, 10 and 15 interstate freeways, and its state-of-the-art cross dock configuration,” he said.

When the joint venture partners acquired the property last year, they said that they were attracted to the investment due to scarcity in the San Bernardino market for well-located, secure industrial space for larger users. Cajon Distribution Center, which is situated on a 63-acre site, was built in 2008.

Longo, a vice chairman with CBRE, which represents the CT/Westcore partnership, notes that the Inland Empire is the largest distribution market in North America and houses more than 400 million square feet of product that represents 25% of the Los Angeles industrial base. Terms of the HP lease were not disclosed.

The HP lease comes at a time when the Inland Empire industrial market has show marked improvement, according to the latest CB Richard Ellis quarterly market survey, which listed overall average asking lease rates for industrial space in the I.E. at 33 cents per square foot, NNN. According to that survey, the I.E. chalked up 50 combined industrial leases and sales occurring in the fourth quarter, closing 2010 with over 31 million square feet of gross activity, the highest amount produced since 2006.

The 2010 results represented a 7.7-million-square-foot improvement from 2009 and an 11.2-million-square-foot improvement from 2008, according to the CBRE report. The fourth quarter generated the highest amount of net absorption in 2010 with a total of 3.8 million square feet, a year-over-year increase of 3.5 million square feet. "The Inland Empire ended the year with a total of 11.4 million square feet of net absorption, surpassing the 2009 annual total by more than five million square feet," the CBRE survey said.