RANCHO CUCAMONGA, CA—The launch of Goodman Birtcher's 1.6-million-square-foot industrial development, reported last week on GlobeSt.com, is only the beginning. The firm is planning five developments in the Southern California market, totaling 6.3 million square feet and 15 million square feet of industrial developments nationwide, an estimated cost of $1.4 billion for work in progress. The North American subsidy of the Australian-based Goodman Group, Goodman Birtcher CEO Brandon Birtcher sat down with GlobeSt.com to talk about the firm's plans for the Southern California market, its choice to launch the company's SoCal rollout in Rancho Cucamonga and how it is funding this stream of class-A industrial developments. Here is what he has to say:

GlobeSt.com: Why did you choose Rancho Cucamonga, CA, as one of your development locations?

Birtcher: The Inland Empire has two markets, the east and the west, and I think if logistics could find the appropriate location, most would want to be located in the west because they could get twice the turns out of the Port of L.A. That is significant. If you are in the ecommerce industry, it is also important because it is central to fulfillment centers. So, the west has been a really important part of our strategy. Although the east has some great opportunities and wonderful sites, if I had the choice to kick off our Southern California portfolio, it would be in the Inland Empire west. The site was attractive to us because it is 75 acres, which is difficult to find in the west, and because it has remarkably convenient access to the 10 and 15 freeways. Those are very important arteries to the Inland Empire. We liked the community. Rancho Cucamonga has a very business friendly, forward-thinking set of leadership, and it brought the best out in both of us. They were very excited about what we were proposing so that they could compete for some of these fulfillment and ecommerce users to move into the city and generate additional sale tax.

GlobeSt.com: You purchased the land in 2012. What has been happening since the original land purchase?

Birtcher: The seller had occupied the site until February 29, 2014. That gave us plenty of time to work with the city, design the project and obtain all of the necessary entitlements. When the former tenant vacated the site, we immediately commenced construction. There are two buildings: a 500,050-square-foot building will be completed in March 2015 and a 1.03-square-foot building that will be completed in May 2015.

GlobeSt.com: Are you targeting a single tenant or multiple tenants for the site?

Birtcher: These are fairly typical sized buildings for today's logistics companies. We do plan to lease to single-user occupants. They have, however, been designed to be easily divisible. All of the buildings we are developing in California are being designed with ultimate and maximum flexibility for a number of uses. But, our customers tend to be a larger average size globally. We have 185 million square feet in our portfolio and 1,500 customers. When you think about the average sized customer in our buildings, that is a pretty large average for the conventional industrial user. In the last five years, the bulk of what Goodman has been building globally has been over a third of a million square feet in size, and they have been single tenant occupants. That is what we expect to experience here nationally as well.

GlobeSt.com: How are you funding these developments?

Birtcher: When we were formed in June 2012, we were capitalized with 890 million of equity. That came 55% from the Goodman Group in Australia and 45%, which is $400 million, roughly, from the Canadian Pension Plan Investment Board, the social security system in Canada. Both partners are looking to grow their stake in this partnership, and continue to fund our activities. We haven't taken on any debt at this time. We certainly will as we move into stabilization on these buildings. When the first wave of buildings are leased, we will place a modest amount of debt. Goodman's philosophy as is CPPIB's is to be low leverage. At the company level in Australia, Goodman is only 20% leverage, which is one of the lowest leverage organizations in the world in our space. That makes us very competitive, and we have a tremendous amount of cash available for these projects. We'll probably leverage these buildings between 40% and 50%.

GlobeSt.com: What are some of the other developments you have planned for Southern California?

Birtcher: We have five projects and 6.3 million square feet planned for Southern California. Our strategy has a very important infill component in Southern California and North New Jersey. It isn't all about big box locations. We want to be taking down 5-10 acres sites as well, redeveloping them and providing state-of-the-art, class-A facilities for the logistics business. One of the five projects is a five-acre site in Compton for 102,000-square-foot building, and we really intend to do much more of that in the years ahead.

GlobeSt.com: Last thoughts?

Birtcher: In my 38 years, I have never seen this sector in such a reinvention state as it is now. The big drivers of this change are ecommerce and same day delivery, which is bringing the buildings closer the consumers, the cost of fuel being upwards of $5 per gallon, the 600 inner mobile yards throughout America and the issue of carbon consciousness with efficiencies in transportations models. These buildings generally have 10-20 year leases with these customers, so you really have to think 20 years in advance in terms of reducing the carbon footprint. One of the big game changers for our designs have been the super post panamax and the ultra post panamax ship designs, which have 14,000 to 15,000 TEUs on a ship being dropped at one time versus the conventional 4,400 TEUs at a time. It forces the transportation industry, in a very short time, to pick the shipment up before they have to pay a penalty, and then bring them in to a facility that doesn't have enough truck doors to handle them. We have added 185-foot truck yards at our buildings to accommodate onsite trailer storage. Now, we can put more storage onsite rather than relying on secondary locations, like ports, for storage.