Dedeaux Sheds Big Box Industrial in the Inland Empire
An institutional buyer purchased the 1 million-square-foot distribution facility after Cardinal Health leased the entire property.
“The sale of the building was in line with our original investment strategy, which envisioned a timely disposition following the stabilization of the asset,” Alon Kraft, COO of Dedeaux Properties, tells GlobeSt.com. “Having signed Cardinal Health to a long-term lease, not long after acquiring the building, certainly sped up the process.”
As expected, Dedeaux saw substantial demand for the property, but also in line with the firm’s high expectations, considering the lease with Cardinal Health. “The demand was very strong. This is ultimately a unique asset in the marketplace and one that will be difficult to replicate in bulk,” says Kraft. “This was an extremely well located building leased long term to a Fortune 100 company, so as you can expect, our expectations were very high. There was a lot of interest, which more than met our expectations.”
Opportunities in this size range are rare in this market, helping to drive activity. “Given the overall transformation of the industrial sector and strong demand by major players in the marketplace we still expect to see more assets come to market,” says Kraft. “However, we expect to see a smaller pool of opportunities of this size. Interest remains high in this space for industrial product of all sizes.”
Dedeaux plans to continue investing in the Inland Empire market. “We continue to believe in the longer-term fundamentals of the market,” says Kraft. “We recently completed the development of a 361,000 square feet warehouse and distribution building in the sycamore canyon business park, a location that has become an important distribution route for Southern California. We will continue to pursue new investment and development opportunities in this market.”
They aren’t alone. There is continued interest from the full spectrum of capital players in both this submarket and this size facility. “Both private and institutional investors view the Inland Empire as a major regional and national distribution hub,” says Kraft. “We will continue to see investment in this asset class remain steady particularly because of its association with e-commerce and online sales.”
The property is on 52-acres, with 147 dock-high loading doors, four ground-level loading doors, 36-foot warehouse clearance with cross-dock loading, 52’x50’ typical bay spacing, an ESFR sprinkler system, and two secured truck courts with 192 trailer parking spaces.