JPMorgan Loans $210M to 3.2M SF Inland Empire Industrial Project

JPMorgan Chase is providing a three-year, floating-rate, interest-only loan of $210M to finance the first phase of construction of the Ontario Ranch Business Park, a 160-acre, 3.2M SF industrial campus in one of the hottest industrial markets, SoCal’s Inland Empire.

A joint venture between Real Estate Development Associates (REDA) and a fund managed by Clarion Partners owns the development. JLL represented the borrowers in the transaction.

The first phase of the Ontario Ranch project will encompass 1.7M SF on an 84-acre parcel that the joint venture purchased for $86M in 2020. The site is part of an 8,000-acre mixed use development known as Ontario Ranch.

In April, Savills reported that Home Depot had signed a pre-lease to occupy the 1.1M SF Class A warehouse that will be built as part of the first phase of the Ontario Ranch development.

The Phase 1 buildings will have clear heights ranging from 30 to 40 feet, 287 loading positions and 775 parking stalls. The warehouse that will be occupied by Home Depot is expected to be completed by the end of this year.

Located on the corner of Eucalyptus and Euclid avenues, the development site has direct access to Interstate 15. Chino Airport is across the street from the site and Ontario International Airport is seven miles to the north.

The Ontario Ranch Business Park is adjacent to the 124-acre Ontario Ranch Logistics Center, an industrial campus developed by the partnership of REDA and Clarion after the joint venture acquired the property in 2017.

The three-building Logistic Center encompasses 2.6M SF offering 40-foot clearances and cross-dock configuration. Construction began in 2019 and the first building in the project, totaling 1.18M SF, was leased by Kimberly-Clark.

CBRE and Lee & Associates are providing leasing services for the Ontario Ranch Business Park.

According to JLL, the Inland Empire West submarket that includes Ontario had the lowest industrial vacancy rate in the US at the end of Q1 2022 at 0.2%, which essentially is filled to capacity.

The Inland Empire has the densest as well as the tightest industrial market in the US: the overall warehouse footprint in the two-county region that stretches from the LA city limits to the Arizona border is estimated to be more than 1B SF, most of which has been filled to capacity since the end of 2021.

As industrial space for 1M SF big-box warehouses has dwindled to a diminishing number of infill sites in the western half of Inland Empire, new warehouse construction has moved to the east and to the north, where it is encountering increasing resistance from residents, city councils and environmental groups, GlobeSt.com reported.