Buchanan Street Is Bullish on San Bernardino County

RANCHO CUCAMONGA, CA-Buchanan Street Partners is very bullish on the opportunities in San Bernardino County. The firm, which invests debt and equity capital throughout the US on behalf of institutional and private investors, recently acquired a 70,000-square-foot office project called Haven Park in Rancho Cucamonga in the County of San Bernardino, and isn't stopping there. GlobeSt.com chats with Tim Ballard, president of the firm, on why being a “first mover” from an investment perspective will give them an advantage in the County.

GlobeSt.com: How do you view long-term investment in the County of San Bernardino? 

Tim Ballard: Buchanan Street Partners is very bullish on the opportunities in San Bernardino County, and we expect to buy significantly more assets in the near future. That's largely due to the fact that asset pricing is very attractive, there's a great labor pool available, housing prices are relatively inexpensive compared with the past, and we're just very bullish on the future. At Buchanan Street Partners we believe there's very strong relative values in San Bernardino County real estate, both from the leasing up of vacant space, as well as the opportunity to increase rental levels over time as the economy continues to improve.

GlobeSt.com: So tell me about the types of tenant activity that you've seen happening in the County?

Ballard: We've seen tremendous activity with large corporate users in the industrial space as they've continued to grow their business platforms as they've seen their businesses prosper. This is typical of the real estate cycle. Large tenants grow first. Then as smaller tenants and the more regional businesses feel confidence in their business platform and confidence in hiring, they start to expand their business needs as well. We believe that over the next year to two years that activity will translate into the smaller businesses growing their real estate needs. 

GlobeSt.com: What do you think about the quality of the product in the market?

Ballard: The quality of the market in the Inland Empire is relatively high from a physical stand point, because much of the development has happened over the last 20 years. In comparison, in many other markets such as Los Angeles, you have a much older stock.  And so, and from a physical stand point, we're very pleased with the quality that's available us for us to buy.

GlobeSt.com: What is your investment timeframe looking ahead?

Ballard: We are actively looking for additional investments, and expect to acquire a significant volume over the next couple of years. Part of the reason we're seeking to acquire more properties is that we believe that San Bernardino County is at a relative trough in terms of values. There's a lot of upside from there. That combined with the fact that the County isn't attracting significant institutional capital yet for its office product. We plan to be at the forefront in order to take advantage of what we think are relative bargains. 

There are relative bargains that will enable us to get into properties at a very attractive basis that will result in strong returns going forward. 

GlobeSt.com: What is the greatest opportunity in being a “first mover” in the market?

Ballard: Large institutional investors over the last two or three years have been focused on a handful of primary markets like San Francisco, Los Angeles, New York City, Boston. They've had a very significant impact on values. Our expectation over the next couple of years is that they'll start to reach into places like San Bernardino County. That will bring up values for the assets we intend to acquire over the next two years.

GlobeSt.com: What would you tell firms interested in investing in San Bernardino County?

Ballard: There's a remarkable opportunity to buy assets significantly below replacement cost, and with that kind of basis there's a great opportunity for generating future returns.