Industrial Tenants Need to Act Really Early

VERNON, CA—The industrial market in Vernon is so tight, tenants are getting in on developments before ground breaking begins. Xebec has purchased a 12.7-acre land site in Vernon to build a speculative 203,300-square-foot industrial facility. Construction on the property will start in late November of this year, but the developer has already received interest and one proposal from potential tenants.  

“There are a couple of developments going on right now, but the vacancy in Vernon is only about .7%,” Cameron Merrill, first VP of brokerage industrial services at CBRE, tells GlobeSt.com. “Every single new development in Vernon has a lot of activity and we are starting to see new properties come into the market. Vernon is a very unique city because it allows for all different uses and is still very friendly to manufacturers because Vernon produces its own power. It is likely that we could have a large garment company doing some manufacturing and some distribution; we could have full manufacturing come in; or we could have ecommerce.” The property will be built to accommodate a single-tenant user, and will be flexible but tailored for ecommerce. Merrill and his CBRE colleague Joe Privett represented Xebec and the seller, Pechiney, in the land transaction, and will be handling the leasing of the property.

The land sale was not widely marketed because it was a complex site. “The seller was looking for a company that could understand the complicated real estate deal from the standpoint of the geo tech, the environmental and the entitlement,” Privett, the lead on the sale, tells GlobeSt.com. “They were looking for one particular group who had all three of those qualities and was an expert in that field. Xebec had developed the properties directly to the east of this site, so they had dealt with a similar situation in the past and were comfortable with it. If we had done a managed bid, we probably would have gotten 25 offers on it.” Once complete, Xebec plans to hold the development for the long term. 

Located at 5370 Boyle Avenue in Vernon, the property will feature 25 dock high positions, 32-foot clearance height, ESFR sprinkler system and 130-foot truck turning radius. It will also have 12,908 square feet of office space and has additional land for parking with 294 spaces. Although the leasing team could not comment on projected rents for this property, they said that market rents in the area are in the mid-to-high $0.60 triple net range.