Kellogg Inks 450,000-SF Catellus Deal

FONTANA, CA-Catellus Commercial Group, a wholly owned subsidiary of San Francisco-based Catellus Development Corp. has signed a five-year lease with cereal maker Kellogg USA Inc., which will occupy a 450,000-sf, build-to-suit distribution facility at Kaiser Commerce Center in Fontana.

Terms of the deal were not disclosed, but Inland Empire commercial real estate sources believe the total consideration for the lease may be in the neighborhood of $7 million to $7.5 million, based on other deals on the area.

Catellus says construction is projected to begin by June on the project, which will become part of the 588-acre Kaiser Commerce Center at the intersection of the I-10 and I-15 freeways. The new Kellogg facility will be built along Valley Boulevard in the Commerce Center, according to Michael Chavez and Bill Heim of the Lee & Associates Ontario office, who are listing agents for the development. Chavez and Heim represented Catellus in the Kellogg lease, with Glen Allen of Newport Real Estate Services in Newport Beach representing Kellogg.

Chavez tells GlobeSt.com that Kellogg, based in Battle Creek, MI, will be moving into the Fontana space in a relocation from the City of Industry, where it occupies approximately 400,000 sf in a lease that will expire at about the same time it moves into its new building.

Kellogg is expected to make the move after completion of construction in early 2004. The company is an existing Catellus customer, having recently leased two newly developed distribution and warehouse facilities–a one-million-sf building in Minooka, IL, and a 500,000-sf, rail-served building in Stockton, CA.

Including the Kellogg building, Catellus has leased or sold more than three million sf of recently developed distribution and warehouse space at Kaiser Commerce Center in the past 24 months. The 588-acre former steel mill site, which was acquired by Catellus Commercial Group in June 2000, is near the Ontario Airport. The nearby I-10 and I-15 freeway exchange accommodates more than a third of the truck traffic that enters and leaves California.