Massive distribution facility leased to Nordstrom in Riverside sells for $124 million
(This article was published by the Press Enterprise on Augustc 15, 2019)
In one of the largest property sales in the Inland Empire’s history, a 1-million-square-foot logistics hub in Riverside’s Hunter Park area has been sold for $123,750,000, the property’s developer said Wednesday.
The building, a fulfillment center leased by Nordstrom, is a major feature in the Columbia Business Park project. Nordstrom signed a long-term lease for the facility late last year and is outfitting it with high-tech features.Kevin McKenna, executive vice president with the brokerage firm Colliers International, said the retailer signed the lease before construction was completed. Colliers, along with CBRE, helped broker the sale of the building. Terms of Nordstrom’s lease were not disclosed.
“It takes a long time to set up all the material-handling processes that go with an automated system,” McKenna said. “It could take up to a year.”
Real estate investment firm Trammell Crow Co., the project’s developer, and its client, money management firm Washington Capital Management, sold the building to ASB Allegiance Real Estate Fund, a Washington, D.C.-based investment company with about $7.6 billion in assets.Washington Capital Management had invested in the project on behalf of an unidentified pension fund.
The fulfillment center at 490 Columbia Ave. is at the intersection of Michigan Avenue and on the outer edges of the Hunter Park industrial complex.
It’s the first phase of a warehouse development that includes plans for a 371,000-square-foot distribution center that already has a pad in place and a 7-acre parcel that can accommodate a 90,000-square-foot building.
CBRE, in its second-quarter survey of the region’s industrial market, noted that developers are hungry for more warehouse properties. They are paying 20% more than they did a year earlier, and the typical lease has increased by 13%.
Also, the vacancy rate of 3% for these properties is the lowest it has been in the current economic cycle, CBRE found, which puts more pressure on warehouse users seeking space.