$21.5 million Senior Loan for a 4-Building Class A Industrial Portfolio in San Bernardino, California
PCCP, LLC provided a $21.5 million senior loan to finance the acquisition and lease-up of a four-building portfolio of class A industrial buildings totaling 801,933 square feet. The property is located within the Interchange Business Center adjacent to Interstate 215 in San Bernardino, Calif., which is part of the Inland Empire industrial market in the eastern portion of greater Los Angeles. The property is currently 29 percent leased to two tenants, both 3rd party logistics providers who are currently occupying 233,883 square feet.
CT Realty Investors and Behringer Harvard formed a joint venture to purchase the portfolio in an off-market transaction at a significant discount to replacement costs.
“We are confident in the buyer’s business plan to lease up the remaining vacant space to multiple tenants,” said Ron Bonneau with PCCP. “Given the high quality of construction and the buyer’s low purchase price, we believe the portfolio will be able to become a competitive market participant which previously was not the case given the distressed nature of the previous ownership.”
Bonneau added the Inland Empire industrial market is improving and that there is already a significant amount of interest in the remaining space in the portfolio.
The property was built in 2007 and consists of four, one-story, concrete tilt-up industrial buildings ranging in size from 94,108 square feet to 354,108 square feet within Interchange Business Center, an industrial park that has a total of six buildings. As further testimony to the leasing potential, the other two buildings in the industrial park that were not included in the buyer’s purchase are 100 percent occupied by Michelin Tires (801,000 square feet), and Dollar Tree (449,000 square feet). All of the buildings within the center are Silver LEED certified with ESFR sprinklers and 30-foot minimum clear height. Additionally, all six buildings have fully secured truck court areas ranging from 135 to 185 feet, and have extra trailer storage capacity.
The portfolio is strategically located in San Bernardino County, which is part of the broader Inland Empire, the trade gateway of Southern California. The site provides direct access to the I-215 and newly completed I-210 freeways, which lead directly to the I-15, I-10 and State Route 60 freeways—all major transportation routes serving Southern California and the Western United States. The property is approximately six miles north of the BNSF Intermodal Facility that transports warehouse goods to and from the ports of Long Beach and Los Angeles.
In comparison with Los Angeles, the Inland Empire offers an ample supply of cost-effective industrial space, reduced congestion and lower costs for living and doing business. These are among the reasons that much of the cargo entering through Southern California’s seaports and airports is processed in the Inland Empire. The region’s strategic location and trade-related infrastructure has positioned it to benefit from potential increases in imports and exports as the national economy recovers.
About PCCP, LLC: PCCP, LLC is a premier real estate private equity firm focused on commercial real estate debt and equity investments. PCCP has over $6 billion under management in multiple closed-end funds and joint ventures with institutional investors. With 33 investment professionals and 55 employees across four offices located in New York, San Francisco, Sacramento and Los Angeles, PCCP invests throughout the United States. Learn more about PCCP at www.pccpllc.com.