Target, the country’s seventh largest retailer, has agreed to a 15-year, 1.2 million square foot pre-lease for a brand-new warehouse built in Jurupa Valley, a city in the northwest corner of Riverside County, California.
Target: Expanding in Southern California
The building at 6186 Jurupa Valley is one of five industrial buildings on a 3.6 million square foot complex built by C.T. Realty and Prudential Global Investment Management.
With four additional transactions for extra-large warehouses signed in the third quarter and another announced in the second week of October, mega-leases of 1M S.F. or more are driving demand in the Inland Empire this year.
The retail giant has the opportunity to extend the lease for an additional 15 years under the provisions of the contract. Target’s industrial presence in the Inland Empire will grow to 3 million square feet thanks to the new warehouse in Jurupa Valley.
Inland Empire: The Most Attractive Industrial Market in the U.S.
According to JLL’s most recent market analysis, Inland Empire is still the most active industrial market in the U.S., with vacancies tracking at 0.6% in the third quarter.
According to JLL, the trajectory of asking rates for industrial space in the Inland Empire is still similar to that of a Saturn V rocket launch. It recorded a 19.7% increase in Q3 over Q2 rentals.
Other Deals Boosting Inland Empire’s Growth
JLL claims two deals contributed to the Inland Empire industrial market rate’s growth in Q3.
Ecolab signed a lease renewal for a 577K S.F. facility in Fontana. International Vitamins renewed a 217K S.F. lease in Jurupa Valley for $2.20 NNN.
According to JLL, huge, high-end blocks have continued to drive the Inland Empire market’s rental rates to all-time highs.
Since 2022, developers have started constructing 16 warehouses with 1 million square feet or more. Despite the 3.4M S.F. deliveries in Q3, developers are still eager to spec out new projects to contribute to the record 39M S.F. now under construction, according to JLL.
The Inland Empire saw deliveries surpass absorption for the second consecutive quarter in the third quarter. It is a sign that supply is finally catching up with demand in the two-county market, which extends from the city limits of Los Angeles to the Arizona border.
Developers are being pushed to look for sites in the desert regions of the eastern half of the market due to the unprecedented growth of the Inland Empire’s industrial footprint. The industrial footprint is estimated to total more than 2B S.F. This is because infill locations are the only available sites in the western half of the market.
A NIMBY reaction sparked by the expanding industrial sprawl has led to moratoria banning the construction of new warehouses in several municipalities.
Startempire Wire’s Coverage of the Inland Empire Industrial RE Market
We at Startempire Wire have been tracking and reporting on the growth of industrial RE deals in the region. We reported in Q2’22 that The industrial real estate market in Southern California has remained unusually tight in the first three months of 2022, owing to global supply chain challenges and rising consumer demand. Whereas vacancy, average asking rents, and construction achieved new highs following the most incredible year of market fundamentals in the Inland Empire’s history.
Other deals we covered include:
American retailer Target Corporation has its main office in Minneapolis, Minnesota. The complex at 6186 Jurupa Valley, constructed by C.T. Realty and Prudential Global Investment Management, has five industrial buildings totaling 3.6 million square feet.
The Inland Empire is still the most active industrial market in the U.S., with vacancies tracking at 0.6%, according to JLL’s most recent market research. The most appealing industrial market in the United States is the Inland Empire.