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Commercial Real Estate

CapRock Partners Breaks Ground on 2 Million SF Industrial Masterplan in Inland Empire West

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Leading developer bringing new LEED certified industrial complex designed to support economic growth and positioning to key Southern California logistics location

CapRock Partners is underway on the construction of Phase I of Palomino Ranch, a large-scale, state-of-the-art master-planned industrial warehouse development in Norco, Calif. totaling approximately 2 million square feet across 24 buildings on approximately 112 acres. The initial phase of the Class A project includes eight stand-alone industrial buildings totaling approximately 700,000 square feet on 44 acres.

At total project completion, Palomino Ranch will be the largest industrial real estate development in Norco’s history. The project will be LEED certified and will feature design elements such as wrap-around wooden porches and lantern streetlighting that are reflective of Norco’s equestrian background and nickname, “Horsetown U.S.A.”

“CapRock Partners creates world-class logistics facilities, and our team has made a commitment that all new ground-up development projects we build in California will meet or exceed LEED certification standards going forward, and we are excited to initiate this commitment with the commencement of Palomino Ranch,” said Patrick Daniels, co-founder and chief executive officer at CapRock Partners. “The landmark development is designed to not only satisfy the needs of a wide range of tenants and industries requiring accessible high-quality warehouse space, but it will also reflect Norco’s rich local history and character through its equestrian-themed aesthetic.”

Phase 1 buildings will range from approximately 55,000 square feet to 156,000 square feet, with clear heights from 30 feet to 36 feet. Buildings greater than 20,000 square feet will offer up to 6,000 square feet of mezzanine office space. Other features include secured and unsecured concrete truck courts, 125-foot truck court depth, ESFR sprinklers and up to 4,000 amps of power.

“The Inland Empire industrial real estate market is near full-occupancy as retailers and suppliers continue to shift their strategies in today’s post-pandemic economy,” added Daniels. “Norco is well-positioned geographically for logistics and transportation in the Inland Empire West submarket, within minutes to Orange County, and Palomino’s Phase I will be coming online at an ideal time to provide needed warehouse space.”

Located at 1811 Mountain Avenue, Palomino Ranch is west of I-15, accessible via the Second Street exit. The property is approximately two miles north of the 91 Freeway/I-15 interchange and is easily accessible to additional regional transportation routes such as the 71 Freeway, 60 Freeway and I-10, providing quick access to nearly any location in the Los Angeles Basin.

The project is approximately one hour driving distance to Los Angeles International Airport and the ports of Long Beach and Los Angeles. The location is also within one-day truck service to key logistics nodes in Northern California’s Bay Area, Salt Lake City, Las Vegas and Phoenix. Truckers can reach further Western U.S. linkages such as Portland, Ore., Boise, Idaho, Denver and Austin, Texas within three days. Palomino Ranch’s corporate neighbors include FedEx, UP and Amazon, among others.

“Palomino Ranch is setting a new high standard for Southern California industrial real estate development, and our team is grateful for the City of Norco’s partnership in developing a facility that will elevate the city’s economic position and overall efficiency while supporting employment growth in the area,” said Jon Pharris, co-founder and president at CapRock Partners. “CapRock is investing Norco, a critical point in the supply chain, and as more national and multinational corporations establish their businesses here, CapRock is pleased to offer a modern LEED certified warehouse complex that allows them to enhance their operations.”

Jeff Ruscigno, Brian Pharris, Paul Earnhart, Ryan Earnhart, Austin Hill and Jeff Smith of Lee & Associates Commercial Real Estate Services have been retained to market the lease availabilities at the Palomino Ranch. Phase II-A, consisting of nearly 750,000 square feet is planned to begin in 2023 and Phase II-B will be approximately 533,000 square feet.

Palomino Ranch is CapRock ‘s third ground-up development project in Norco and is one of two projects the firm is currently developing within the city. CapRock is in under construction on Saddle Ranch South, a three-building, 374,000-square-foot industrial complex across 23.8 acres, located less than three blocks north of Palomino Ranch at 3000 – 3100 Horseless Carriage Drive.

In 2021, CapRock completed and sold Saddle Ranch Business Park, a 422,000-square-foot four-building Class A industrial warehouse complex in Norco. The asset was 100% leased to vitamin and nutrition company, Goli Nutrition, before the sale.

CapRock’s portfolio and proven track record include nearly 30 million square feet of industrial real estate assets in Central and Southern California, Las Vegas, Phoenix and Texas. The firm will be under construction on approximately 10 million square feet of industrial space in the next twelve months, inclusive of Palomino Ranch and Saddle Ranch South, and continues to actively pursue new investment opportunities for ground-up development and value-add repositioning in key logistics locations throughout the Southwest U.S. and Texas.

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

Commercial Real Estate

Affinius Capital and McDonald Property Group Execute Pre-Lease with Otto Cap at The HUB @ Ontario International Airport

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Affinius Capital and McDonald Property Group are pleased to announce the signing of a major lease with Otto International, Inc., at The HUB. This 254,677-sq.- ft.-building lease located at 3551 East Jurupa Street, City of Ontario establishes The HUB’s first lease at its premier master-planned logistics park in Ontario, Calif. It has been secured six months prior to the scheduled completion of its initial Phase 1 of the project totaling two million sq. ft. consisting of four buildings.

The project ownership is CanAm Ontario, LLC, which consists of a notable Canadian pension fund, an investment affiliate of Affinius Capital, and McDonald Property Group. CanAm Ontario recently executed a 55-year ground lease with Ontario International Airport Authority to develop the entire 200-acre site.

“Securing this lease ahead of completion underscores the appeal of The HUB’s quality and location adjacent to Ontario International Airport,” said Eddie Gonzalez, managing director of asset management for Affinius Capital. “We are privileged that Otto International selected our Inland Empire development and pleased to count them among the companies we serve throughout our global industrial and logistics portfolio.”

Otto International committed to this long-term 154-month lease with CanAm Ontario to satisfy its expansion and future growth needs. The building will operate to scale up Otto’s next day’s shipping promise at larger volumes and reduce costs through new fulfillment automation integrated in the facility. With over 70 years of experience, Otto has established itself as a leading global manufacturer of quality headwear with 20,000 active wholesale partners. 

“Otto is extremely proud to partner with Affinius Capital and McDonald Property Group in the development of our soon-to-be flagship West Coast Distribution Center in Ontario, California,” stated Mr. Razgo Lee, Chief Executive Officer of Otto International. “Our new robotic automated facility at The HUB will allow us to streamline our West Coast logistical hub and distribution point as the premier tenant in this amazing facility. We are honored to participate in such a monumental project which will support our growth plan and commitment to our valued customers.”

Darla LongoBarbara PerrierWalt ArringtonJoey Sugar and Joe Werdein represented McDonald Property Group and Affinius Capital in the lease transaction. Dylan McDonald and Dillon Dummit of Savills International represented Otto International.

Situated directly across from Ontario International Airport (ONT) in San Bernardino County, the project is notable for its scope, location, timeline and complexity. It will also be one of the first large-scale developments in Southern California to incorporate an innovative carbon-reduction system for the slab, tilt wall panels and paving as part of Affinius Capital’s strategic plan for achieving its environmental sustainability goals through concrete decarbonization methods. Multiple strategies for incorporating concrete decarbonization, sustainable elements and achieving LEED® Gold certification for this industrial development were identified. The carbon reduction of emissions volume resulting from this project, as compared to conventional concrete design for industrial projects, will achieve 35% less embodied carbon from a conventional concrete design or approximately 44,000 tons less embodied carbon released into the atmosphere across the entire HUB development.

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Commercial Real Estate Transactions

Hanley Investment Group Arranges Sale of Chipotle Mexican Grill and Starbucks Drive-Thru in Rancho Cucamonga, Calif., for $6.22 Million  

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Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm arranged the sale of two stand-alone buildings occupied by a Chipotle Mexican Grill and the adjacent Starbucks Drive-Thru in Rancho Cucamonga, California. The sales price was $6.22 million.

Hanley Investment Group’s Executive Vice Presidents Bill Asher and Jeff Lefko represented the seller, Chase Partners Ltd., based in Glendale, California. The buyer, a private investor based in Los Angeles, was represented by Shirley Kim at Epique Realty, also of Los Angeles.

The property involved a complete rehabilitation of the facility and the expansion of Starbucks by the developer, Chase Partners Ltd., a leading retail and industrial developer in Southern California since 1993. Chase is an active developer of Starbucks and Chipotle sites, as well as other name-brand retail developments, with a dozen projects currently underway. Michael Carter served as the project manager for Chase.

“We generated multiple qualified offers primarily from Southern California-based buyers and leveraged our extensive broker relationships to procure a repeat all-cash buyer, ensuring a smooth and timely closing by year-end,” said Asher.

Built in 2003, the two freestanding properties occupied by a 2,508-square-foot Chipotle Mexican Grill and a 4,000-square-foot Starbucks Drive-Thru sit on a 1.31-acre parcel located at 10811-10831 Foothill Boulevard, near the signalized intersection of Foothill Boulevard (U.S. Route 66 with over 32,000 cars per day) and Aspen Avenue.

Starbucks (NASDAQ: SBUX) recently signed a new 10-year extension, expanding into the adjacent 2,500-square-foot space for a total of 4,000 square feet, showing its continued long-term commitment to this location. The Rancho Cucamonga Starbucks is a top 15% location nationwide, based on customer traffic (Placer.ai). Starbucks is the largest coffee house chain globally, with approximately 40,199 stores in 84 countries, and Fortune ranked it as one of the “World’s Most Admired Companies” from 2009 to 2024.

Chipotle (NYSE: CMG) is ranked on the Fortune 500 and is recognized on Fortune’s Most Admired Companies 2024 list and Time Magazine’s Most Influential Companies. There are over 3,600 restaurants in the United States, Canada, the United Kingdom, France, Germany, and Kuwait and it is the only restaurant company of its size that owns and operates all its restaurants in North America and Europe.

According to Asher, Chipotle has nine years remaining on its lease, having recently extended early for five years, demonstrating its ongoing investment in the site. The Rancho Cucamonga Chipotle is a top 25% location in California, based on customer traffic (Placer.ai).

Chipotle and Starbucks are located across from Terra Vista Town Center, one of Rancho Cucamonga’s most established and premier regional shopping centers. The 645,000-square-foot Terra Vista Town Center is ranked within the top 25% of power centers nationwide, based on customer traffic, according to Placer.ai. The center is anchored by Target, Hobby Lobby, and LA Fitness, along with other national tenants including Ross Dress for Less, Michaels, HomeGoods, Panera Bread, Wells Fargo, CVS, Bank of America, and Five Below. The property is ideally situated in the center of the city within minutes of the 10, 15, and 215 freeways. The property is located next to Rancho Cucamonga’s 44 million square feet of office and industrial space, which combined employs over 65,000 employees.

The population of Rancho Cucamonga grew 53.5% from 2010 to 2020. Within one mile of the property, the population experienced a 317.8% growth in population from 2010 to 2020. More than 276,000 residents with an average household income in excess of nearly $113,000 are within a five-mile radius.

Asher added, “It was one of our most sought-after listings in 2024, receiving significant interest and activity from both buyers and brokers. The combination of two corporate leases with two of the most recognizable national credit QSR tenants in the U.S., both with a 21-year operating history at the site, made it a highly desirable investment.”

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Commercial Real Estate

Valore Ventures Sells SoCal Single-Tenant NNN Retail Property 

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1031 Exchange Features Long-Term Ground Lease with McDonald’s and Newly Constructed Drive-Thru Restaurant  

Valore Ventures has closed on the ground lease sale of a new, 3,895-square-foot dual lane drive-thru restaurant at 18150 Arrow Boulevard in Fontana, California. The 20-year, nearly one-acre ground lease was signed with leading global food-service retailer McDonald’s in September and construction was completed late December. 

SRS managing principals Matthew Mousavi and Patrick Luther represented Valore Ventures in the 1031 exchange transaction that closed at a cap rate of 3.7 percent. The buyer, a private trust, was represented by Marcus & Millichap Senior Vice President Joe Linkogle.

“We purchased the parcel in July, and now are pleased to deliver a terrific location for McDonald’s, which plans to open its doors shortly,” said Kenny De Angelis, principal of Valore Ventures. 

The quick service restaurant is optimally positioned at the intersection of Locust Avenue within a Stater Bros.-anchored shopping center along a major retail thoroughfare and minutes from downtown Fontana. 

“Valore Ventures is looking at additional single-tenant, triple-net-lease acquisition opportunities and development sites,” noted DeAngelis.

Beverly Hills-based Valore Ventures invests in operating companies, commercial real estate and the redevelopment of diverse value-add properties.

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