Los Angeles, CA (August 17, 2017)- Circle Industrial, a real estate private equity firm, is marketing a new bulk-distribution warehouse in Southern California that’s fully occupied by an online retailer under a long-term lease.
The 474,235-square-foot Perris Circle Industrial Park #1, in the Inland Empire East submarket, is expected to attract bids of about $55 million, or $116/sf. The initial yield at that valuation is unclear, but similar properties have been commanding capitalization rates of 4-4.5%. HFF is representing Circle Industrial and its partner, Cigna Realty Investors.
TechStyle, an e-commerce fashion retailer, has a triple-net lease that runs until 2029 and includes rent bumps and renewal options.
The warehouse, which was completed this year, is on a 24-acre site at 290 Markham Street in Perris. The marketing campaign is touting its proximity to Interstate 215 and Route 60, which connect Long Beach and Los Angeles.
The high quality warehouse has modern sprinklers, 36-foot ceilings, ample dock doors and truck courts with depths of 135-310 feet.
Industrial rents have been soaring in Southern California amid tight occupancy and robust demand, much of it from e-commerce retailers. Still, asking rents for bulk-distribution properties remain 43% lower than in Los Angeles and Orange County.
The Circle partnership recently sold the adjacent 120,000-sf Perris Circle Industrial Park #2, which is fully leased to Penske, to a private investor for about $14 million, or $115/sf. Circle plans to build another 210,000-sf warehouse at the site next year.
Circle Industrial is a real estate private equity firm focused on the acquisition, development and operation of industrial properties in strategic U.S. markets. Circle Industrial is led by executives Pat Maloney and Eric Omohundro, who have been working and investing together for years at Circle Industrial and previously at Prologis (NYSE: PLD). www.circle-industrial.com