By JV Capital staff
Pacific Industrial has sold the Sierra Pacific Center, a two-building, 1,495,208 square-foot, Class A+ industrial facility in Fontana, to an undisclosed institutional life insurance company. The $213.4 million sale marks the largest non-portfolio industrial transaction in California in the past 24 months.
“It was the lowest cap rate ever achieved in the Inland Empire – 3.68%,” says Jeff Chiate, executive managing director at Cushman & Wakefield’s National Industrial Advisory Group, who represented Pacific Industrial in the deal.
Sierra Pacific Center was completed in 2016 and was leased to LG Electronics and FedEx at the time of the sale. It is one of the first ground-up developments completed by Pacific Industrial, an industrial development and investment firm.
Dan Floriani, partner and co-founder of Long Beach-based Pacific Industrial says he believes the sale sends a strong signal that there remains a strong appetite for well-located, well-designed buildings.
“When smart institutional investors are willing to pay below a 4 cap for an asset, I believe it reinforces the fact that long term there is still positive momentum projected for the industrial asset class,” says Floriani.
The company developed the asset in partnership with an international institutional investor and continues to partner with institutions and pension funds on other development projects statewide.
Chiate says Southern California is the strongest industrial market in the nation and that this transaction demonstrated the strength in the industrial market.
“Rents have grown at double digits for the past couple of years with the expectations it will continue in the foreseeable future,” says Chiate.
Sierra Pacific Center is adjacent to the Route 210 Freeway and within a 20-mile radius of seven major freeways. The property is located at 5565 and 5885 Sierra Avenue.
With Opportunity Zones gaining momentum, Floriani says the company has been intrigued with the benefits of the OZ program and has looked at more than a handful of sites in these areas.
“To date, however, we have not purchased one of these properties, so we’ll have to see if that changes in the second half of the year,” says Floriani.