BEAUMONT, CALIF., October 3, 2022 —JLL announced today that USAA Real Estate and McDonald Property Group has broken ground on a 1.8-million-square-foot distribution center for United Legwear & Apparel Company, LLC (ULAC) in Beaumont, California. ULAC specializes in legwear, bodywear, apparel, and accessories for men, women and children, maintaining nearly a dozen highly recognized licensed brands such as Hurley, Champion, Fortnite, Van Heusen, Skechers, and a joint venture partnership with PUMA North America. Completion of the facility is scheduled for December 2024.
City of Beaumont officials and departments heads along with executives from USAA Real Estate, McDonald Property Group, ULAC, JLL, CBRE, HPA Architecture and Fullmer Construction Company participated at a groundbreaking ceremony on September 28. The architect of record, HPA, Inc. has designed this significant project.
“HPA is well known throughout the entire Inland Empire region for its long-standing expertise in designing large industrial logistics facilities and ownership specifically selected HPA for this reason,” said Bruce McDonald of McDonald Property Group.
The building, located at Phase II of the Crossroads Logistics Center, a master-planned project at the intersection of Interstate 10 and Hwy. 60, will be used to accommodate ULAC’s global design/manufacturing, marketing, sales, and distribution. It will contain assembly, racking, and state-of-the-art material handling conveyor automation systems and includes approximately 30,000 SF of office space. This one-half mile long building will be distinguished as one of the largest known industrial buildings in the entire Southern California region.
“This groundbreaking is a key milestone for the continued growth of United Legwear & Apparel Company in the United States,” said Chris Volpe, chief operating and financial officer of ULAC. “This amazing facility will be a catalyst to our commitment to our customers and the community for years to come.”
Luke McDaniel, Cameron Driscoll, Jeff Bellitti, and Mac Hewett of JLL represented United Legwear. David Consani, Jim Koenig, Darla Longo, Barbara Emmons of CBRE and Rick John of Daum represented McDonald Property Group and USAA Real Estate in the lease transaction which was signed in July 2022. The architecture firm of record is HPA Architecture, and the general contractor is Fullmer Construction Company.
This new ULAC massive structure is positioned on 85 acres known as Phase II of the Crossroads Logistics Center, a master-planned project at the intersection of Interstate 10 and Hwy. 60, which also includes an under construction 816,000 SF build to suit facility. Wolverine Worldwide’s fulfillment center and another build to suit fulfillment facility were both recently developed as Phase I of Crossroads in 2017 and 2020 by the USAA Real Estate and McDonald team. A new Highway 60 freeway interchange overpass benefits and provides additional access for the project near the east entrance. The property is 78 miles from the Port of Los Angeles, proximate to railways and the new FedEx Ground sorting and distribution center in Palm Springs, making it accessible to various intermodal transportation routes.
ABOUT UNITED LEGWEAR & APPAREL COMPANY
Founded in 1998 by Isaac E. Ash, United Legwear & Apparel Co., (ULAC) is a New York based global design/manufacturing, marketing, sales and distribution company specializing in legwear, bodywear, apparel, and accessories for men, women and children. ULAC maintains nearly a dozen highly recognized licensed brands such as Hurley and Champion and is a joint venture partner to PUMA North America. For more information visit www.unitedlegwear.com
ABOUT MCDONALD PROPERTY GROUP
McDonald Property Group is an industrial development company that develops large scale industrial projects, both in joint ventures with institutional capital partners and on behalf of REITs in a non-partnership capacity. The company was formed in 2013 by Bruce McDonald, an established Southern California industrial developer who has developed over twelve million square feet of industrial space both as McDonald Property Group and previously as co-founder of Master Development Corporation from 1995-2010. McDonald is experienced in providing development services to many institutional capital partner relationships, having recently worked with USAA Real Estate, First Industrial Property Trust, Black Creek Group, State Teachers System of Ohio, and USAA. McDonald Property Group is a licensed general contractor and real estate broker and currently manages six million square feet of industrial property through its property management affiliate. For more information, visit www.mcdonaldpropertygroup.com.
ABOUT USAA REAL ESTATE
Along with its affiliate companies, USAA Real Estate invests across the risk spectrum for a global client base, managing over $36 billion in net assets under management within a diversified portfolio across North America and Europe. USAA Real Estate provides strategic equity and debt capital, including to capitalize on the accelerating demand for technology-driven real estate assets, to meet the critical need for housing solutions, and for other market and capital structure opportunities exhibiting compelling risk-return characteristics.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 102,000 as of June 30, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.
Industrial developer McDonald Property Group of Newport Beach has landed a long-term deal to develop and oversee a large new project next to the city of Ontario’s airport.
The Ontario International Airport Authority (OIAA) Commission last month announced that a venture between McDonald Property and frequent financial partner USAA Real Estate Co. of San Antonio had been selected to redevelop a 198-acre vacant parcel, designated as surplus property, to the immediate east of the airport.
The venture beat out 17 other interested parties to win the business, according to the OIAA.
The city will continue to control the land, and the JV will operate the site under a ground lease that will run 55 years, according to a statement from the OIAA.
The size and scope of the industrial project hasn’t been disclosed. Local reports suggest that portions of the land will need to be set aside to accommodate environmental issues like a rare burrowing owl that nests in the area.
The deal will generate approximately $275 million over the first 10 years of the ground lease, the airport agency said.
The deal calls for a non-refundable $10 million deposit to OIAA. After allowing time for the JV between McDonald and USAA to obtain local jurisdictional entitlement and environmental approvals, rental revenue to the OIAA will start at $25 million in the first year, increasing in five-year increments. Revenues generated by the project will be used for airport purposes.
Revenue of $90.6 million per year is expected in the final five years of the long-term lease.
The deal marks “the first of several major real estate transactions to monetize vacant property since the airport was transferred to local control in November 2016,” Alan Wapner, mayor pro tem of the City of Ontario and president of the OIAA Board of Commissioners, said in a statement.
McDonald Property Group, led by founder Bruce McDonald, has built numerous industrial projects in and around Ontario, often with USAA as a partner.
In the city, it has developed over 4 million square feet on 250 acres. Notable projects there include Thoroughbred Business Park, its “signature master planned 2 million square feet, 11-building park.”
“Given our long track record of success with McDonald, it is our vision that the Ontario International Airport project will continue in that tradition and become one of the most prominent industrial/logistics developments in the region,” Steven Ames, Managing Director-Investments of USAA, said in a statement.
USAA has about $30 billion of assets under management.
Bruce McDonald was previously president of Newport Beach’s Master Development Corp., and after that served as managing director and head of U.S. investments for Australia’s Dexus Property Group.
Amazon has opened its 20th fulfillment center in Southern California’s Inland Empire, one of the nation’s largest shipping and logistics hubs, as the company speeds up hiring, leasing and construction to meet accelerated shipping demand during the coronavirus pandemic.
The warehouse in Beaumont, California, began construction in late 2018 as what was at the time Amazon’s 14th distribution center in the Inland Empire, which has become the Seattle-based ecommerce company’s largest concentration of distribution facilities outside of greater New York City.
“Eight years ago, Amazon had zero square feet in the Inland Empire. Now they have 17 million or 18 million square feet and still growing,” said Dave Burback, senior vice president and managing director at brokerage Kidder Mathews in Ontario, California, who is not involved with the retailer, in an interview with CoStar News.
Amazon and landlord USAA Real Estate did not return requests from CoStar News.
Inland Empire’s proximity to the Ports of Los Angeles and Long Beach and a consumer base of more than 20 million people in Southern California alone have helped to make it one of the top locations in the country for logistics firms to expand, according to CoStar. Desire for industrial space in the area have pushed rental rates up roughly 5% in the past 12 months.
Amazon is now listed as a tenant in 20 fulfillment, sortation and delivery station buildings in the Inland Empire, including four in San Bernardino and two each in Riverside, Redlands, Eastvale and Rialto, according to CoStar tenant data. Its portfolio in the area spans roughly 17.6 million square feet, according to CoStar.
Amazon began accelerating construction of logistics and fulfillment centers after making one-day shipping available to Amazon Prime members in June 2019, well before the coronavirus pandemic. According to CoStar data, Amazon has signed at least 135 new leases totaling nearly 55 million square feet of predominantly distribution and fulfillment space around the United States since Jan. 1.
Spikes in demand for online shopping for food, basic household goods and other items have fueled more leasing activity by Amazon and other e-commerce companies since the pandemic forced many stores and other businesses to close and people to stay home in March.
“Annual e-commerce growth that averaged 12% to 15% spiked to between 20% to 25% almost overnight when the pandemic started in March,” said Burback.
Amazon’s new Inland Empire building, owned by San Antonio, Texas-based USAA Real Estate, covers 44.5 acres and contains four 640,000-square-foot floors totaling 2.56 million square feet, according to CoStar information.
More than 1,000 full time employees work at the facility, Crossroads Logistics Center at 1010 W. Fourth St. near the merging of Interstate 10 and State Route 60, where Amazon continues to hire more workers.
Amazon said on the same day as the opening that it would host a virtual job fair on Sept. 16 to fill 33,000 new corporate and technology jobs aboard around the United States, its largest number of new openings at one time.
With its expanding fulfillment network, Amazon has been able to shift its U.S. growth into overdrive and benefit at the expense of traditional brick-and-mortar retailers when the pandemic started in March, Burback said.
“We’re seeing it play out,” he said. “There’s a bankruptcy in retail every week.”
Amazon’s plan to build out its own delivery network is beginning to pay dividends as the surge in demand has overwhelmed FedEx and United Parcel Service, forcing the shipping giants to raise rates, Juan Arias, a senior consultant with CoStar Advisory Services in Boston, said in a new assessment of commercial real estate demand six months into the pandemic.
“Amazon is increasing its distribution network by 50% this year, adding 60 million square feet of fulfillment space, a record for this e-commerce giant,” Arias said in a video.
The company added 175,000 people to its payroll during spring and early summer, a 33% bump in headcount, and has since added another 35,000 workers and now has a global workforce of 875,000.
In the United States, Amazon has more than 600,000 full- and part-time employees across more than 40 states at two headquarters, 18 tech hubs, more than 150 fulfillment, sortation and delivery stations, and more than two dozen Amazon Go, 4 Star and Amazon Books retail stores, the company said in a release.
The company spent $15.4 billion on property and equipment in the first quarter. Despite the investment, Amazon executives said in late July the company was running out of space and would have to increase its footprint by at least half to keep up with pandemic-fueled shipping demand.
Wolverine Worldwide, a leading global footwear and apparel company with a portfolio of brands that include, Merrell®, Sperry®, Hush Puppies®, Saucony® and Wolverine®, announced a 720,000 square-foot lease at the Crossroads Logistics Center in Beaumont, a city situated in California’s Inland Empire.
The site will serve as a national distribution center for Wolverine and will support the company’s fast-growing e-commerce business. The Michigan-based company chose Beaumont for their new facility over locations in Utah, Nevada, Arizona and Northern California.
“Wolverine Worldwide is committed to delivering exceptional product to our consumers,” said Jeff Gorski, vice president of global distribution and logistics for Wolverine Worldwide. “This new facility will allow us to cut 14 days off delivery time to our consumers and deliver product faster than we have ever done before. We are excited to be positioned in the vibrant community of Beaumont and are looking forward to enriching the community with job opportunities and a positive economic impact.”
The master-planned project, owned by an affiliate of USAA Real Estate Company (“USAA RealCo”) and developed in partnership with McDonald Property Group, is currently under construction and scheduled for completion in June 2017. The initial development will include the installation of automated material handling equipment./p>
“We are building a state-of-the art facility that well exceeds the typical industrial/logistics product in the market,” said Lange Allen, Executive Director for U.S. industrial/logistics development at USSA RealCo. “It will feature 40’clear height, 7” Ductilcrete floors, LED interior lighting, and fully climate-controlled interior. We are excited Wolverine chose this site and to partner with us on such an important project.”
Adds Len O’Donnell, president and chief executive officer of USAA Real Estate Company, “Crossroads Logistics Center is yet another milestone in our long and successful relationship with McDonald Property Group, consistent with our strategy of investing in partnership with best in class developers. We are pleased and honored to add Wolverine Worldwide to the list of prestigious companies we have been able to serve throughout our global industrial and logistics portfolio and we look forward to a long and successful relationship.”
The current 720,000 square foot lease, will allow Wolverine the ability to expand its footprint to 1.3 million square feet in the future. The development is strategically located in the East Inland Empire at the intersection of the 60 and I-10 freeways and sits between two active ground FedEx facilities. The site features 2,800 feet of freeway frontage.
In addition to the Wolverine Worldwide facility, Crossroads Logistics Center is fully entitled for two additional buildings totaling another 1.3 million square feet, at which point the master-planned park would encompass 2.6 million square feet.
CBRE’s Darla Longo, Barbara Emmons and Joey Sugar represented McDonald Property Group and USEF I Crossroads LLC, an affiliate of USAA RealCo, in the deal. Raymond Walker of Walker Company represented Wolverine.
“Many parts of the Inland Empire are starting to look very much like an infill market,” said Longo. “The region is mirroring vacancy rates of submarkets farther west, such as Orange County and parts of Central Los Angeles. The need for logistics and warehouse space is the greatest it’s ever been. New facilities such as the Crossroads Logistics Center are in high demand because of that.”
The rapid growth of e-commerce has fueled development of warehouses and distribution centers in the 12 primary U.S. inland-port markets at nearly twice the national rate, with the Inland Empire leading the pack, according to a CBRE report. The Inland Empire’s robust infrastructure and its close proximity to two major West Coast ports and the Greater Los Angeles area’s more than 13 million people has been driving record demand for space.
Beaumont has greatly benefitted from this boom. The city provides a healthy blend of high and low-density residential developments, coupled with an increasing mix of commercial, retail and industrial activity, according to CBRE research.
ABOUT CBRE GROUP, INC.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
ABOUT WOLVERINE WORLDWIDE
With a commitment to service and product excellence, Wolverine World Wide, Inc. is one of the world’s leading marketers of branded casual, active lifestyle, work, outdoor sport, athletic, children’s and uniform footwear and apparel. The Company’s portfolio of highly recognized brands includes: Merrell®, Sperry®, Hush Puppies®, Saucony®, Wolverine®, Keds®, Stride Rite®, Sebago®, Chaco®, Bates®, and HYTEST®. The Company also is the global footwear licensee of the popular brands Cat® and Harley-Davidson®. The Company’s products are carried by leading retailers in the U.S. and globally in approximately 200 countries and territories. For additional information, please visit our website, wolverineworldwide.com
ABOUT USAA REAL ESTATE
USAA Real Estate Company, with over $17 billion in assets under management, provides co-investment, acquisition, build-to-suit and development services for corporate and institutional investors and arranges commercial mortgage loans on behalf of affiliates. The portfolio consists of office, industrial/logistics, multi-family, retail and hotel properties. USAA Real Estate Company is a subsidiary of USAA, a leading financial services company, serving military families since 1922. For more information, visit www.usrealco.com.
ABOUT MCDONALD PROPERTY GROUP
McDonald Property Group is an industrial development company that develops large scale industrial projects both in joint ventures with institutional capital partners and on behalf of REITs in a non-partnership capacity. The company was formed in 2013 by Bruce McDonald, an established Southern California industrial developer who developed seven million square feet of industrial space as co-founder of Master Development Corporation from 1995-2010. McDonald is experienced in providing development services to institutional capital partner relationships, having worked with USAA Real Estate Company, First Industrial Property Trust, State Teachers System of Ohio, Blackrock, Buchanan Street Partners, G.E. Capital, Cigna and Lincoln National Life. McDonald Property Group is a licensed general contractor and real estate broker, and currently manages two million square feet of industrial property through its property management affiliate. McDonald recently completed a speculative industrial park consisting of 3 buildings totally 237,000 SF in Oceanside, San Diego for First Industrial Property Trust, which was fully leased upon completion and is currently underway with another 25-acre industrial development project located in Oceanside at Pacific Coast Business Park with Industrial Property Trust. www.mcdonaldpropertygroup.com
$25.7 Million Acquisition in Oceanside, Calif. of land and buildings by Industrial Property Trust
McDonald Property Group, an industrial development company headquartered in Newport Beach, Calif., has entered into a development agreement with an affiliate of Industrial Property Trust, Inc. (“IPT”) to develop approximately 25 acres of land in Pacific Coast Business Park into a four-building, 396,220-square-foot industrial park in Oceanside, Calif. called Pacific Coast Collection.
On October 7, 2016, IPT, an industrial real estate investment trust that owns and operates distribution warehouses throughout the United States, acquired, either directly or through its affiliates, 3 existing buildings totaling 73,747 SF and approximately 25 acres of land from BRE Pacific Coast Business Park Owner LLC, an affiliate of Blackstone, for $25,700,000.
“On the heels of McDonald Property Group’s recent successful completion in early 2016 of a similar project in Oceanside we are pleased to retain McDonald’s development expertise in this market. Also, this land acquisition represents a very strategic investment for IPT of limited industrial zoned land in the North San Diego County market,” said JR Wetzel, Managing Director of Western Region of IPT.
“We’re pleased to be developing this project for IPT and we have every expectation that it will meet with excellent timing in the North San Diego County Market,” said Bruce McDonald, principal and founder of McDonald Property Group.
IPT is focused on acquiring, developing, and managing high-quality distribution warehouses that are leased to corporate customers. IPT’s core strategy is to build a national industrial property operating platform by targeting markets that have high barriers to entry, proximity to a large demographic base, and/or access to major distribution hubs.
The Pacific Coast Collection represents the second development in Oceanside for McDonald Property Group, a company formed by Bruce McDonald in 2013. An established Southern California industrial developer, McDonald was previously co-founder of Master Development Corporation and U.S. managing director for DEXUS Property Group. Bruce McDonald’s previous industrial developments in San Diego County include FIRST Park @ Ocean Ranch and North County Corporate Center in Vista, a 493,000-square-foot industrial complex that recently sold last year for $57 million.
The Pacific Coast Collection project is located in the premier master planned 120 acre business park called Pacific Coast Business Park. Nearby is home to Coca Cola, Taylor Made, Suja and Genentech, and it is directly across the street from the newly built regional ground FedEx facility. The project is located off the I-5 freeway at Oceanside Boulevard between College Blvd and Avenida Del Oro.
“This is an opportunity to develop high quality industrial space in a market that has shown continual net absorption improvement over the past 14 quarters and where there is virtually no buildable land,” added McDonald.
The project is anticipated to consist of four light warehouse manufacturing buildings along Rocky Point Drive that measure approximately 110,190 square feet, 51,360 square feet, 125,310 square feet and 109,360 square feet. The buildings can accommodate up to 2 users in varying sizes with target tenant sizes in the 50,000- to 100,000-square-foot range and is anticipated to be delivered in early 2018.
The Seller and Buyer were represented by Louay Alsadek and Hunter Rowe of CBRE, respectively, while Buyer’s leasing of the project will be handled by Greg Lewis and Adam Molnar of CBRE.
By Nellie Day
SAN DIEGO – McDonald Property Group and an entity owned by First Industrial Realty Trust have announced plans to develop La Pacifica II, a 237,275-square-foot industrial park in Oceanside. The $26-million project will be the first speculative industrial construction to occur in North San Diego since 2008, according to the developers.
The three-building project will be located on a 15.8-acre site within the master-planned Ocean Ranch business park. It will be situate off Interstate 5 and Oceanside Boulevard.
Ocean Ranch is also home to Coca Cola, Taylor Made and Genentech, among others. US Foods and FedEx will soon occupy space within the immediate area as well.
The new project will feature three light warehouse manufacturing buildings that contain 108,413 square feet, 63,262 square feet and 65,600 square feet.
This will be the first development project for McDonald Property Group, a company formed by Bruce McDonald in 2013.
First Industrial Financing Partnership acquired the fully improved and entitled site from La Pacifica 2-Ocean Ranch LLC, an entity owned by Cruzan Monroe Investments, this past September for $9.6 million.
La Pacifica 2-Ocean Ranch was represented by Aric Stark and Dennis Visser of Cassidy Turley in the sales transaction. The land was sourced by SR Commercial on behalf of McDonald Property Group. Transaction capital was arranged for McDonald by Rick Putnam of Colliers International.
By Lou Hirsh
It’s not the start of any expected boom, but three North County cities are now witnessing what has been a nearly nonexistent sight in the region for the past six years: speculative construction of industrial projects.
Suppressed production demand caused by the recession, limited land availability in the most sought-after locations, and a still-tough construction financing climate have made spec commercial building of any kind rare throughout San Diego County for the past half-decade.
But a slow thaw is in the works, witnessed by projects such as developer McDonald Property Group’s recently announced $26 million, three-building industrial campus planned for a 15.8-acre site in Oceanside’s Ocean Ranch business park.
Another speculative industrial project in Vista was announced earlier this year by development and investment firm SR Commercial, and Burke Development is expected to break ground by year’s end on a spec industrial building in Carlsbad.
“It’s mostly about limited supply and pent-up demand,” said Bruce McDonald, founder and principal of Newport Beach-based McDonald Property Group, who in previous jobs has overseen more than 30 spec industrial projects in San Diego County during the past 15 years.
McDonald said several factors encouraged his company to enter into a development partnership with an entity owned by Chicago-based First Industrial Realty Trust, which acquired the Oceanside land for approximately $9.6 million. The real estate investment trust will take ownership of the 237,275-square foot La Pacifica II campus upon completion.
The developer noted that North County has registered positive net absorption — more space being occupied than vacated — for the past 12 consecutive quarters, as its industrial vacancy rate fell to 7.8 percent.
Drilling down further on the data, McDonald said he found that the vacancy rate for space in the 10,000 to 50,000-square-foot range — the category recently seeing the most leasing activity in North County — was even lower, at 4.7 percent.
While still below the peak of around 78 cents per square foot seen in 2006, he said North County industrial rents have recently been rising and are currently averaging round 65 cents per square foot, indicating there’s still some room for growth.
Following the geography of North County industrial development, McDonald noted that Vista for the past several years benefited from available space filling up in Carlsbad. With Vista industrial space being built out and occupied, the improving economy is now sending companies farther north to find space.
“It’s Oceanside’s turn right now,” said the developer, noting that his company’s new project will be the first speculative industrial development in that city since 2008.
Landlords in Oceanside have seen their position steadily improve in the past few years as large tenants across several industries have set up or expanded operations, including Coca-Cola, Genentech, US Foods and FedEx.
McDonald said development is also being aided by a rising number of institutional investors, such as real estate investment trusts, that now view the San Diego County industrial market as a viable venue for their cash. For many years, those investors have focused on larger “gateway” markets like Los Angeles and the San Francisco Bay Area, but deal opportunities in those markets have dwindled as competition and pricing have risen.
Pre-leasing of space and build-to-suit development for specific tenants have been predominant in North County and elsewhere in San Diego County for the past several years. Experts said the spec trend is showing up in North County in part because central San Diego has run out of industrial land to build new projects, sending many types of industry northward to locate suitable facility space.
Observers said there are several factors that will keep local speculative building at a low to moderate pace for the foreseeable future, including lingering challenges for industrial development. Those include rising construction and land costs, more stringent statewide standards for buildings’ energy efficiency, and squeamishness among most lenders to fund projects in which tenants aren’t lined up in advance.
“It’s still a challenge to make these projects pencil out,” said CJ Stos, co-founder and principal at SR Commercial in Solana Beach.
SR Commercial has recently made several acquisitions of existing industrial buildings throughout San Diego County, and Stos said the company is bullish on prospects for those as well as a speculative development that the company announced earlier this year in Vista.
The company is in the process of finalizing entitlements for a 30,000-square-foot distribution center project, on a 1.43 acre parcel that SR Commercial acquired in March as part of a larger Vista portfolio. SR Commercial said the development will be Vista’s first speculative industrial project in three years.
Much of the construction in Carlsbad in recent years was focused on research and development facilities, rather than industrial warehouse and manufacturing buildings, but that is slowly changing in the current climate as the general economy and industrial property fundamentals improve.
Bob Willingham, director in the Carlsbad office of brokerage company Cushman & Wakefield Inc., represented Burke Development of Costa Mesa in its acquisition last year of a five-acre parcel at Carlsbad Raceway Business Park.
He said the developer is expected within the next 60 days to break ground on a planned 80,000-square-foot building that will house one or two warehousing or other industrial-related tenants, and is confident about filling the spaces soon in the current climate.
Willingham said there hasn’t been any major speculative industrial construction in Carlsbad since 2007 or 2008. The future of spec in that city and elsewhere, he said, will likely be decided by factors including continued rent growth, demand for specific locations and the financial backing that developers have for their projects before moving forward.
“Spec development is going to stay pretty limited,” Willingham said. “It’s still hard to get financing for spec and still tough to get those projects underwritten.”
By David Phillips
OCEANSIDE, CA—McDonald Property Group, an industrial development company headquartered in Newport Beach, CA, has formed a development agreement with an entity owned by First Industrial Realty Trust to develop La Pacifica II, a three-building, 237,275-square-foot industrial park.
“We’re pleased to be developing this project for First Industrial and we have every expectation that it will meet with success in the North San Diego County Market,” said Bruce McDonald, principal and founder of McDonald Property Group.
First Industrial Realty Trust is a publically traded REIT and is a leading owner, operator, and developer of industrial real estate with 66 million square feet of industrial properties under management nationwide. Ryan McClean, West Coast market leader, Larry Cochrun, director of development, and Jerry Devon, market leasing director, will lead the First Industrial Los Angeles team on this project, along with McDonald Property Group.
The $26 million project represents the inaugural development for McDonald Property Group, a company formed by Bruce McDonald in 2013. An established Southern California industrial developer, McDonald was previously co-founder of Master Development Corporation and U.S. managing director for DEXUS Property Group. Bruce McDonald’s previous industrial developments in San Diego County include North County Corporate Center in Vista, a 493,000-square-foot industrial complex that recently sold for $57 million.
The project is located in the master planned Ocean Ranch business park on a 15.8-acre site that represents the last industrial parcel larger than 10 acres in North San Diego County. Ocean Ranch is a premier industrial location in North San Diego County and is home to Coca Cola, Taylor Made and Genentech, among others. Newly planned facilities for US Foods and FedEx are located nearby. The project is located off the I-5 freeway at Oceanside Boulevard.
“This is an opportunity to develop high quality industrial space in a market that has shown continual net absorption improvement over the past 10 quarters and where there is virtually no buildable land,” added McDonald. “This is the first spec industrial development in the market in six years.”
The project will consist of three light warehouse manufacturing buildings that measure 108,413 square feet, 63,262 square feet and 65,600 square feet. The buildings can accommodate single users or up to 12 tenants in varying sizes with target tenant sizes in the 20,000- to 40,000-square-foot range.
First Industrial Financing Partnership, LP acquired the fully-improved and entitled site in September 2014 for $9,635,000 ($14.00 per square foot) from La Pacifica 2-Ocean Ranch LLC, an entity owned by Cruzan Monroe Investments in Del Mar, CA. The seller was represented by Aric Stark and Dennis Visser of Cassidy Turley, while SR Commercial sourced the land for McDonald Property Group. Also, Rick Putnam of Colliers International arranged transaction capital for McDonald.
McDonald Property Group is an industrial development company that develops large scale industrial projects both in joint ventures with institutional capital partners and on behalf of REITs in a non-partnership capacity. The company was formed in 2013 by Bruce McDonald.