Bixby Land Company, a Newport Beach-based real estate firm, has successfully secured a $63.9 million refinancing package for two neighboring industrial warehouses in Southern California’s Inland Empire. The financing was provided by Lincoln Financial Group and PCCP, according to public documents provided by Vizzda. The warehouses, located at 11145 & 11150 Inland Ave. in Mira Loma, were built in 1998 and offer a combined space of nearly 298,000 square feet.
Bixby is a significant player in the US industrial and logistics real estate market. This privately-held real estate investment trust focuses heavily on California, with around 9.5 million square feet of industrial space under its management. The company’s interest in the Inland Empire is understandable; the region is a powerhouse of industrial real estate, boasting over 717 million square feet of space.
However, a new Colliers report shows challenges facing the Inland Empire industrial market, especially regarding its high vacancy rate. In the first quarter of 2024, the region had a vacancy rate of 6.2 percent, up from 1.9 percent in the first quarter of 2023. This is the highest vacancy in the region since 2013, placing downward pressure on rents across the region.
The rate has also steadily climbed following a historic low of 0.3 percent in early 2022. The report showed that the vacancy rate this quarter was 431 basis points higher than in the first quarter of 2023 and nearly 600 points higher than in 2022. After a long period in the 2010s in which the western submarket’s vacancy rate was 3 to 4 percentage points higher than the eastern submarket’s, the rates have coincided since late 2021 and have risen together for the past year, according to the document. The recent spike in vacancy was triggered by both a “number of large move-outs and speculative construction delivering.”
Net absorption was in the red at the beginning of the year as well, with 2.7 million square feet of space available due to 18 new vacant blocks of space in the region, according to Colliers. Net absorption was high in the western submarket in the third quarter of 2023, with nearly 8 million square feet of positive demand, but declined significantly through 2023 and into 2024. Supply outpaced net absorption for the ninth quarter in a row. However, the report predicts a return to positive net absorption in the second quarter of 2024 due to “Amazon’s flurry of new leasing activity.”
