By Jon Peterson
The industrial market across Southern California has done well over the last few years, and an opportunity to acquire an existing asset there may be an appealing proposition for some companies. This is what Decoboard Enterprises is hoping as it was considering placing on the market for sale the 107,795 square foot industrial property it owns and occupies in San Bernardino located at 1050 West Rialto Avenue. Decoboard is hoping to sell the property for $15.5 million, or roughly $144 per square foot, according to the property’s offering document.
The listing agent on the sale is Matthews Real Estate Investment Services. Some of the members working on the transaction include Erik Manarino, associate, Dylan Haste, senior associate, Alex Desoto, associate vice president, and Kyle Matthews, broker of record.
The property can provide the new owner with an opportunity for some significant value creation in the future. This could be accomplished by increasing the rents in the property, which are considered to be well below market rates at the moment. In addition, most of the tenants in the property are on a month-to-month basis, which would provide further opportunities to find longer-term tenants.
“We think that the ideal buyer for the property would be an owner/user type that would acquire the property and take the space that the seller will be vacating once the property is sold,” Said Erik Manarino in an email to The Registry.
One unique feature of the property is that around 90 percent of the electricity costs of the asset are covered by solar power. This significantly reduces the power bill that the new owner would have to cover and provides an opportunity for higher margins on the rental revenue.
Decoboard uses its space in the property in San Bernardino as its home operation. The firm is known as a high gloss UV coating and fishery company. It occupies 63,000 square feet in the property, with the next largest tenant being Strength Equipment. This company has a lease for 25,000 square feet that does not expire until the end of February 2025. The final tenant in the property is Mr. Tire. This company has a lease for 19,795 square feet that is structured on a month-to-month basis.
1050 West Rialto was first constructed in 1961, and it is a single-building asset. The property’s total lot size is 3.71 acres.
The asset has a population base of over 381,900 living within five miles of the property. It is located just off the US Interstate 215, which sees over 142,000 cars on a daily basis and is less than four miles from the US Interstate 10 where more than 230,000 cars pass by on a daily basis.
The industrial property is located within the Inland Empire industrial sub-market, which is widely recognized as the number one industrial market in the county. According to sources that track information related to this submarket, the region currently has a record low vacancy for existing properties of 0.2 percent. Construction activity has remained strong in the region, with a projected 20.1 million square feet planned to be completed during 2023. Of this space, 42.3 percent was pre-leased.
Rents within the Inland Empire continue to escalate. They increased 98.6 percent year-over-year due to limited availability and persistently high levels of demand.
