Irvine, CA (September 7, 2021) — Newmark Knight Frank (“Newmark”) announces it has arranged a 164,975-square-foot lease renewal and 25,350-square-foot expansion on behalf of cold storage provider, DSW Distribution Center, Inc., at two adjacent facilities in Rancho Cucamonga, California.
Newmark Senior Managing Directors Matt Moore and Wes Hunnicutt represented the tenant, DSW Distribution Center, Inc. The landlord is UBS Realty Investors, LLC.
“DSW has occupied its corporate headquarters space for nearly 30 years and has invested significant capital into the facility to continually enhance its cold storage capabilities and meet the ever-growing need of their diverse customer base,” said Moore. “When the adjacent facility became available across the street, it was an easy decision for DSW to expand.”
DSW President and CEO, Brad Thayer stated, “Due to very high demand for cold and air-conditioned supply chain services, we invested into converting our ambient space to temp-controlled and then added the new facility across the street for dry space needs.”
DSW renewed its lease at the Lincoln Distribution Center, located at 8858 Rochester Avenue, which serves as its headquarters facility, and provides the storage and distribution of food grade and pharmaceutical grade products. DSW also expanded into a new facility across the street, located at 8675 Rochester Ave.
Cold storage facilities have historically performed well during economic downturns, with the grocery sector being the main occupier of cold storage space. It is not only grocery chains that require cold storage facilities; medical and pharmaceutical research companies, whose importance is highlighted during a pandemic, depend on a climate-controlled environment to protect clinical studies and the development and distribution of therapeutic treatments.
Cold storage warehouse development has been steady, with the delivery of approximately 24 million square feet of new inventory in each decade since the 1990s, according to Newmark Research. Notably, more than two-thirds of the new inventory from the 2010s was delivered after 2015, with approximately 15 million square feet completed in the past five years; Illinois, California, and Texas have led the nation in development during that period.
The industrial sector was already experiencing a shift in supply chain activity prior to COVID-19, and e-commerce increased the need for technological advancements in order to meet the growing demand for last-mile distribution. The Inland Empire industrial market’s experienced robust leasing activity from the last nine months of 2020, carried over into early 2021, according to Newmark Research. The vacancy rate hit a record low of 2.4 percent in 1Q21, with the asking rent notching a new high of $0.73. Construction activity was up 36.2 percent from year-end 2020.
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