JURUPA VALLEY, CALIF. — A joint venture between CT Realty and PGIM Real Estate has broken ground on Agua Mansa Commerce Park in Jurupa Valley, a city within greater Los Angeles’ Inland Empire West submarket. The logistics hub is fully entitled for 4.4 million square feet of industrial space.
Newport Beach, Calif.-based CT Realty has undergone predevelopment on the 206-acre industrial park and plans to begin site work immediately. Newark, N.J.-based PGIM has invested in the development on behalf of institutional investors in its U.S. core plus equity fund.
Agua Mansa Commerce Park will feature three buildings spanning over 1 million square feet each. The larger buildings will have a cross-dock design with 40-foot clear heights, which are ideally suited for e-commerce users. E-commerce sales have spiked during the coronavirus pandemic and are estimated to grow by 18 percent this year, the highest year-over-year increase on record, according to eMarketer.
The Inland Empire’s network of rail systems and highways, as well as its proximity to the Port of Los Angeles and Port of Long Beach, provides tenants with access to 25 million people throughout Southern California.
Agua Mansa will also feature two 200,000-square-foot buildings with 32-foot clear heights that are designed for regional last-mile distribution purposes.
The companies are co-developing Agua Mansa on a speculative basis, which speaks to the healthy demand for Class A industrial space in Inland Empire despite recessionary concerns stemming from the COVID-19 pandemic.
The market recorded 18.2 million square feet of absorption in the first half of this year, a 20.6 percent decrease from the first half of 2019, according to Cushman & Wakefield. Still, the decline in absorption activity isn’t swaying CT Realty and PGIM from moving forward with Agua Mansa.
“Developing a project of this magnitude on a spec basis speaks volumes to the confidence we have in the overall market, the project and in this fantastic location,” says Carter Ewing, managing partner at CT Realty.
CT Realty and PGIM purchased the site from Denver-based Crestmore Development, which is managed by Viridian Partners, for an undisclosed price. Comparable sales for entitled industrial land in the broader Inland Empire have exceeded $1 million an acre, putting the value of this land above $200 million, according to CT Realty.
Darla Longo, Barbara Emmons Perrier and Dan De La Paz of CBRE represented Crestmore in the land sale. CT Realty was represented internally.
The joint venture plans to complete the shells of the first phase of buildings by next summer.
CT Realty has completed over 300 transactions valued at more than $4.7 billion since its founding 26 years ago. The company is primarily focused on the acquisition and development of Class A industrial logistics properties throughout the United States, having acquired 2,400 acres of industrial land since 2010 that will support 32 million square feet of buildings upon completion.
CT Realty’s current development pipeline includes projects in Northern and Southern California, Phoenix, Dallas-Fort Worth, Atlanta, Chicago, Indianapolis, Columbus, Ohio and New Jersey.
PGIM Real Estate’s portfolio includes $182 billion of assets under management as of June 30. The firm is part of PGIM, the $1.4 trillion global asset management business of Prudential Financial Inc.
Agua Mansa is CT’s third project with PGIM Real Estate in the past few years. The co-developers recently completed a 13-building portfolio in Southern California and are currently breaking ground on the third phase of their 3 million-square-foot Palmetto Logistics Park in metro Atlanta.
— John Nelson