Newcastle Partners Plans Inland Empire Project
Newcastle Partners, a San Francisco-based real estate investment and development company, has secured $27.5 million construction financing to build a 408,997-square-foot Class A speculative industrial warehouse and distribution facility in Hesperia, Calif.
Located on 17.5 acres in the Inland Empire North market, Mesa Linda Logistics Center is slated for delivery in the first quarter of 2026.
JLL Capital Markets arranged the floating-rate, non-recourse loan through a bank. Further details on the financing were not disclosed. JLL noted the attractive terms the development secured reflected the strength of the sponsor, quality of the asset and overall health of the Inland Empire industrial market.
The team was led by Senior Managing Director Greg Brown, Director Samuel Godfrey and Associate Allie Black.
Building highlights
The industrial asset will feature 36-foot clear heights, 54 dock-high doors, 57 trailer parking stalls, 215 trailer parking spaces, an ESFR sprinkler system and 12,000 square feet of office and mezzanine space.
Mesa Linda Logistics Center will have easy access to major freeways including Interstate-15, Interstate-40, US-395, CA-18 and CA-138. The site is also located near key transportation hubs. It is 90 miles from the Ports of Los Angeles and Long Beach, 13 miles from Southern California Logistics Airport, 35 miles from Ontario International Airport and 91 miles from Los Angeles International Airport.
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Newcastle Partners, which also has an office in Coronado, Calif., focuses exclusively on West Coast gateway markets. Newcastle has completed the ground-up development of more than 10 million square feet in 45 industrial and logistics projects in the Greater Los Angeles area including the Inland Empire and Orange County. The firm has completed the acquisition and/or development of more than 63 projects totaling about 17.5 million square feet for a total investment of more than $21 billion.
Inland Empire activity
Newcastle isn’t the only company to look for industrial space in Hesperia and the Inland Empire North market. Amazon recently acquired about 200 acres in Hesperia for $161.9 million from Covington Group and plans to build a 2.5 million-square-foot warehouse, according to Bisnow. Amazon already has two facilities in Victorville, Calif., which is also part of the area known as Victor Valley or the high desert region. The high desert markets, which have more available land and are considered business-friendly, have been garnering more attention and industrial investments, the same source noted.
Don Ankeny, CEO of Westcore, a commercial real estate investment firm that acquires and operates industrial assets in highly sought-after markets, told Commercial Property Executive last year that the company had built a 1.2 million-square-foot spec warehouse in Hesperia because of lower land costs and an abundant labor supply. He said Maersk leased the facility before construction was completed.
The Inland Empire ranked as the fourth most expensive market in the nation last year, with an average price per square foot of $265, surpassed only by the Bay Area ($476 per square foot), Orange County ($319 per square foot) and Los Angeles ($297 per square foot), according to CommercialEdge data.
The Inland Empire’s industrial sector saw roughly 19.2 million square feet of space being delivered year-to-date as of September 2024. About 10.3 million square feet of space was under construction at that time as well. However, the total investment volume of $1.5 billion year-to-date as of September was less than half of the $3.8 billion invested during the same period in 2023.
Colliers reported fourth-quarter leasing activity was strong, surpassing 10 million square feet for the third quarter in a row.
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