Duke Realty Breaks Ground on 1.2 MSF Distribution Facility

728 W. Rider St. Image courtesy of Duke Realty Corp.

Duke Realty Corp. has broken ground on a 1.2 million-square-foot speculative distribution facility in Southern California’s Inland Empire, the company’s eighth project in the submarket.

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The development, at 728 W. Rider St. in Perris, Calif., is slated for delivery in the summer of 2021. The 55.2-acre site reportedly offers convenient access to the I-215 freeway and other major interstates.

The project is being built to LEED Silver standards and will feature 40-foot clear height, level floors, 241 dock doors, 344 trailer stalls, 442 car parking spaces and four grade-level loading doors.

Nancy Shultz, senior vice president of Duke Realty’s Southern California operations, said in a prepared statement that Duke Realty has grown its Southern California footprint with more than $1 billion in development starts over the past eight years, accommodating tenants’ needs for large blocks of distribution space. She added that Duke currently has more than 14.8 million square feet of space in Southern California and a further 3.1 million square feet in the development pipeline.

According to Chris Burns, executive vice president of west and central regions at Duke Realty, about one third of the company’s leasing and development activity across the U.S. is related to e-commerce and, as the country continues to see significant increases in online retail transactions due to the pandemic, demand for more distribution space in tier one markets like Southern California is expected to remain strong.

Running cold and hot

The Inland Empire has just finished a record quarter for industrial leasing volume, as absorption hit 5.5 million square feet, according to a third-quarter report from JLL. Rents increased by 1.6 percent from the second quarter, even as 8.2 million square feet of new space (nearly 40 percent preleased) was delivered. JLL predicts a possible shortage of space, especially in large blocks, over the next 12 to 18 months, as e-commerce continues to surge.

Logistics facility activity has been brisk in the Inland Empire in recent months. In a July sale-leaseback, Latitude 36 Foods sold 98,900 square feet of cold storage space in Corona, Calif., to a joint venture of Condor Cold Storage and AEW Capital Management.

In early September, Amazon opened a 640,000-square-foot fulfillment center in Beaumont, the e-commerce behemoth’s 14th center in the Inland Empire. And at the end of September, CT Realty and PGIM Real Estate broke ground on what will eventually be a 4.4 million-square-foot logistics project in Jurupa Valley.