National Logistics Client Finds New Home in San Bernardino
Colliers Negotiates $10M Acquisition for Rancho Logistics
A pair of Colliers International brokers, working in one of the nation’s most competitive industrial markets, have negotiated the $10 million acquisition of a major industrial property that not only met but exceeded in the both size and scope the initial requirements of their national logistics client by demonstrating why it made more financial sense to own rather than lease.
Like so many other firms that are part of Southern California’s vast supply-chain network, Rancho Logistics, which stores and distributes customized inventories for a variety of both domestic and foreign manufacturers, had outgrown its former facility in nearby Rancho Cucamonga. It also found that relentlessly rising lease rates, especially in the West Inland Empire submarket where it had long been located, might force it to relocate outside of its favored location in the Inland Empire.
Enter the Colliers team of Senior Vice President Brad Yates and Senior Associate Stefan Pastor, both of whom are based in the brokerage firm’s Ontario, California office, and whose expertise includes representation of industrial firms looking to buy and lease their facilities.
In this case, the pair went far beyond the customary responsibilities of a brokerage team in order to secure for Rancho Logistics a warehouse and distribution building in what many observers believe is the nation’s strongest, largest and most-competitive industrial market.
With vacancy rates hovering in single digits for much of the past two years in every submarket that comprises the Inland Empire, which includes a portion of Los Angeles and all of San Bernardino and Riverside counties, Yates and Pastor managed to secure a facility that exceeded in price, size and location what their client thought possible when it first retained the team.
Further, the growing logistics firm informed the Colliers team that its first choice, if possible, was to remain in the Inland Empire despite knowing there was a decided lack of supply, increasing demand, and rising costs for suitable and well-located properties. It also knew it might have to look outside its preferred market if the challenge proved too great.
“With so many logistics firms looking for space at the same time and in the same size category, both we and the client knew this was going to be a challenging assignment from the start, but it was the type of challenge we relish,” said Yates. “It was the type of assignment where we had to think outside the box in non-traditional ways in a very tradition-bound business box. It was a paradigm shift for us, to use the current lexicon, as well as for our novice client that had never owned its own warehouse and distribution facility.”
During brainstorming sessions, the pair decided to look at properties they wouldn’t normally consider if they stuck exactly to their client’s previously stated requirements. Instead of looking only at facilities in the size range their client said was necessary, Yates and Pastor started looking at refurbished and larger buildings that still fit within the acquisition cost their client was willing to pay.
What Yates and Pastor zeroed in on was a renovated structure built in 1980 that would not only meet the client’s needs, but would actually cost their client less per square foot than what had been budgeted.
“Not only did we get our client the best deal in the marketplace on a cost basis, but we found them a larger building that should help meet future growth needs as the business expands,” said Pastor. “Plus, we did everything our client asked us to do, as well as things the client didn’t know to ask us to do when acquiring a renovated building. This included such things as getting roofing contractors to inspect the roof and ceilings, having flow tests completed on the upgraded sprinkler system, getting it inspected for its structural integrity and more. Everything checked out to a tee.”
As for the client, its Director of Operations John Stigall, who spearheaded the firm’s relocation efforts, found the final price negotiated by the Colliers team to fit the growth-minded company’s property allocation budget. He also knew instinctively that by agreeing to purchase a building larger than its previous facility that was structurally sound and located in the Inland Empire, he’d have space for the firm’s anticipated expansion.
Stigall told Yates and Pastor they were “the most helpful and professional” brokers he’d ever retained. That response to their months-long assignment was “worth more than any other reward” they could receive, according to Yates. Added Pastor, “It was validation, a pat on the back from the client-side of the business and it has motivated us and given our morale a jump start.”
“Not only were they creative in the way they searched for a new location amidst the competitive market environment we were in,” said Stigall. “They were diligent in providing reports to us from contractors, inspectors, and specialists and they anticipated the questions we would have before we could ask them. They exceeded every goal we set for them.”