By Kelsi Maree Borland, Globe Street
The dual acquisition is part of the firm’s strategy to expand its portfolio in California.
Dalfen Industrial has acquired two industrial properties in California, part of its strategy to expand exposure to the California market. The firm acquired Otay West Logistics Center in Otay Mesa, a suburb of San Diego, and Stockton Supply Chain Center III in Stockton. With these acquisitions, Dalfen Industrial has acquired seven properties throughout the state.
Located at 6800 Gateway Park, the Otay West Logistics Center is a 62,875-square-foot building featuring 24-foot clear heights, a 170-foot truck court, 15 dock-high doors, 4 drive-in doors and ample parking. It is 100% leased to DHL.
Located at 2230-2248 Stagecoach Rd., the Stockton Supply Chain Center III is a two-building, 121,280-square-foot property that is fully leased to multiple tenants, most notably Fairview Distribution. The property is located near Hwy 99 and I-5, the Port of Stockton and Stockton Metropolitan Airport in the East Bay, where Dalfen has a total of five industrial properties.
It isn’t surprising that Dalfen Industrial is looking to expand in the state. California has one of the top performing industrial markets in the country, and major industrial hubs continued to post strong rent growth and demand for space. As a result, industrial leasing activity is expected to increase over the next two years. A recent report from NAIOP predicts that industrial absorption nationally in 2022 will be 401.4 million square feet with a quarterly average of 100.4 million square feet. In 2023, the projected net absorption is 334.1 million square feet with a quarterly average of 83.5 million square feet. Southern California is predicted to be among the top markets during this period.
Industrial development is pushing east to accommodate the fervent demand. In Southern California’s Inland Empire, new warehouse development is expanding in the eastern half of the region, which spans Riverside and San Bernardino counties from the Los Angeles city limits to the Arizona border. CBRE is projecting that industrial warehouse tenants who plan to renew five-year leases or move to another space in Inland Empire will be confronted with the third-largest rent increase in a US market this year, boosting Inland Empire’s current average of $6.75/square foot to $10.92/square foot.