Interchange Business Center
San Bernardino, California
The Opportunity: Interchange Business Center was acquired in November 2010 at an acquisition price of $30 million, in order to acquire a joint venture interest in a new institutional-quality industrial asset in the recovering Inland Empire industrial market in Southern California. At the time of the acquisition, the property was only 29% leased.
Result: The property was comprised of four buildings. One was sold in October 2012 for $7.5 million and the remaining three buildings were sold in April 2013 for $40.4 million, generating an estimated property level IRR of 22.1%.
Investment Summary
Asset Type: Industrial
Asset Size: Four buildings totaling 801,933 sf on 40.91 acres
Year of Construction: 2007
Acquired: 80% joint venture interest in November 2010
Sold: April 2013
Property Highlights
- Class A industrial complex located in San Bernardino, California
- Purchase price of $37 per square foot, approximately 60% of replacement cost
- Inland Empire market rents at 10-year lows, with net absorption of 5.9 million square feet, as of June 30, 2010—signaling the recovery under way
- Limited new supply—construction down 95% of 2005, 2006, 2007 and 2008 deliveries
Industrial Portfolio
Behringer’s consolidated assets within the industrial portfolio include the Archibald Business Center, Inland Empire Distribution Center, and Interchange Business Center. Combined, they generated a total IRR of 24.5%.