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4/03/15
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Tri-City Corporate Centre, a 17-building, 1.056 msf office complex in San Bernardino was acquired by a joint venture formed by Hines and funds managed by Oaktree Capital Management, L.P. in the largest office sale -- by square footage – ever recorded in the Inland Empire. The development is situated on 153 acres near the intersection of the I-10 and I-215 freeways. The price was not disclosed, although a broker we spoke with estimated the price to be over $100 mil.
Tri-City Corporate Centre is a mixed-use, master-planned business park offering a range of building styles from mid-rise, low-rise to flex with eight Class A office towers. At the time of sale, it was roughly 61 percent occupied to a variety of tenants including Northrop Grumman, Art Institute of California, Wells Fargo, CalPERS, Health Net, Fidelity Title, Parsons Brinckerhoff, TASC and Chicago Title.
In addition, the campus is entitled for more than 300k sf of new development space on four parcels of land. It also contains 390k sf of retail amenities (which were not included in the sale), including numerous restaurants, retailers, banking, and a health club and is within walking distance of the greater Tri-City retail trade area.
Features include surface parking of four spaces per 1,000 square feet, a new San Bernardino SBX rapid transit bus station, landscape setbacks and green belts with wide streets, distinctive project signage and extensive use of waterscapes throughout the campus.
CBRE’s Kevin Shannon, Brad Burton, Ken White , Michael Kendall, Michael Longo and Phil Woodford brokered the transaction on behalf of the sellers, Rancon Realty Fund IV & Rancon Realty Fund V. Rancon was the original developer of the park, which began construction in 1986 and continued development through 2008.
“This was a rare, value-add opportunity to acquire a high quality office park at a major discount to replacement cost in a Class A, master-planned environment,” said Shannon. “The unusual scale of the opportunity will afford the buyer the ability to control a significant piece of the Inland Empire office submarket which is currently enjoying a much-anticipated rebound with over 1.34 msf of net absorption since 2010. The Inland Empire has one of the fastest job growth rates in the nation which is clearly accelerating demand for office space.”
The business park has access and visibility from the I-10 and I-215 freeways. Notable buildings in the park include One Vanderbilt, Vanderbilt Plaza, Brier Corporate Center, One, Two and Three Parkside, Lakeside Tower, North River Place, One and Two Carnegie Plaza, Northcourt Plaza, and Carnegie Business Center I and II.
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