News Article | 4/23/2009

Lease Takes 8M-SF Center to Near Full Occupancy

SAN BERNARDINO, CA-A 141,650-square-foot lease to Interline Brands Inc. has taken Hillwood’s massive AllianceCalifornia development here to nearly 100% occupancy. According to Hillwood senior vice president John Magness, barely 100,000 square feet remain available of the 8.1 million square feet built so far at the 2,000-acre project.

The tenant, a distributor and direct marketer of maintenance, repair and operations products based in Jacksonville, FL, will take space in the 1.14-million-square-foot Westgate Building One at 300 S. Tippecanoe St. The building also houses distribution centers for Pep Boys and ODW Logistics. Interline will use the facility to distribute its Wilmar, Barnett and US Lock brand products to Southern California and other regions. The space will also have a walk-up counter for local customers.

AllianceCalifornia is a redevelopment of the former Norton Air Force Base by a joint public/private partnership. Since Fort Worth-based Hillwood was selected as master developer of the property in 2000, it has built or redeveloped more than 8.1 million square feet of logistics and light manufacturing space on both a speculative and build-to-suit basis. In addition to the companies mentioned above, tenants include TRW, GE Engines, Kohl’s, Mattel, Stater Bros., Pactiv, Medline, Kohler and Komar.

Magness attributes Hillwood’s success at achieving and maintaining such a high occupancy level partly to the presence of San Bernardino International Airport within the development’s boundaries, a location near the intersection of interstates 10 and 215 and proximity to a large intermodal rail facility. But equally important, he says, is a combination of the project’s foreign trade zone status, various tax incentives available to the project as a publicly backed redevelopment effort and comparatively low rents made possible by public ownership of the land.

“We’ve been pleasantly surprised at the level of demand,” Magness tells “These are obviously tough times, but we’re constantly talking with tenants to find out what they need and, if necessary, work things out to make sure they can stay. Most tenants are aware of all the benefits of being here, so they generally aren’t looking for alternatives.” New tenants, he adds, have tended to be companies seeking opportunities to consolidate operations at a single location.

In regard to the current deal, the Hillwood exec notes the company signed a lease with Interline at a Hillwood property in Texas in the final quarter of 2008. The same broker who represented the tenant in that transaction, John McDaniel of Mohr Partners in Dallas, handled the AllianceCalifornia negotiation as well. Peter B. McWilliams, Ruben V. Goodsell and Michael McCrary of Colliers International in Ontario, CA represented Hillwood.

Though several build-to-suit projects were completed at AllianceCalifornia last year, Magness reports there are no projects in construction or development at this time. About three million square feet of additional construction is included in the long-range plan. “We have graded two pads in anticipation of future construction,” he says. “Hopefully in the next year there will be a couple build-to-suits, but nothing is in the works.” In the meantime, he continues, several tenants have expressed interest in the remaining space, all of which is located in Westgate Building One. In addition to AllianceCalifornia, Hillwood has two other properties in San Bernardino, InterChange Business Park and North San Bernardino Industrial Park.