News Article | 2/19/2010

Vacuum cleaner maker finds cheap lease in San Bernardino


Vacuum cleaner maker Royal Appliance Manufacturing is relocating its Ontario distribution operations to a larger facility in San Bernardino.


Its new landlord says the move reflects a trend of growing companies seeking out more favorable business terms in a buyer’s market for industrial space.


Royal will begin operations in early May in a newly constructed building purchased in December by Hillwood Investment Properties. According to statements from Hillwood and CB Richard Ellis, Royal has signed a five-year lease for a 415,000-square-foot space at Hillwood’s Alliance California industrial development, built on land that once housed Norton Air Force Base.


Officials of Ohio-based Royal, whose brands include Hoover and Dirt Devil, could not immediately be reached for comment. Financial terms were not disclosed for the deal that will bring Royal to the space at 925 Ninth St.


John Magness, a Hillwood senior vice president, said by phone the new location will give Royal about 65,000 more square feet than it had in Ontario, and it will be paying less for rent, taxes and other overhead. The building is also located in a state-sponsored county enterprise zone that gives tax credits for future job creation.


Magness said the current economy has prompted many companies to shop around for space before renewing leases, and Hillwood has received more inquiries about its properties this quarter “than the past three quarters combined.”


In December, Hillwood also purchased another building in the same vicinity, with more than 600,000 square feet of space. At the time, Magness said that because Hillwood got a favorable price for the buildings, it is able to offer lower rents to potential tenants.


Hillwood is a division of Dallas-based Perot Companies. It is the primary commercial developer of land on the outskirts of what is now known as San Bernardino International Airport.