Interchange Business Center

San Bernardino, California

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%.