More Commercial Development Projects Coming to Riverside County
Economic recovery in Riverside County and the Inland Empire after the COVID-19 pandemic has been slower than the rest of Southern California, but recent developments and new projects are making the commercial real estate market of this region more attractive. In the old railway city of Perris, located northeast of Lake Elsinore, industrial activity has been picking up after a few months of sluggish growth, and a San Francisco developer is betting on this recovery to build a new industrial complex.
Deca Companies, a well-established developer that has completed many projects across the Golden State, is working on a project that will add 855,330 square feet of new warehouse and retail space in Perris. This is a speculative project that lacks commitments from anchors of prospective tenants, but the developer estimates that 800 new jobs will be created when the Perris Gateway project is completed. According to Travis Duncan, vice president of development operations at Deca, the project will require more than a thousand construction workers.
Thus far, the initial phase of Perris Gateway will consist of building the retail spaces, which will take 27,000 square feet near the Ramona Expressway in the Lakeview district. The retail sites have already attracted interest from potential buyers. The second phase of the project will be financed with a $135 million construction loan, and it will feature the development of warehouses and other structures for industrial tenants. When completed the Perris Gateway will offer 124 docking spaces, 308 stalls for trailers, and a traffic lane to organize truck transportation.
This Deca development will cater to prospective tenants interested in larger industrial structures, which have experienced higher demand in recent months. If you look at the vacancy numbers for the Inland Empire, you will notice that the empty warehouses are mostly smaller. Many tenants are looking for spacious buildings with thousands of square feet for assembly floors and distribution centers.
Other projects currently under construction in Riverside include the redevelopment of the Sears store previously located near the Magnolia Center district, west of the Municipal Airport. The building was demolished before the pandemic; it was the freestanding type of old Sears stores in "Main Street" commercial districts. The 17 acres left behind are being redeveloped as a mixed-use development that will add 380 residential units plus retail spaces.
According to lead developer Riverside Property Owner LLC, the project will consist of apartments and upscale townhouses in a housing complex with modern amenities such as walking trails and a dog park. An Aldi supermarket signed a commitment to open in 2027; it will be next to a structure for retail shops, restaurants, and cafes. The project seeks to alleviate the housing shortage in Riverside, where more than 10,000 new residents have moved in during the past decade. Preliminary details suggest that the architectural style of the old Sears store, which featured a mid-century modern design, will be kept with a few updates for a traditional Southern California ambiance.
Another Riverside retail redevelopment project involves the site of a former K-Mart store that was located on the corner of Arlington Avenue and Van Buren Boulevard, about 1.5 miles east of the old Sears store. A few years ago, the site was transformed into the new Citrus Landing shopping center anchored by Stater Bros. Market and a Ross Dress for Less store. Thus far, shoppers have been very pleased with what Citrus Landing has to offer. The project quickly attracted tenants such as Panda Express and Café Bottega, thus generating considerable foot traffic and attracting potential investors. Five parcels at this shopping center recently sold for $20.8 million in an off-market transaction that underscores the high demand for premium retail spaces in the Inland Empire.
Elsewhere in Riverside, the Summit Business Center was recently acquired by a real estate investing firm from El Segundo. The five-story office building is located north of the UC Riverside campus, and it features 138,700 square feet of office space. Market analysts think that such acquisitions will become more common because the office rental market of the Inland Empire is performing significantly better than the industrial segment. On the list of U.S. metro areas with the lowest office vacancy rates, the Inland Empire ranks third after Boston and Miami.