Goodyear Tire, a renowned tire company, has recently completed a sale-leaseback transaction for its 829,000-square-foot distribution facility in the Inland Empire, Southern California. The deal, valued at $68 million, has added to the growing industrial sales volume in the region. This article examines the details of the sale-leaseback and highlights the significance of the transaction in the Southern California real estate market.

What is the Sale-Leaseback Transaction?

Goodyear Tire sold its distribution facility at 17477 Nisqualli Road in Victorville for $67.5 million in a sale-leaseback arrangement. The buyer, CIRE Equity, acquired the 40-acre property and immediately leased it back to Goodyear Tire. The transaction was supported by a $40.5 million loan provided by Umpqua Bank, and the distribution center was completed in 2000, spanning an impressive 829,000 square feet.

Acquisition by CIRE Equity

The purchase of Goodyear’s distribution center was executed by CIRE Equity – a real estate investment firm. CIRE Equity has secured a long-term tenant and added a valuable asset to its portfolio by acquiring the property and leasing it back to Goodyear. This type of sale-leaseback transaction is a common strategy for companies to unlock capital tied up in real estate while maintaining operational control of the property.

Inland Empire’s Industrial Sales Volume

Despite declining industrial real estate sales across the United States in the past year, the Inland Empire region of Southern California continues to experience a robust market. As of May 31, the Inland Empire recorded $1.9 billion in industrial sales, according to a report from Commercial Edge. This report indicates the sustained activity and investor interest in the region’s industrial sector.

Southern California’s Resilient Industrial Real Estate Market

Southern California has remained resilient while facing market challenges, demonstrating its strength as a prime location for industrial real estate investments. The region’s proximity to major ports, transportation infrastructure, and a large consumer base contributes to its appeal. Investors recognize the potential for long-term growth and value in the Southern California market, driving ongoing industrial sales activity.

Strong Rent Gains in the Inland Empire

According to recent data, the Inland Empire stands out with its remarkable rent gains, leading the nation with a year-over-year increase of 17 percent. This highlights the demand for industrial space in the region, driven by e-commerce, logistics, and distribution companies seeking well-located facilities to support their operations. The attractive rental market conditions further fuel investor interest and contribute to the region’s robust industrial sales volume.

Wrap up

Goodyear Tire’s sale-leaseback transaction for its distribution center in the Inland Empire reflects the ongoing strength and investor activity in Southern California’s industrial real estate market. The acquisition by CIRE Equity highlights the appeal of sale-leaseback arrangements, enabling companies to unlock capital while maintaining operational control. 

The Inland Empire’s significant industrial sales volume and rent gains demonstrate the region’s resilience and attractiveness as a prime location for industrial investments. Southern California remains a focal point for industrial real estate opportunities as the market thrives.