A Texas-based industrial developer and investor is revving up its engines to begin the conversion of a NASCAR racetrack in Southern California after landing $756 million in financing in a move that expands the runway for potential tenants in the Inland Empire.
Hillwood Investment Properties plans to begin the initial phase of Speedway Commerce Center in a joint partnership with a CBRE Investment Management-sponsored fund after securing about $756 million in financing. Last year, the partnership acquired the more than 600-acre Auto Club Speedway site in a $559 million deal to develop what is expected to be a 6.6 million-square-foot logistics hub upon full build-out.
The deal seemingly cropped up after Dallas-based Hillwood evaluated 13 of NASCAR's existing U.S. track sites for potential uses of its surplus land. The team is also developing more than 200 acres adjacent to NASCAR's Daytona International Speedway. Hillwood, which was founded by Texas commercial real estate mogul Ross Perot Jr., did not immediately return a media request from CoStar News seeking additional details about its partnership with NASCAR.
With the newly acquired funding, Hillwood has begun construction on the first two buildings at Speedway Commerce Center with completion scheduled in early 2025. Each building in the distribution hub is designed as a "larger-scale logistics building" with 40-foot clear heights, cross-dock loading and 185-foot concrete truck courts. More than 100 acres of the development is earmarked for excess trailer parking.
"We believe that this financing milestone is further confirmation of the market’s confidence in our strategy of developing Class A assets that will be crucial to meet occupiers’ evolving technology and operation needs,” said Mary Lang, CBRE Investment Management's head of Americas direct logistics strategies, in a statement.
“We designed the Speedway Commerce Center to specifically meet the critical need for well-located, modern logistics properties in this high demand region," Lang added.
The Inland Empire is one of the nation's top industrial markets. But it isn't immune to contracting tenant demand at a time a wave of new supply has reached completion, escalating vacancy rates. In the Inland Empire, vacancy has risen in the last seven consecutive quarters from 1.3% in mid-2022 to 6.8% in the first quarter of 2024, according to CoStar's market analytics team.
The market's vacancy rate is expected to tighten again with supply moderating through 2025, the team said.
For the Record
Eastdil Secured arranged the financing on behalf of CBRE Investment Management. CBRE's Dan de la Paz, Eloy Covarrubias and Barbara Perrier have been hired to oversee the project's leasing efforts.