A Texas real estate developer plans to return to industrial use, for the first time in four decades, a site in Southern California that was the West Coast’s only steel mill before being converted to a NASCAR race track.

Plans by Hillwood Development Co. call for building up to 6.6 million square feet of logistics space, the nation's hottest property type in commercial real estate, at the more than 600-acre Auto Club Speedway site in Southern California's Inland Empire.

Hillwood and CBRE Investment Management paid more than $559 million to acquire most of the land at the speedway that opened in 1996 and ran its last race, the Production Alliance Group 300, at the two-mile oval track last Sunday.

“The heavy industrial use that it was as the Kaiser Steel plant was another era in the history of California,” Fred Cordova, CEO of Santa Monica, California-based Corion Properties, which represented the seller, NASCAR parent company International Speedway Corp., based in Daytona Beach, Florida, told Costar News. “Technology has really changed the logistics and distribution world.”

NASCAR plans to shutter the facility for its redevelopment as an industrial park but retain ownership of a 90-acre portion of the site for construction of a planned short track and truck trailer parking, Cordova said.

CBRE Investment Management this week announced that 364 acres at the site are set for a major logistics development called Speedway Commerce Center. The project is approved for up to 6.6 million square feet of logistics space.

“The availability rate for Class A (industrial) buildings larger than 500,000 square feet in the entire Inland Empire is zero percent,” Mary Lang, CBRE portfolio manager, said in a statement. “Speedway Commerce Center offers an extremely rare opportunity for us to invest in what we believe is irreplaceable real estate of scale in one of the top distribution markets in the world."

CBRE and its partners "will be able to provide brand new product in the most undersupplied size segment within this high-growth infill market," Lang added.

The Inland Empire's industrial vacancy rate of 1.2% is among the tightest in the United States. The rent growth rate of 35.4% in 2022 is also the highest in the country. Fontana in particular has a vacancy rate of 0.3% and rent growth of 36.9% over the same period, according to CBRE.

The site has access to Interstates 15 and 10 and the San Bernardino BNSF Intermodal Yard, just 45 miles from the ports of Long Beach and Los Angeles and near the dense population centers of Southern California.

The project will include 40-foot clear heights, cross-dock loading, 185-foot concrete truck courts and more than 100 acres for trailer parking.

Kaiser shuttered the steel mill in December1 983 and the site stood as an abandoned relic to an earlier age of American steel making before racing magnate Roger Penske in 1994 announced the construction of a racetrack originally called the California Speedway. The track opened in 1996 and instantly became one of the hottest sporting venues in Southern California.

Hillwood, a Dallas-based industrial developer founded by Ross Perot Jr., announced in March 2020 that NASCAR was working to sell the Fontana facility and other holdings as it seeks to find new revenue streams and better utilize its massive land holdings across the United States.

California Environmental Quality Act documents indicate that Hillwood was pursuing a project called Speedway Commerce Center on hundreds of acres at the racetrack site north in Interstate 10.

NASCAR has stated plans to potentially build a short track on the remaining portion of the land it retains at Auto Club Speedway.

NASCAR or its parent did not respond to requests to comment on the construction plans for the new short track. CBRE and Hillwood did not respond to request for comment on the development schedule for the planned Speedway Commerce Center.