The Inland Company Inc. - Land Brokerage

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The Inland Company announces merger with Sperry Van Ness - Mimi Song Realty Group

The Inland Company, Inc. is proud to announce its merger with Sperry Van Ness – Mimi Song Realty Group, Inc (Click here for website). As part of the move, Inland Company principals John Reeder, David King, and Mark Wemette will join Mimi Song Realty Group, where John Reeder will become Chief Operating Officer. The merger represents a move by both companies to address ever changing market conditions where success in the brokerage field requires a deep and talented team of professionals committed to client success. Transaction volume continues to be low in the sector as a whole, and the move to combine the two companies is done with the purpose of consolidating members into a single team of passionate land investment professionals.

About the Companies

Mimi Song Realty Group, Inc.

Mimi Song was recently honored with the award of Broker of the Year for 2007 by Sperry Van Ness in recognition for being the top producing broker in the nation for the fourth consecutive year. She has been a land and investment specialist in the High Desert – Victor Valley area for years. The success of the Mimi Song Realty Group brand is built upon an industry leading client network that includes investors seeking all forms of real estate investments. Strategically located in the High Desert – Victor Valley, the firm aims to leverage the increasing share of growth that the local market is seeing. Homebuyers have recognized the relative affordability that the area provides, retailers have followed the strength of this growth, and industrial developers are noticing the existing infrastructure which naturally supports logistics development. “The addition of the Inland Company has several key advantages for our business,” said Mimi Song, CEO of Mimi Song Realty Group. “John Reeder’s experience in entitlement, development, and leading his own company fortifies our infrastructure in a way that is difficult to find in a single individual. We look forward to adjusting our strategies with the goal of capturing more market share and hope that this move will allow us to build upon the success that has made us #1 in the Sperry Van Ness network for four straight years.”

The Inland Company, Inc.

The Inland Company was founded in 2006 with the goal of creating a new model for a land brokerage firm. At the center of this goal was the desire to change the way that land brokerage is practiced through the use of the Inland Company’s proprietary Land Information System. The Land Information System provides agents with unparalleled access to property information, viewable in a way that is relevant to developers, cities, counties, and land owners. The Land Information System brings aerial imagery, land use, zoning, topography, recent sales, and developer activity to a centralized database.

“This is an extremely exciting time,” said John Reeder, Inland Company founder. “Combining the reach of the Mimi Song Realty Group investor network, and the power of the Inland Company Land Information System results in a new company that is greater than the sum of its parts. We believe that the merger of the two companies gives us a formula that will allow us to better serve client needs, and in turn, better compete in this sector. I don’t know very many people as talented as Mimi, so anytime that you can align yourself with someone like that, you can’t afford to pass up the opportunity.”

John Reeder and David King will continue to emphasize and promote the 215 corridor, as well as other areas of specialty in Western Riverside County.

Clients interested in learning more about the merger should contact John Reeder for more information. Licensed agents interested in career opportunities with the company are also encouraged to contact John Reeder.

Western Realco acquires land in Perris

On October 26, an LLC formed by industrial developer Western Realco closed on 18 acres located at the SEC of Oleander and Perris Blvd in Perris (CLICK HERE FOR DEVELOPMENT ACTIVITY MAP). The property’s strategic location at the intersection of two arterial roadways in Perris gives it excellent location and visibility in an area which has emerged as a future powerhouse of logistics activity. Western Realco has traditionally specialized in big box industrial in Southern California and Nevada, and the acquisition follows the purchase of a large assemblage in Moreno Valley. Other developers in the area include IDI, Oakmont, and First Industrial. Existing owners/tenants of distribution facilities in the area include Wal-greens, Ross Dress for Less, Lowe’s and the recently signed Maytag.

Watson Land acquires 40 acres in Apple Valley

On September 17, Watson Land Company acquired 40 acres fronting Johnson Road (CLICK HERE FOR MAP) in the North Apple Valley Industrial Specific Plan, bringing the company’s holdings in the area to a total of 123 acres. Watson Land Company is a developer of industrial facilities and touts itself as Los Angeles County’s largest industrial developer. The move follows Watson’s acquisition of 83 acres south of the Wal-mart Distribution Center earlier in 2007, and First Industrial Realty Trust’s acquisition of a large assemblage in the immediate area. The dominant player in the area has been Las Vegas based investor Carl Ross, who has been aggressive in acquiring over 1,000 acres in North Apple Valley, and has also been a seller in some cases. Ross was the seller in First Industrial’s deal. Ross also recently picked up several smaller parcels which adjoin his existing holdings.

Inland Company Relevant Development Opportunities

270 Acre future logistics park – contact John Reeder for details

First Industrial displays aggressive acquisition strategy in 215 corridor

First Industrial Realty Trust acquired 215 acres adjoining the I-215 freeway at Ellis Road in Perris (CLICK HERE FOR MAP). The acquisition is FI’s second in the immediate area which totaled over 200 acres. Like their 205 acre assemblage fronting Goetz Road, this property is impacted partially by the San Jacinto River and portions of the land will not be developable until the County has finalized the San Jacinto River Plan. First Industrial has shown itself to be the most aggressive of the 215 corridor industrial players and now controls several strategic development properties. First Industrial Senior Vice President Phil Bowman spoke at the I-215 South Corridor Economic Development Summit and briefly outlined his company’s vision for the industrial future of the area. The powerpoint file for his presentation can be downloaded here.

Inland Company relevant development opportunities

17 acre commercial/industrial site – Perris Blvd, Perris – contact John Reeder for details

17 acre industrial site – Romoland – contact David King for details

6.3 acre industrial site – Perris – contact David King for details

9 acre industrial site – Oleander Ave, Perris – contact David King for details

Land transactions reflect market retreat - 10/8/07

Over the first nine months of 2007, land transactions in the Victor Valley are down 66% from the same period in 2006. While not surprising or unexpected given the problems affecting the area’s housing market, the number is still striking and of concern due to the continuing downward direction of the trend for overall sales volume.

The Inland Company recently reviewed closed land sales data from the Victor Valley Association of Realtors for the past three years in order to quantify the degree to which the housing market trouble has affected the land market. Housing statistics are often reported and show general market direction which can be expected to similarly influence the land market, but very little data is published showing land market specific trends. The Victor Valley data was chosen as an indicator due to the quality of data available from the VVAR, as well as the wide participation that the VVMLS receives from the top land brokers specializing in that area.

First 9 months Transaction Volume in Dollars

2005		$163 Million
2006		$162 Million
2007		$56 Million

Transaction volume in the Victor Valley peaked in September 2005 when the monthly closed sales volume exceeded $40 million. From that high, volume can generally be described as trending downward. The September 2007 closings which totaled a mere $3.16 million reflect the market decline over the two year period to a point where closings were less than 10% of the market high.

First 9 Months Total Closings

2005		539
2006		408
2007		165

Transaction volume did remain somewhat elevated through the first half of 2006, but declined later in the year as continuing negative news regarding the housing market poured in. The following graph shows transaction volume in the Victor Valley for the three year period studied (Click here for PDF version). Figures are shown in terms of prior three months average in order to reduce the influence of single large transactions in the data.

Sales over the past three months show a trend which continues to point downward.

Sellers beginning to acknowledge changed market fundamentals

Following the market high there generally has been a stalemate between buyers and sellers as buyers became unwilling to pay asking prices, while sellers hoped for a quick return to market health. However, recently some sellers have acknowledged the market descent and have either reduced asking prices, or shown a willingness to consider lower offers. The statistic showing sales price as a percentage of asking price remained amazingly consistent from 2004 to 2006, but decreased noticeably in 2007. The following table shows the average sale price as a percentage of asking price over the 3 year period.

Average Sales Price as % of List Price

2004		93%
2005		93%
2006		93%
2007		87%

Many market watchers have theorized that activity could improve as sellers begin to feel the increasing pain of debt service and balloon payments which will be coming due, abandoning their wait for the return to market health and instead seeking any offer available. The Inland Company will be monitoring sales data over the coming months to determine the extent that changing seller attitudes affects the volume of closed land transactions.

Notes regarding methodology

Data includes closed comps for land exceeding 10 acres in size
Data limited transactions reported to VVMLS and misses activity of brokerage firms who do not participate

First Industrial closes on land in Perris

On August 15, First Industrial Realty Trust added to its already substantial Inland Empire land holdings by closing on 46 additional acres located at the Nuevo interchange in Perris (Click here for map). This acquisition gives First Industrial a total of 62 acres located at that interchange. In May, the Press-Enterprise reported FI buying the first 16 acres of the assemblage for $8.90/sf. Kearny Real Estate (Jeffrey A. Dritley, Managing Partner) was the seller of the entire assemblage.

The acquisition at Nuevo follows FI's July closing on 17 acres located north of Rider St. and east of Redlands Blvd. in Perris (Click here for map). That property is located near FI's planned Rider Distribution Center. FI's purchase of the 17 acres highlights the fact that while Perris has a significant amount of land zoned for industrial use, the amount with existing infrastructure in place is nearly gone. Major road corridors such as Perris Blvd, Ramona Expressway, and Rider Street are dominated by national industrial firms, and most of the remaining land inventory will have significant infrastructure costs associated with developing it.

Victoria Homes sells portion of assemblage in Victorville

Victoria Homes (Paul Osborne, President) sold a portion of its assemblage in West Victorville to the Prem Reddy Charitable Foundation (Click here for map). The land totaled 212 acres south of Highway 18 and west of Baldy Mesa. The area is dominated by large assemblages including the remaining land holdings of Victoria Homes, along with Focus Group’s future master-plans and Richland Communities’ Adelanto assemblage. The sale embodies an increasing trend in which developers who bought far reaching assemblages at the fringes of growth attempt to unload portions of their land holdings. In recent months Richland Communities (Jack Bray, Chairman) was also rumored to be seeking buyers for their Adelanto assemblage. That assemblage is an impressive 2600 acres in size, but is scattered across some 65 square miles in Adelanto that for the most part lacks any kind of infrastructure. Much of the land was located in the path of SANBAG’s preferred HWY 395 re-alignment, though High Desert cities have recently decided to abandon that road project given the obstacles which plagued it and the lack of progress made over the years.

Ridge Property Trust acquires land in Moreno Valley south of 60 freeway
On March 23, Chicago based Ridge Property Trust acquired 40 acres south of the 60 freeway in Moreno Valley (Click here for map). Ridge is heavily invested in the Moreno Valley/Perris submarket, with 162 acres under development at the Centerpointe Business Park located on Cactus Avenue in Moreno Valley, and 187 acres under development at the Ridge Commerce Center in Perris. The 40 acres adjoins land which is owned by Prologis Trust and is the subject of a proposed zone change/general plan amendment. Prologis’ Moreno Valley project is in fitting with its strategy of acquiring high profile sites. Prologis is also developing a logistics site near the future Potrero Road interchange in Beaumont, and at the Oleander interchange in Perris.

Western Realco acquires 73 acres east of March Global Port in Moreno Valley

Orange County based industrial developer Western Realco acquired 73 acres east of March Global port, immediately south of Iris (Click here for map). The transaction is one of many this year which highlights the furious pace of activity in the 215 corridor and immediately surrounding March. Encouraged by major leasing transactions, developers continue to build on spec and have acquired land parcels for future development in an attempt to secure future market share. In August LNR Property Corp signed Kia as the tenant on a 404,000 square foot warehouse in the Meridian Business Park.

First Industrial Realty Trust acquires 226 acres

On July 3, First Industrial Realty Trust acquired 226 acres from Las Vegas based investor Carl Ross (CLICK HERE TO DOWNLOAD MARKET ACTIVITY MAP). The land is located in the Northern Apple Valley Industrial Specific Plan, a large block of raw land focused around the Wal-Mart Distibution Center and Apple Valley airport. First Industrial Senior Vice President Phil Bowman says that the company plans to position the land for “build to suit” on either a sale or lease basis. Seller Carl Ross has been aggressive in acquiring properties in both north Apple Valley, as well as the Main St. corridor in Hesperia. The sale is part of an emerging trend both for First Industrial, and the Victor Valley. First Industrial continues to demonstrate its aggressive acquisition strategy that is connected to its joint venture arrangement with CALSTRS, while the Victor Valley continues to see increasing investment by national industrial development firms.

First Industrial competitor AMB Property Corp acquired 400 acres south of SCLA in June. Other groups recently buying land in the area include SW Development LLC (Ted Wood, Wood E. Stone), and McRae Group of Companies (Ronald H. McRae). SW Development LLC purchased 83 acres at the Dale Evans Parkway interchange from Nu-Pac Investments (Pham). Scottsdale based McRae Group added to its holdings near the Dale Evans Parkway interchange by purchasing 292 acres located west of I-15. McRae Group now controls in excess of 1500 acres focused around the Dale Evans Parkway and Wild Wash Rd interchanges.

Prologis aquires 126 acres

On June 10, the Business Press reported the acquisition of 126 acres by Prologis Trust for an undisclosed price (see attached map). ProLogis touts itself as the world’s largest owner, manager and developer of distribution facilities. The site fronts the 60 freeway between the Moreno Beach and Redlands exits. The area had been the subject of a substantial amount of residential activity prior to ProLogis’ acquisition, though the 126 acres is expected to be developed as industrial. The site is not currently designated to allow industrial uses on the whole of the property, though ProLogis Vice President Mike Del Santo expects to work with the City of Moreno Valley on the issue. An issue being addressed by industrial and residential developers alike has been Moreno Valley’s reputation as a second tier bedroom community. Residential projects in the pipeline seek to address that issue by providing executive level housing, while ProLogis’ planned distribution park will likely result in addressing the imbalance between housing and employment currently found in the City.

Moreno Valley and other cities located in the 215 corridor have been the subject of ever increasing investment by national industrial developers. The heavily subdivided nature of the land in this area makes assemblages like ProLogis’ increasingly rare, as industrial developers seek to address the need for distribution space being driven by international trade.

First Industrial Acquires 205 Acres

On May 16, First Industrial Real Estate Trust announced through press release the acquisition of 205 acres slated for its future South Perris Distribution Center. The land acquired is located west of I-215 along Goetz Road and north of Ethanac Road (shown on the attached map). First Industrial’s press release notes a land inventory of 440 acres in California, with much of it concentrated in Southern California and likely to benefit from increasing international trade pouring through the ports of Long Beach and Los Angeles. Since 2005, First Industrial has closed on over 350 acres of land in Perris and Moreno Valley, almost all of which is in conjunction with their joint venture arrangement with the California State Teachers Retirement System (CALSTRS). The REIT, which touts itself as the nation’s largest provider of diversified industrial real estate, has aggressively targeted Perris and Moreno Valley.

The Press-Enterprise reported on May 7 that First Industrial had acquired 16 acres at the Nuevo and I-215 interchange paying approximately $8.90/square foot for the land. First Industrial’s acquisition of the 205 acres in the Ethanac Road corridor provides excellent position to both take advantage of long term trends arising from international trade, as well as short term progress in the Ethanac Road corridor. The interchange of Ethanac & I-215 is slated for in excess of 1 million square feet of retail, while the County of Riverside will be widening Ethanac Road in conjunction with the TUMF program. In addition to commercial activity already slated for this corridor, on May 14, CoStar reported that REIT Cornerstone Core Properties is in escrow to purchase the first 80,000 square feet of multi-tenant industrial buildings which are part of the Classic Business Part located near the NEC of Ethanac & I-215.