Investors with deep pockets appear to be renewing their interest in Inland Southern California's best distribution sites, several people that follow the area's real estate said.

KTR Capital Partners LLC recently announced it had purchased 1.2 million square feet of warehouse space near the intersection of interstates 10 and 15 in Ontario. It was the second major acquisition in the last two months for KTR, a New York City-based private equity investment firm.

Panattoni Development Co. was the seller, and each of the five buildings has multiple tenants, said Darla Longa, vice chairman of C.B. Richard Ellis, who marketed the property for Panattoni. The tenant list includes Charlotte Russe and Volvo, Longo said.

Longo said KTR was not the only company interested in the property, and she said it looks like private investment firms, after a long period of caution, want to make some moves.

"I think capital is back and wanting to buy," Longo said.

Redlands-based economist John Husing, who has followed the Inland logistics business for years, said he's been contacted by representatives of several well-funded commercial real estate companies recently who want to retain him for counsel on future deals.

Husing said these companies recognize that when the recession is over, the Inland region will look the same as it did before 2007, when it was viewed as probably the top distribution hub in the country. The transportation arteries and the huge work force will still be here.

"It's almost like someone turned on a switch," Husing said of the new interest. "It looks like the commercial real estate community is sensing that the worst is over, and the smart ones are positioning themselves for the next bull run."

Growth in the warehouse industry is largely based on consumer demand. Despite some good January results announced Thursday by several major retailers, consumers are still worried about persistently high unemployment.

But the struggling economy also sets up buying opportunities, especially for properties in or close to Ontario. Western San Bernardino County, called the West End in commercial real estate circles, is considered the more desirable location for warehouses because of the confluence of freeways and its proximity to Ontario International Airport.

The KTR purchase is within two miles of the airport, according to a statement from the company. The company did not disclose the price, and a representative did not return several phone calls.

KRT closed on a 656,000-square-foot distribution center in Ontario leased to the shoe company Converse in December, said Dane Fedora, client services manager in the Ontario office of commercial property firm Grubb & Ellis.

The Converse distribution center is only 2 years old, Fedora said. The price of a piece of warehouse property in the West End has declined about 30 percent since 2007, meaning there are bargains out there.

"This is a great example of the kind of top-tier product buyers are chasing," Fedora said. "There's private capital out there just waiting to pounce."

KRT also has properties in Fontana and other areas of Southern California and picked up the bulk of them in 2009, according to its statement. Most of its holdings are in Florida and Illinois.

"They're a well-known player that's picked up multiple holdings," said Mary Sullivan, a commercial real estate consultant. "They appear to be buying well-located, leased properties in the mature West End. It bodes well for us."

http://www.pe.com/business/realestate/stories/PE_Biz_W_warehouses05.363160c.html