$5 Million Industrial Acquisition in the Inland Empire

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million industrial acquisition in the Inland Empire (Riverside-San Bernardino) is one of the highest-velocity industrial deal sizes in the country. The Inland Empire is one of the largest logistics and distribution markets in the United States, with sub-3 percent vacancy on stabilized industrial and active acquisition flow from owner-operators, investor syndicates, and institutional capital. Most $5M IE industrial acquisitions fund through bank balance sheet, life co relationship lenders, CMBS conduits at the smaller end of their pool sizing, or SBA 504 for owner-occupants.

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What a $5M Industrial Acquisition Capital Stack Looks Like

$5M Inland Empire industrial acquisitions typically fund as a single senior loan. The choice depends on whether the buyer is an owner-occupant (SBA 504 favored at 90 percent LTC) or an investor (bank, life co, or CMBS at 65 to 75 percent LTV).

Capital Source Rate / Cost Size / LTV Notes
Bank balance sheet (investor) 6.85 to 7.85% (5 to 7 year fixed) $5M / 65 to 70% LTV Recourse typical; depository relationship pricing
Life company (relationship) 5.95 to 6.65% (10 to 15 year fixed) $5M / 55 to 65% LTV Trophy stabilized assets only
CMBS conduit 6.45 to 7.35% (10-year fixed) $5M / 65 to 70% LTV Defeasance prepay; non-recourse
SBA 504 (owner-occupant) Bank 1st 6.95% / CDC 5.85% fixed $5M / 90% LTC (10% down) Owner-user financing only; 51% occupancy minimum

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Who Closes a $5M Industrial Acquisition Deal

Typical $5M IE industrial acquisitions split between owner-occupants (small to mid-market manufacturers, distributors, contractors expanding from leased facilities) and investors (private capital and family office syndicates with 5 to 50 industrial properties). Investor sponsor profiles typically have $5M to $25M net worth and target stabilized 1.20x to 1.30x DSCR with 65 to 75 percent leverage. Owner-occupants typically use SBA 504 at 90 percent LTC to acquire facilities for their own operating business.

A Real $5M Example

On a $5.4M acquisition of a stabilized 38,000 square foot industrial flex building in Ontario, CA, leased to two industrial tenants on long-term triple-net leases with 8 years of weighted average remaining lease term, the investor sponsor financed through CMBS at 6.85 percent fixed 10-year, 68 percent LTV, $3.7M loan amount, with full defeasance prepayment and standard CMBS pool servicing. Tenant credit was strong (one investment-grade national tenant on a long lease), the building was Class B mid-1990s vintage with stabilized occupancy at 100 percent, and the sponsor's institutional capital partner required non-recourse execution.

Anonymized. All deal references protect borrower and lender identity.

$5M Industrial Acquisition Inland Empire FAQ

Yes, for owner-occupants. SBA 504 finances owner-user industrial acquisition at 90 percent LTC. The owner's operating business must occupy at least 51 percent of the facility and meet SBA size and use eligibility criteria.
Stabilized Inland Empire industrial trades at 5.50 to 6.50 percent cap rates depending on building quality, tenant credit, and lease term. Cap rates expanded from the 4.0 to 4.5 percent peak in 2021 to 2022 with the broader CRE rate move.
Investor sponsors are typically private capital syndicates with $5M to $25M net worth and existing IE industrial holdings. Owner-occupants are typically mid-market manufacturers and distributors with 5 to 50 employees seeking to convert from lease to ownership.
Some will for relationship borrowers with strong sponsor profiles. Most life cos focus on $10M+ industrial; $5M is below the standard sweet spot but not disqualifying for relationship pricing.
Bank balance sheet loans are typically recourse. CMBS and life co are non-recourse with bad-boy carve-outs. SBA 504 requires personal guarantees from owners of 20 percent or more.

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