Value Add Multi-Tenant Industrial Park Sale

OVERVIEW

  • 1320 Grand Avenue | San Marcos, CA
  • Industrial Multi-Tenant Park
  • “Value-Add” Repositioning Strategy
  • Off-Market Transaction
  • 52,289 SF
  • 37 Incubator Suites
  • Acquisition Price: $6,885,000
  • Disposition Price: $9,250,000
  • 17-Month Hold Period

For more information regarding this case study, please contact:

RUSTY WILLIAMS

D  (760) 448-2453
Email // Resume

 

CHRIS ROTH

D  (760) 448-2448
Email // Resume

 

JAKE RUBENDALL

D  (760) 448-1369
Email // Resume

 

The Client

Focus Real Estate, LP, formed in April 2000, is headed by longtime real estate executive Richard Ortwein, former President of Newport Beach-based Koll Development Company, and his partners, Michael Ortwein and Jack Kappe. The company is a full-service real estate operator and developer, with a successful track record of acquiring, developing and asset managing office, industrial, retail and hospitality real estate in Southern California and beyond. As an operator/developer, Focus invests alongside its capital partners. Focus also works in a pure asset management capacity for third-party owners. Listed below is a list of recent transactions.

“Focus Real Estate, LP invests in real estate across Southern California and when it comes to market expertise and service, Rusty, Chris and Jake are second to none." 

- Jack Kappe, Focus Real Estate, LP

The Challenge

The subject property was never on the market for sale and had significant deferred maintenance. In-place rental rates were well below market and a majority of the tenants had been in the project for 10+ years. The original owner had owned the building for 30+ years and had never been tested with a significant offer. The property had great bones, an ideal corner location of a busy intersection in an up and coming market, as well as freeway signage along Highway 78.

Our Approach

We approached the listing broker with an unsolicited offer from the client. We were able to help underwrite the deal by providing market knowledge and pro-forma analyses then secured the deal for a below-market price of $6,885,000. Upon acquisition, the client implemented an aggressive value-add strategy that included various capital improvements and rent raises during lease-up. After completion of improvements, we began a detailed 8-week marketing campaign that identified all of the highlights of the property in order to attract the largest possible pool of institutional and private investors. In order to generate the most activity possible, we formulated a plan that utilized various marketing channels including our proprietary database of over 2,500 investors, a list of several thousand southern California brokers, as well as specialized listing services such as Real Capital Markets.

The Outcome

The team put together a marketing strategy that was able to field several offers from institutional and private investors. We had a call for offers 3 weeks after marketing launch and then a best and final call that created a competitive bidding environment between various buyers. After reviewing the offers, we ultimately identified a 1031 exchange buyer with the highest purchase price and shortest due diligence/escrow period and that we were most confident would close. The sale price was $9,250,000.