Industrial Portfolio Sells Near the Border

CALEXICO, CA-The industrial market is extremely tight along the California-Mexican border and investors are clamoring to own property in the area. In the latest deal, a four-building portfolio of industrial buildings, totaling 440,342 sf, sold for $8.7 million. In the deal, Gold Dredge LLC, an investment firm based in Sacramento acquired the properties from Calexico Warehouse I & II LLC. Michael McFarland and Tim Clepper, both principals in Lee & Associates’ San Diego office, represented the buyer while Linda Barrientos of Linda Real Estate in La Jolla represented the seller.Originally built for Calexico Tissue in 1999, the property became vacant after the tissue maker filed for bankruptcy. The four-building sale includes: a 104,802-sf industrial building with 5,522 sf of office space located at 2361 Portico Blvd.; a 101,400-sf building located at 2365 Portico Blvd.; a 108,600-sf building located at 315 Weakley Rd.; and a 125,540-sf building located at 325 Weakley Rd. The properties were 93% leased at the time of sale.McFarland tells Globest.com that the buildings were well below replacement costs. “The way building prices are now in the area, these properties were a good $10/sf below replacement costs,” McFarland says. Recently, he had a bid to buy land and develop the site and prices were nearing $30/sf, while the deal in question saw the portfolio go for around $19/sf.Each of the four buildings is currently occupied by a single company. Tenants include Teleplan Service Logistics, National Store Fixtures, Vilore Foods and Novamex. The marketing team has already begun strengthening the leases. “We took the Teleplan lease, which was month to month for 75,000 sf and signed the tenant to a three-year lease,” McFarland says.He adds that the market is primed for continued growth. “With the new port in place and manufacturing in China becoming more difficult, we’ll continue to see more manufacturing in Mexico.”