TUSTIN, CA-Randy Bramel, founding principal of Bridgeport Investments, tells GlobeSt.com he sees the beginning of a trend toward speculative development of smaller industrial buildings, particularly in the Inland Empire and Los Angeles and Orange counties. A dearth of available buildings in the 25,000- to 50,000-square-foot range is causing this trend to take off.
“We're in the very early days of this new trend,” says Bramel. “The reason that it's happening is because there's a very low level of quality supply available. If a user needs a quality building, they can't find it, so it's creating the opportunity for developers to step in and begin developing projects.”
The new buildings going up have good clear heights and have dealt with some of the environmental issues about which cities are concerned. Financing for this construction has increased over the past 12-15 months, as it has for big-box industrial, Bramel adds.
Bramel also says he's seen a significant pickup in active and pursued transactions on the part of Bridgeport's developer and sponsor clients over the past four to six months. “Everybody got enthusiastic and energized at the same time. On the financing side, we're seeing a good amount of capital in the marketplace, and we've noticed over the last year that high-net-worth individual investors are coming back onto the market in a significant way.”
On the debt side, Bramel says there's decent bridge and permanent financing available in the marketplace, and he's beginning to see development and construction financing for apartments, build-to-suit retail and industrial development as well.
As GlobeSt.com reported last week, Bridgeport Investments has successfully secured two equity financing commitments totaling $45 million on behalf of its clients. The firm secured $35 million in equity financing on behalf of CapRock Partners to fund several future acquisitions of industrial properties in California and $10 million in equity financing on behalf of Peninsula Retail Partners to fund various retail development opportunities. “We're thankful we've been able to put that financing together in recent times, and we hope and kind of expect there may be some more of those in the coming year,” Bramel tells GlobeSt.com. “Time will tell.”
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
