NEWPORT BEACH, CA—Three new industrial acquisitions have been completed in South Orange County, illustrating a growing trend in the demand for investment properties, particularly in the industrial sector. According to Brian Cole of CBRE, who represented the buyer in each of the three sales, the transactions reflect the current, highly competitive environment where multiple offers and all-cash buyers are becoming the norm.
First, the 39,250-square-foot industrial space at 33033 Camino Capistrano in San Juan Capistrano was purchased by U-Haul in an all-cash sale transacted at $5.6 million. U-Haul was selected as the buyer from a pool that included three other offers. GlobeSt.com has learned that the seller was the Renken Co., a real estate investment company out of Los Angeles.
“U-Haul was able to offer all cash and close quickly, which was critical,” says Cole. “Not only does an all-cash offer ensure a smooth process, but it allows sellers to avoid having to get an appraisal on the property, so there is definitely a preference for these types of buyers.”
The property offers U-Haul office space as well as retail and truck storage in a high-profile, recently remodeled building that fronts both Camino Capistrano and the I-5 freeway. It features an on-site parking lot containing 95 parking spaces and three ground-level loading doors.
The second transaction was the sale of a single-tenant retail building at 24799 Alicia Pkwy.in Laguna Hills by seller Northwest Dealerco Holdings LLC for $4.5 million to a private Asian investor. The 4,415-square-foot building, which is occupied by Chase Bank, is situated at the corner of Alicia Pkwy. and Hon Ave., a high-traffic area. Cole partnered with CBRE's Arthur Flores to represent the buyer in an all-cash transaction that resulted in a quick, two-week close. Built in 2013, the Chase building has a 10% rental increase every five years on a 19-year lease.
“We identified this opportunity before it came to the market and made an offer on it right away,” says Cole. “Ultimately, the property did come on the market and generated about 10 other offers the day that it was released. Our ability to find the opportunity early and bring an all-cash offer to the table with an ability to close quickly set our buyer apart in a very competitive situation.”
The third transaction was the $2.85-million sale of a 20,000-square-foot, free-standing, industrial building located at 27002 Vista Terrace in Lake Forest to Fencescreen from Neil Philips, a local private investor named. Another off-market deal, this one received three additional offers from other brokers doing the same thing for their buyers: calling a building owner asking if they are thinking about selling. No information was available about the buyer or seller.
“With inventory so low and a large number of tenants and buyers in the market, there's been a tremendous increase in off-market transactions, many of which are commanding multiple offers,” says Cole. "At the end of the day, identifying opportunities before they come to market is key in today's competitive environment.”
As GlobeSt.com reported in April, Q1 was a fast and furious quarter for the national industrial market, but locally speaking, Orange County holds the lead as the market with the lowest vacancy rate in the country. According to a report from Cushman & Wakefield, the county finished the quarter with 3.9% industrial vacancy, an annual change of -0.8%, followed by other California markets including Greater Los Angeles at 4.3%, Oakland at 4.5% and the San Francisco Peninsula (tied with Denver) at 4.7%.
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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.
