The Benefits of Being a Private Investor

Solomon: “Research shows that California has surpassed France as the sixth-largest economy in the world with an estimated $2-trillion GDP, so we like to invest in California for that and other reasons.”

ORANGE COUNTY, CA— BLT Enterprises doesn’t have partners or investment committees and will close its transactions on an all-cash basis if the deal is right, chief development and legal officer Rob Solomon tells GlobeSt.com. As we recently reported , the Santa Monica, CA-based firm recently acquired a four-building office , flex and industrial portfolio encompassing 170,447 square feet and spanning four Orange County cities from Cordia Capital Management , a private real estate investment firm based in Los Angeles. In addition, BLT has acquired Sorrento Tech II , a $12.6-million office and R&D campus in San Diego’s Sorrento Mesa market, comprising 63,333 square feet from what Real Capital Analytics reports is CWCapital Asset Management . The property was renovated in 2014 and was 87% leased to two large tenants at the time of acquisition, and BLT founder and president Bernard Huberman says it “offers increased value through our ability to lease the final 8,000-square-foot space, as well as utilizing our in-house management team to ensure this property continues to offer high-quality space in a strong submarket.” We spoke exclusively with Solomon and Huberman about the Orange County market in particular and the firm’s strategy for the second half of the year. GlobeSt.com: What do you find compelling about the Orange County properties you recently purchased? Solomon: At the 60,000-square-foot level, we focus primarily on coastal California real estate. Research shows that California has surpassed France as the sixth-largest economy in the world with an estimated $2-trillion GDP, so we like to invest in California for that and other reasons. This portfolio is in the core markets we want to be in and offers a mix of product types. We were able to acquire them at what we thought was a good price per square foot. All of the buildings have short-term leases, but for most tenants the probability of renewal was high. It was an opportunity to get a good risk-adjusted return for Southern California real estate.

Huberman: “For tenants that have needed to contract, we have been able to take them from a larger to a smaller building at no cost to them rather than having them dissolve a lease and pay a penalty. And if they need to expand, we’ll be there to expand with them.”  

GlobeSt.com: These acquisitions are in a number of different property sectors. Which sectors do you see as strongest for the Orange County market? Solomon: For our purposes, we primarily focus on industrial, light-industrial and industrial-commercial. The Orange County industrial market is extremely tight. For two of the buildings we bought, in Irvine and Garden Grove, we see long-term appreciation and growth continuing in those markets. On the office side, the building we bought in Anaheim is a nice, smaller office building that’s well located down the street from Angel Stadium. And the office/flex building we bought in Aliso Viejo attracts users from coastal Orange County. GlobeSt.com: What is your investment strategy for the second half of the year? Solomon: We will continue to buy as we see opportunities within 20 miles of the coast of Southern California that are located near transportation particularly, with proximity to the ports. Our deal size is slightly below the radar of what institutional investors are looking at, so we’re not competing with them. We also buy in core markets product that is not the same functionality as the newly built, 32-foot-clear distribution buildings we’re seeing in Inland Empire. There’s a lot of commerce going on in these older-style industrial buildings.

Sorrento Tech II is BLT’s latest acquisition in the San Diego market.

GlobeSt.com: What else should our readers know about your company/ Solomon: We are privately owned and don’t have any partners or investment committees. We’re entrepreneurial and move quickly. If we like an opportunity and it’s a good deal, we will close the transaction all cash. It takes the certainty-of-close risk out of the equation. Huberman: We’re also a service company to our tenants. If we have a tenant that needs to grow, we will either grow or buy another building for them. For tenants that have needed to contract, we have been able to take them from a larger to a smaller building at no cost to them rather than having them dissolve a lease and pay a penalty. And if they need to expand, we’ll be there to expand with them. With developers leveraging development and redevelopment opportunities across all property types, how can you capitalize on this activity? Join us  at RealShare Orange County on August 16^th for impactful information from the leaders in Orange County CRE. Learn more .