Challenge

10605 Jamacha is an industrial campus that was purchased off-market with a value-add through improvement and leasing structure. The investment is a two-building campus totaling over 100,000 square feet on 5.66 acres.

 

Strategy

The agents secured a short-term tenant to occupy the property while they were completing a large capital improvement project. This allowed for agility in leasing in order to be patient and create leverage to negotiate as high a rate as possible. Securing this stable in-place income allowed for the ownership to originate much more attractive debt, which was fixed for seven years in the mid-3.0% range.

 

Results

Ultimately, the agents expanded the existing national-credit tenant into the new, improved space. The agents were able to advise ownership on the specific strategic capex items to focus on, and they were able to limit that budget to only $300,000 for the entire property, inclusive of tenant improvements on the release. They secured a 12-year lease with a full campus user, locking in a long-term above-market return. This property is currently operating at an in-place 6.9% cap rate.