Good afternoon –

Prologis’s CEO Hamid Moghadam opined that Industrial space is “effectively sold out” amid the frenzy of leasing across the country. I would say that sentiment is the most accurate portrayal of what is going on in the marketplace. It is possible to find space but it is taking longer, it is more expensive, new terms are emerging that have never been in leases before like 4-5% annual rent increases, and you have to compete to win 95% of the time. This is true in the 2,000 SF, 20,000 SF, 200,000 SF and 2,000,000 SF size range. Here are a few updates we have for you.

1. New Investment Offering – 3501 W Segerstrom Ave, Santa Ana, CA

This 66,600 SF freestanding industrial building is located in South Coast Metro and represents an opportunity for the investor to buy and hold, to renovate and reposition, to expand to 90,000 SF, or to build a new 90,000 SF Class-A distribution center. The asking price is $21,000,000 with offers due by November 5th at 5 pm PST.

The offering memorandum and website are here for more information.

2. 1031 Exchanges

Here we were able to help a long-standing client reposition their portfolio of 7 free-standing Southern California industrial properties and 1031 exchange them into 10 properties in business-friendly states that are absolute triple net, with 10-20 year leases at a 6% cap rate or higher, with fixed 10% rental increases every 5 years. We had three of these closing this month.

• 11710 Quincy Lee Drive, San Antonio, TX – Dog Haus – 20 year lease at 6.33% cap with 10% rent increases every 5 years
• 6150 S Tower Rd, Aurora, CO – Guidepost Montessori – 20 year lease at 6.3% cap with 2% annual increases
• 115 E Industrial Dr, Beaver Dam, WI – Applebees – 25 year lease at 6% cap with 2% annual increases

2. New Team Member – Chris Vassilian

We welcome our newest team member onto the team, Chris Vassilian. Chris graduated from the University of California, Irvine with a Bachelor’s degree in Business Administration emphasizing Finance in three years! While joining the team at Lee and Associate’s, he is pursuing his Master of Finance degree at UCI to further both his educational background and experience in the workplace simultaneously. Chris focuses on business development and finding off-market deals for industrial developers in the midst of record low supply and insatiable demand. Fun Fact: Chris enjoys surfing in his free time.

 

Market Reports

• Los Angeles County (Market Report)
• Orange County (Market Report)
• Inland Empire (Market Report)
• San Diego (Market Report)
• United States Market (Market Report)

 

Media

• Book
  • Audible / Audiobook Now Available!
  • Buy Paperback & Kindle
  • Amazon Review
    • If you have enjoyed the book, I would be most grateful if you are able to leave a review on Amazon. You can find the link to do so here.
• Podcast
  • Underwriting Deals & the Journey to the Principal Side of the Business with Jonathan Metcalfe
  • LA vs OC vs IE in Industrial Development with Jay Tanjuan
  • Building a Full Service Property Management firm with Sam Chanin
  • Warehouse and Transportation Optimization with Phil Schmidbauer
  • Scaling Investment of Multi-Tenant Industrial – Brian Malliet of BKM Capital Partners
  • Saving on Taxes Utilizing Cost Segregation with Yonah Weiss
  • Subscribe to the show or listen to individual episodes here.

We’d love to catch up with you and brainstorm how we can make your goals come to life. You can book time with me at your convenience: https://calendly.com/industrialsmith/. Thank you!

Best Regards,

Justin Smith, SIOR              Grant LaBounty                      Jeannette Plumeda
jbsmith@leeirvine.com        glabounty@leeirvine.com        jplumeda@leeirvine.com