Institutional Capital is Hot for Last-Mile Industrial

Stos: “Of all product types, there’s more demand from institutional investors to buy this type of product than anything I’ve seen.”

NATIONAL CITY, CA—The need to place capital allocated for industrial in strong-credit-tenanted assets is driving demand for this product type in the San Diego market and across the country, Stos Partners principals tell GlobeSt.com. As we recently reported, the privately held commercial real estate investment and management firm recently sold a 91,541-square-foot single-tenant industrial building here to a large institution for $21 million after acquiring the asset in November 2016 for $12.2 million and making improvements to it, reflecting a 210% project level IRR in just 14 months.

Stos says the sale reflects a larger trend of institutional demand in last-mile distribution centers. We spoke with CJ Stos, principal, and Jason Richards, partner, of Stos Partners, to discuss institutional demand for last-mile distribution centers in San Diego and how buyers are gaining an advantage in the competitive industrial marketplace.