SANTA ANA, CA—Private commercial real estate investment firm CapRock Partners LLC has sold out the remaining 14 units of industrial condominiums at its South Coast Metro Business Center here. The closing represents the end of a successful redevelopment project and marketing campaign for the value-add project.
GlobeSt.com has learned that the entire hold period for the property was less than two years; renovations varied per unit, with some units extensive and others minor; and an additional building on excess land here was also entitled. The firm would not reveal construction costs to GlobeSt.com.
The center spans two buildings at 2834-2880 Fairview St. at the intersection with Segerstrom Ave. Before renovations, the space totaled approximately 75,000 square feet. The CapRock investment team tracked the asset for three years before acquiring fee interest in the high-image industrial complex through a receivership sale in 2012.
According to Pat Daniels, co-founder and CEO of CapRock, “The sell-out of our project is powerful validation of the entrepreneurial approach to value-add industrial assets for which we are known. Our team’s keen grasp of the market allowed us not only to acquire this asset, but also to quickly recast it for today’s industrial buyer and achieve returns for our investors that significantly exceeded expectations.”
After acquiring the asset, CapRock began extensive renovations to improve its functionality, redesigning and reconfiguring the interiors of the buildings and removing non-functional office space. The resulting industrial condominium units, ranging in size from 2,958 square feet to 8,857 square feet, then were marketed for sale as industrial condominiums by industrial brokers Louis Tomaselli and Steve Wagner of JLL and Jim Snyder and Sean Ahern of Lee & Associates.
“CapRock’s success with SCMBC is just another testament to its ability to execute,” says Tomaselli, JLL’s senior managing director, industrial advisory. “What’s unique is that they are doing it time and again in a competitive arena with limited value-add opportunities. CapRock is quite literally adding value.”
In addition to redeveloping the asset, CapRock also completed entitlement of a 12,000-square-foot land parcel at the project, which is now in escrow. According to Jon Pharris, a principal and director of acquisitions for CapRock, “Our exceptional relationship with principals, lenders and brokers continue to provide our firm with best-in-class access to assets and deal flow. Fairview is a prime example of this competitive edge. Our connections, coupled with our immediate access to capital, development expertise and our entrepreneurial approach to creating value, position us as a leading investment firm for industrial assets throughout California.”
Industrial redevelopment has become a large part of the construction in this sector seen in Orange County due to the land constraints and amount of industrial space that has become obsolete. As GlobeSt.com reported last week, distribution expansion is returning to the infill market, where e-commerce companies are looking to place smaller industrial buildings in order to be closer to consumers, Rick Ellison, executive director with Cushman & Wakefield‘s industrial properties group, told us. He added that the tight Orange County industrial market that is also land constrained is helping fuel demand for construction of these centers, which will likely come from redevelopment of existing obsolete buildings.