The property, at 2550 E. 28th St., is occupied by a publicly traded logistics company that signed a 10-year, triple-net lease concurrent with the JV's acquisition of the facility. Baraghoush says that the new ownership's business plan is to hold the asset for cash flow in the medium term.

Built in 1986, the property comprises an 80-door cross dock facility on an eight-acre, fenced-in site. The site serves as a distribution hub for L.A. County for the tenant, which is a trucking company specializing in less-than-truckload distribution services across the nation.

A life insurance company provided a loan of 50% of the acquisition cost on a 10-year, fixed-rate basis; HG provided 90% of the remaining equity capital. Perry Colligan of Q10 Dwyer-Curlett & Co. was involved in procuring the life company loan as well as the introduction of HG Capital and Morecambe Partners.

Baraghoush says that the acquisition provided HG the opportunity to own an existing logistics property in a strong industrial submarket in L.A. County. "Given our basis, the asset's location, and virtually zero vacancy for like product, we are confident that owning this asset will produce strong cash returns," he says.

HG can invest in properties for up to approximately eight years, and in this case, Baraghoush says, the investment is one in which the Menlo Park company expects to be holding with its partner for more than five years.

The acquisition follows another HG Capital deal in Southern California: Last year, the company acquired a bank-owned project of 20 finished townhomes and 227 finished lots called Monterey Ridge in Palm Desert for 15% of the outstanding principal balance.