WALNUT, CA-An owner-user based in Los Angeles has acquired a foreclosed warehouse here for $98 per square foot in a deal negotiated by Los Angeles-based Pegasus Investments, which represented the seller, a Los Angeles-based bank. Vice president David Chasin of Pegasus, which operates from offices in Century City and Encino, represented the seller along with Pegasus president Ken Chasin. He notes that the property generated more than 100 inquiries and a "half dozen qualified offers, all of which came from owner-users." The winning bidder, who paid $4.6 million for the property, was "the buyer who demonstrated an ability to enter into a purchase and sale agreement with limited physical and financing contingencies," Chasin says.

The property had been occupied by the same tenant since it was built in 2002 until it was vacated in preparation for the new owner’s use. It is located along East Walnut Drive near the intersection of the 60 freeway and Fairway Drive. The property's infill location, local freeway access, favorable mix of warehouse and office space and quality of construction combined for a fundamentally attractive owner-user investment opportunity, according to Chasin.

Chasin says that the sale "highlights a trend which has been widely seen in the investment sales market throughout the last six months. We saw a clear point of inflection in the market where pricing went from sub-$90/SF to almost a $100/SF, and it all happened in a short time frame.”

Chasin adds, "For core, infill product there’s no doubt that we’ve seen a healthy recovery in valuation over the past six months. The real question on everyone’s mind is whether it’s sustainable or not.” At the time of sale the published asking price was nearly $4.8 million, approximately 5% higher than the ultimate sales price.

According to Chasin, the property had been widely marketed through a variety of channels. However, the ultimate buyer was sourced through a relationship Pegasus had with a broker it had closed other deals with in the past–Mark Repstad of Binswanger Realty Advisory Group. Rustin Mork, also of Binswanger Realty Advisory Group, co-represented the buyer with Repstad.