IRVINE, CA—Markets like the Bay Area are not necessarily the ideal place for value-add development since most of this work has already been done, causing redevelopment specialists to focus on different markets, CapRock Partners' CEO and co-founder Jon Pharris tells GlobeSt.com. After the firm's recent sale of its Menlo Park Tech Center project and its properties in the Melrose Industrial Park project in Placentia, CA, we spoke exclusively with Pharris about these transactions and the types of improvements that attract tenants the most.

GlobeSt.com: What stands out for you the most about these recent transactions?

Pharris: The Placentia deal shows the strength of the owner/user market. There is record low vacancy in North Orange County, and with interest rates being where they are and SBA financing as attractive as it is, we're still not at market peak pricing for buildings like this. The owner/user demand is high for buildings under 50,000 square feet. Also, we were surprised—although it makes a lot of sense—that the demand was all across the spectrum, whether it was a manufacturer, a satellite office for a bigger company, an entrepreneur who lives nearby or an import/export service. It was all types of users and really broad based across the economy, which is very good for long-term stability.

The Menlo Park deal represents the last asset we had in the Northern California market. We had about eight projects up there, and we've now sold them all. I believe that the Northern California market, from an investor-demand standpoint, is robust today, and it might be in the late stages of investing. It's more of a mature market today, and we are a value-add company. That market offers less value-add and has a strong appetite for stabilized assets.

GlobeSt.com: What types of improvements attract tenants the most?

Pharris: In both Northern and Southern California, it's often more-progressive space. We borrowed from what we've been doing in Northern California and brought it down to Southern California—the polished-concrete floors, open air, more collaborative space, fewer enclosed offices along the window line so there's no blocking of natural daylight.

GlobeSt.com: What else should our readers know about these transactions and your company?

Pharris: Our investment period is typically three to five years, so once a project reaches stabilization, we go ahead and sell it. A lot of the acquisitions we bought in 2011 and 2012 have now been stabilized, and we're looking to sell them as part of our business plan. We are selling in behemoth industrial buildings as well. In the Inland Empire, we sold a 400,000-square-foot building to Prologis and are marketing another 600,000-square-foot one, so we've sold close to 1 million square feet in that market. Also, we're in the process of a project in Anaheim coming to market very soon, with smaller units of 5,000 square feet to 10,000 square feet, and half a dozen of them were in escrow before they went to market. It will be 160,000 square feet total.