ANAHEIM, CA-BPG Properties of Philadelphia has acquired two empty industrial buildings totaling 276,825 sf from Connecticut-based Hart Realty Advisors and plans $1.2 million of capital improvements at one of them. The deal marks the second time within the past two weeks that an investor has acquired an empty Orange County industrial property with plans for lease-up in a value-added play.
SVP Louis Tomaselli of Voit Commercial brokerage tells GlobeSt.com that the acquisitions of the vacant buildings are "an indication of the demand for industrial product from investors, who are willing to take on some risk in order to get class A industrial product in Orange County." The new BPG property comprises two buildings at 1600 and 1650 N. Kraemer Blvd. that the Philadelphia-based firm bought on behalf of its $500 million BPG Investment Partnership VII.
Tomaselli, who brokered the sale of the buildings along with Mitch Zehner and Mike Hefner of Voit, says that investors are willing to take the lease-up risk because of the high demand and low vacancy in the county. A report on GlobeSt.com last week noted that Orange County's industrial rate sits at an all-time low of 4.72% and lease rates have climbed by 18% in the past year to reach an all-time high of 72 cents. At the same time, only 1.2 million sf of space is under construction on a base of 221 million sf.
Terms of the BPG acquisition and the earlier purchase of a 258,000-sf industrial property in the Orange County city of Westminster by Rreef were not disclosed, but industry sources tell GlobeSt.com that the new BPG facilities sold in the high $20-million range and that Rreef bought its property for about $20 million. The purchase price for BPG was "below replacement cost," according to Andrew White, Los Angeles-based SVP and western regional manager for BPG. White and Maureen Shanahan, associate in the firm's Los Angeles office, represented BPG in the deal.
BPG plans about $1.2 million of improvements in the older of the two buildings, the 154,225-sf 1600 N. Kraemer, which was completed in 1975. The 122,600-sf 1650 N. Kraemer building was completed in 2002. Leasing agents for the buildings are Tomaselli, Zehner and Hefner.
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