The Torrance, CA-based seller acquired the 24-year-old building at 5353 W. Bell Rd. in 2005 for just under $10 million through a sale-leaseback arrangement with Honeywell Corp. West Coast Capital, a value-add buyer, invested just under $40 per sf for improvements after inking a 10-year lease with the tenant in 2006, which considerably increased the asset's value.
"They took a tired building and made it brand new," says Kevin A. Shannon, vice chairman in CB Richard Ellis' Torrance, CA office. He says the buyer ended up getting the building at well below replacement cost. Shannon and CBRE vice president Ken W. White, also in the Torrance office, partnered with CBRE senior vice presidents Robert L. Young, Glenn Smigiel and Steven M. Brabant and vice president Richard W. Abraham, all in Phoenix, to broker both sides of the deal.
William Metzler, principal with West Coast Capital, says the tenant's long-term lease included an option to buy from the start. "We'd completed our renovations on the building and it was time to sell," Metzler tells GlobeSt.com. "We notified them, they made the offer and the deal was done."
Metzler says West Coast Capital has been active in the area, selling $200 million of its buildings in Phoenix and Tucson since March 2006. He adds that West Coast Capital has no intention of leaving the market and continues to actively seek out value-add opportunities. "We buy the unwanted and the underutilized, fix it up, stabilize it, then sell it," he says.
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