Maximizing Investments in Long-Term Holds

ANAHEIM, CA—Seeking out high-demand infill locations where buildings will best retain their value and appeal to tenants as existing leases expire is one strategy Bixby Land Co. uses for its industrial investments, the firm's EVP and chief acquisitions office Mike Severson tells GlobeSt.com. As we recently reported, Bixby recently acquired a 121,341-square-foot industrial building at 1400 Allec St. here for $18.2 million from Alere Property Group in an all-cash transaction. The acquisition follows a deliberate increase in core industrial investments by Bixby, which seeks leased, institutional-grade industrial projects in the $15-million-to-$50-million range in primary West Coast markets, Arizona and Nevada. We spoke with Severson about the firm's industrial strategy and if there's any crossover between it and the company's previous creative-office strategy.

GlobeSt.com: In long-term hold industrial scenarios, how do you maximize your investment?

Severson: We predominantly look for projects in the $15-million-to-$25-million range, where we can achieve a more competitive cost basis as compared to the higher demand for larger investments from institutional investors. Given the defined income stability with long-term leases, we seek out high-demand, infill locations where buildings will best retain their value and appeal to tenants as existing leases expire.

GlobeSt.com: Is there any crossover in strategy or experience between your creative-office endeavors and your current industrial focus?

Severson: We rely on similar real estate fundamentals in both scenarios, albeit with different yield expectations. Core investing, by its definition, lacks the value-add opportunity we bring to bear in our office redevelopment projects. The two investment strategies complement each other quite well.

GlobeSt.com: Do you anticipate a continued focus on industrial as this product type grows even more in demand?

Severson: Core industrial investments are an important aspect of our portfolio strategy, both in the Southland and in other primary West Coast markets. Our current portfolio is more than 6 million square feet, and we will continue to grow this income-producing aspect of our portfolio.

GlobeSt.com: What else should our readers know about your recent Orange County industrial purchase?

Severson: Bixby has a long track record in industrial, and we're actively looking for more buildings to buy. We currently own eight industrial buildings in Orange County and find the fundamentals extremely compelling. We are looking for more industrial product in most major West Coast markets, and we move quickly on opportunities.

ANAHEIM, CA—Seeking out high-demand infill locations where buildings will best retain their value and appeal to tenants as existing leases expire is one strategy Bixby Land Co. uses for its industrial investments, the firm's EVP and chief acquisitions office Mike Severson tells GlobeSt.com. As we recently reported, Bixby recently acquired a 121,341-square-foot industrial building at 1400 Allec St. here for $18.2 million from Alere Property Group in an all-cash transaction. The acquisition follows a deliberate increase in core industrial investments by Bixby, which seeks leased, institutional-grade industrial projects in the $15-million-to-$50-million range in primary West Coast markets, Arizona and Nevada. We spoke with Severson about the firm's industrial strategy and if there's any crossover between it and the company's previous creative-office strategy.

GlobeSt.com: In long-term hold industrial scenarios, how do you maximize your investment?

Severson: We predominantly look for projects in the $15-million-to-$25-million range, where we can achieve a more competitive cost basis as compared to the higher demand for larger investments from institutional investors. Given the defined income stability with long-term leases, we seek out high-demand, infill locations where buildings will best retain their value and appeal to tenants as existing leases expire.

GlobeSt.com: Is there any crossover in strategy or experience between your creative-office endeavors and your current industrial focus?

Severson: We rely on similar real estate fundamentals in both scenarios, albeit with different yield expectations. Core investing, by its definition, lacks the value-add opportunity we bring to bear in our office redevelopment projects. The two investment strategies complement each other quite well.

GlobeSt.com: Do you anticipate a continued focus on industrial as this product type grows even more in demand?

Severson: Core industrial investments are an important aspect of our portfolio strategy, both in the Southland and in other primary West Coast markets. Our current portfolio is more than 6 million square feet, and we will continue to grow this income-producing aspect of our portfolio.

GlobeSt.com: What else should our readers know about your recent Orange County industrial purchase?

Severson: Bixby has a long track record in industrial, and we're actively looking for more buildings to buy. We currently own eight industrial buildings in Orange County and find the fundamentals extremely compelling. We are looking for more industrial product in most major West Coast markets, and we move quickly on opportunities.