(To read more on the industrial market, click here.)

NEWPORT BEACH, CA-Master Development Corp. has acquired two new industrial projects for $18 million under its new $55-million joint venture with GE Asset Management. The two projects include a 127,8000-sf industrial building in Corona that the JV bought for $11.5 million and 17 acres of land at the intersection of Otay Mesa Road and Alisa Court in San Diego’s Otay Mesa submarket that it bought for $6 million.

Master Development plans to build a 330,000-sf project on the Otay Mesa site that will be a combination warehouse, distribution center and corporate headquarters. The firm will also consider selling the land or developing a build-to-suit.

Bryan Bentrott, executive vice president of MDC, notes that Otay Mesa is one of the last affordable industrial submarkets in San Diego County and that his company has made a concerted effort to develop buildings there since 2002. The acquisition represents “the type of high-value opportunities we hope to continue to acquire under our new joint venture” with GE, Bentrott says.

MDC has developed and sold 18 buildings over the past four years within a three mile radius of the new development site. The company was represented by Fouy Ly of the Irvine office of Sperry Van Ness in the acquisition from a private family partnership.

Master Development’s new Corona asset is 100% leased to CertainTeed Corp., which manufactures and markets vinyl windows and doors for the residential market. The property is at 235 Radio Rd., with visibility along and access from the 91 Freeway.

The company bought the Corona building at a price below replacement cost, notes Bentrott, who says that MDC knew the value of the site because it developed and sold 19 freestanding industrial buildings down the street from the location in 2005. MDC was represented by Jedd Zaun and Bill Garrett of Lee & Associates’ Newport Beach office in the acquisition from the Stuart Family Trust.

MDC’s joint venture with GE Asset Management is unusual in that it gives Master Development broad discretion in investing $50 million of equity from GE in industrial projects that Master Development will choose and execute. As Bentrott told GlobeSt.com last year when the JV was announced, the venture gives MDC “discretion to invest the money within a given set of rules,” an arrangement that is extremely rare in the world of joint ventures.

MDC will be a 10% co-investor in the projects, meaning it will add about $5 million of its own capital to the $50 million of GE equity. The JV expects to acquire about $180 million of assets with the $55 million of equity.

“Our primary focus will be land sites larger than seven acres and existing properties valued at more than $10 million, as well as landowner joint ventures,” Bentrott says. “We hope to find mid-tier office and industrial properties from $10 million to $30 million that require renovation and/or offer the opportunity for condominium conversion.”

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