General Investment Guidelines
Existing Buildings
Product Type: Mid-sized industrial real estate (30,000-150,000 sf)
Project Type: Value Add and Investment
Prefer leased assets with deferred maintenance, short lease terms, vacancy or other value add component.
Multi-tenant
Age: 20 years old and newer
Location: Northern California, Nevada and Colorado
Specific Markets to look at: Fairfield, Napa, Vacaville, Richmond, Sacramento (and surrounding areas), North LA (Oxnard, Simi, Van Nuys, Glendale, Burbank, Santa Clarita, Rancho Cucamonga, Conejo)
Project Size: $2,000,000 – $20,000,000
Equity Investment Range: $1,000,000 – $10,000,000
Loan-to-Value: 55% – 75%
Loan-to-Cost: 60% – 80%
Target IRR: 12% – 16%
Duration: 3 – 8 years
Land:
Size: 2-20 acres
Zoned: Industrial, business park, Light industrial, commercial, etc.
No known environmentally challenged projects
existing structures are ok
Prefer infill in existing industrial parks, especially high quality parks, prefer markets with historical vacancies of less than 10%, would be willing to take on projects with multi-phases.
Methodology:
New Development – We acquire entitled land in secondary markets. We target local and regional businesses for build-to-suit for lease transactions. Our project expertise is in working with local jurisdictions through the planning and building phases, value engineering, and completing projects on time and on budget. Our tenant expertise is guiding clients through the development process and management after project completion. We have never lost a tenant to a competitor. We target tenants who are expanding, have local decision makers, high fixturization costs, good credit, revenues of greater than $5,000,000 and 10+ years in business.
Existing Buildings – We acquire value-add properties in our target markets. We target modern, (less than 18 years old) properties with a value-add component such as vacancies, deferred maintenance, in need of upgrades or mis-priced. We purchase properties for cash or modest leverage, at or below replacement costs, invest and stabilize, manage, refinance or sell with hold times from two to six years.