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| Arrow Business Park, Rancho Cucamonga, CA |
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| Frank Geraci |
RANCHO CUCAMONGA, CA
(Sept. 9, 2016) – Voit Real Estate Services has successfully completed the sale
of Arrow Business Park, a
seven-building, 136,806 square-foot multi-tenant industrial/flex business park
in Rancho Cucamonga.
Frank Geraci and Juan Gutierrez of Voit’s Inland Empire office and Mike Bouma of Voit’s Orange County
office worked together to represent both the buyer, Focus Real Estate, and the
seller, Essex Arrow LLC, in the transaction.
“The Inland Empire is one of the strongest
industrial markets in the nation,” comments Geraci. “Vacancy rates in the prime
Inland Empire West submarket finished the second quarter at 3.75 percent, and
average lease rates jumped to $0.56 per square-foot, surpassing pre-recession
peak rental rates for the first time ever.
“ Based on these strong
market fundamentals, the Arrow Business Park is extremely well-positioned to
capitalize on rising rental rates and the growing demand for quality industrial
space throughout the region.”
The business park, which
was sold for $15.4 million, consists of 69 units ranging from 240 to 12,650
square feet in size.
Geraci explains that no
new multi-tenant industrial business parks have been built in the last 15 years
in the local market, adding that high land and construction costs have
significantly limited the available supply of new multi-tenant industrial
product in this region.
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| Juan Gutierrez |
“Demand for space in
existing multi-tenant parks is at an all-time high, placing upward pressure on
lease rates for this product type,” Geraci adds.
“In particular, demand for
smaller flex units with office build-outs is on the rise as tenants continue to
seek spaces that can accommodate a vast array of corporate functions. We are
now at a point in the recovery cycle where multi-tenant industrial is poised
for tremendous growth, and investors are taking note.”
Located in the Rancho
Cucamonga submarket, which boasts a 1.76 percent industrial vacancy, the Arrow
Business Park was 76 percent occupied at acquisition, presenting an initial
challenge that the Voit team was able to overcome.
“Despite the property’s
prime location in a highly desirable submarket, the vacancy rate raised initial
concerns among some of the prospective buyers,” says Geraci. “We knew that the
property presented tremendous opportunity for value creation in the hands of an
experienced owner-operator.
“ By emphasizing the
strength of the market, the well-below replacement cost value, and the asset’s
tremendous value-add potential, we were able to successfully secure a buyer
that recognized the opportunity for value creation.”
Voit’s Inland Empire and
Orange County offices worked together to achieve this success - an integration
that is reflective of Voit’s new broker-owned platform in action, according to
Geraci.
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| Mike Bouma |
“Voit’s new structure
gives every broker a personal stake in the company,” he explains. “The knowledge that the company’s success
equates directly to each broker’s success has created a renewed energy and
drive that is fueling collective work among and between our brokers. As a result, we’re able to create even better
outcomes for our clients, and for ourselves.”
Geraci notes that in this
case, the result was identifying a buyer that understood the property’s
potential, and demonstrated surety of close.
“Focus Real Estate’s
proven track record and solid financial backing enabled them to emerge as the
right buyer for this asset,” he states.
Focus Real Estate acquired
the property in partnership with HG Capital. Chris Bramel and Randy Bramel of Bridgeport Investments arranged
the debt and assisted with the equity for the acquisition. An acquisition loan was provided by
Silvergate Bank of La Jolla.
Built in 1988, the Arrow
Business Park features ample parking, 16’ to 24’ warehouse clearance ceilings,
ground level loading, and a 35 percent office build-out. Located at 9047-9087
Arrow Route in Rancho Cucamonga, California, the property offers immediate
access to the I-210, I-15, and I-10 for distribution and transportation.
The property’s close
proximity to residential communities and extensive retail amenities such as
Victoria Gardens and many local service providers make this a strong,
centrally-located industrial asset that will deliver long-term value to tenants
and investors, according to Geraci.
Focus Real Estate plans to
upgrade the property, reposition the vacant space through a series of capital
improvements, lease the vacant space, and bring rents to market upon tenant
rollover in order to deliver strong risk-adjusted returns to its investors.
For a complete copy of the company’s news release,
please contact:
Katie Kea / Jenn Quader
Brower, Miller & Cole
(949) 955-7940
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