Done Deals: Mar 5, 2023

Sunday, March 5, 2023

Luminous Capital Management sells Carlsbad, CA R&D building for $19 million

Cosmos Court industrial facility, Carlsbad, CA

IRVINE, CALuminous Capital Management, in partnership with Austin-based Virtus Real Estate Capital (the “Partnership”), has sold 2290 Cosmos Court, a 37,200-square foot industrial/R&D building in Carlsbad, CA.

Rusty Williams

The Property was sold to Hazard Jr Enterprises LP (“Buyer”), a family-owned entity advised by San Diego-based Commercial Facilities, Inc. (CFI), for $18.63 million ($501 per sq. ft.).

Rusty Williams, Chris Roth, and Jake Rubendall of Lee & Associates represented ownership in the sale and the REEF lease

Luminous and Virtus acquired the Property in January 2022 and shortly thereafter signed a 10-year lease for the entire building with REEF, a leading global manufacturer of beach-inspired footwear and apparel which has been based in Carlsbad since 2007.

Chris Roth

The Buyer was attracted to the Property due to the long-term lease cash flow backed by REEF’s iconic brand, and the company took occupancy of the facility in late-January.

Tom Lam, Principal, who led the purchase and sale for Luminous commented, “We initially acquired Cosmos Court with the intention of converting it for bioscience use.

"However, solid real estate in tight markets often presents attractive alternatives. That proved to be the case here, as the lease with REEF was compelling enough to pivot from a life science conversion.”

Jake Rubendall

The R&D Property was acquired for $9.53 million ($255 per sq. ft.), and Luminous invested significant capital in transforming the project to house REEF’s operations.

“We are excited about our new headquarters and are appreciative of the outstanding working relationship we have established with Luminous, the architects at ID Studios, the construction team at C2 Building Group, and all involved in this project,” said REEF President, Mike Jensen.

Following the sale, Luminous will finish additional exterior improvements, including renovated landscape/hardscape, construction of several outdoor workspaces, and the installation of a solar energy system atop new carports.

Chris Roth

The Buyer was attracted to the Property due to the long-term lease cash flow backed by REEF’s iconic brand, and the company took occupancy of the facility in late-January.

The outdoor renovations are expected to be completed in June, at which time REEF will announce its grand opening.

Virtus provided joint venture equity for the building’s acquisition and repositioning. Following the sale of Cosmos Court, the Partnership has two remaining projects in San Diego County, including 5931 Priestly Drive in Carlsbad Research Center. Financing for the project was provided by California Bank & Trust.

Tom Lam

About Luminous Capital Management

Luminous Capital Management, based in Irvine, CA, is a real estate investment manager which seeks to operate on the frontier of value creation, identifying macro-trends that complement active implementation of business plans.

Current areas of focus for investment in the Western U.S. include properties driven by life science discoveries, changing demographics, and growth in the digital economy.