STEEL PEAK ACQUIRES INDUSTRIAL OUTDOOR STORAGE PROPERTY IN SAN DIEGO, CA AREA FOR $6.3 MILLION IN ALL-CASH TRANSACTION

 

Blake Rodgers

SAN DIEGO, CA—Steel Peak, a commercial real estate investment firm focused on industrial outdoor storage (IOS) properties, has acquired a four building, 12,000-square-foot IOS property located on 2.5 acres in El Cajon for $6.3 million.  Located at 1324 Magnolia Avenue, the firm paid all cash with an institutional equity partner for the property.

 Cameron Czubernat and Kerry Schimpf with Commercial Properties Group represented the seller, a family trust.

Kerry Schimpf 

This newest acquisition is less than 100 yards from another Steel Peak owned IOS facility that is 100 percent leased to a national tenant. Steel Peak plans to improve this recently acquired site with new paving, fencing, drainage, as well interior and exterior building improvements that will enhance the operational efficiency of the site.

 

“We were attracted to the property because of its heavy industrial zoning that has outdoor storage uses permitted by right, along with its close proximity to freeways and multiple points of ingress/egress,” said
Blake Rodgers, Steel Peak Principal and Co-Founder.

Cameron Czubernat 

“Steel Peak will continue to seek IOS investment opportunities throughout San Diego and Southern California with capitalized values ranging from $5 million to $50 million. The firm invests directly and in partnership with institutional investors and high net-worth investors. Our goal is to is to become the most active buyer of IOS sites in San Diego this year.”

IOS properties are within a sub-segment of the Industrial asset class that serve the needs of the transportation, logistics, and construction sectors. IOS sites are categorized as having less than 25% building coverage and are zoned for industrial uses that allow the outdoor storage of vehicles, products, construction equipment and materials, or containers.

SOLD: for $6.3 million,  a Four building,
12,000-square-foot IOS property
located at 1324 Magnolia Avenue
 on 2.5 acres in El Cajon, CA
 .   , 

About Steel Peak

Steel Peak is a Southern California based real estate investment firm that specializes in unlocking value in industrial outdoor storage (IOS) properties. Steel Peak’s relationship driven investment strategy focuses on sourcing hidden opportunities that translate to outsized returns.

 

Steel Peak invests directly as well as in partnership with institutional and high net-worth investors. For more information, please visit 

 

 

CONTACT: 

 

 David Ebeling

 Ebeling Communications

 (949) 278-7851

  david@ebelingcomm.com

www.steelpeakproperties.com

 

JLL Capital Markets arranges $25 million refinancing of the 149-key Courtyard Salt Lake City Cottonwood Hotel in Cotton Heights, UT

Olga Walsh

  

SAN DIEGO, CA –  JLL Capital Markets  arranged $25.4 million in financing for 149-key Courtyard by Marriott in Cotton Heights, Utah.

 

JLL worked on behalf of the borrower, an affiliate of Huntington Hotel Group, and secured a floating-rate, interest-only loan from NYL Investors with term of up to four years inclusive of extension option.

 

 Loan proceeds were utilized to repay existing bank loan in addition to providing substantial cash-out, which was used towards partnership buyout.

 

Tim Wright

The hotel is located at 7341 Canyon Centre Pkwy., just 20 minutes from Downtown Salt Lake City. 

Its convenient location at the base of the Wasatch Mountains offers unparalleled connectivity to the area’s high concentration of corporate and leisure demand generators, including world-class ski resorts.

 

Courtyard Salt Lake City Cottonwood features premium amenities including a state-of-the-art fitness center, outdoor heated pool with spa, meeting and event space, onsite dining, rooftop terrace and business center.

 The property opened its doors in 2021 and quickly ramped up despite the challenges the hospitality industry faced during the Covid-19 pandemic.  

 

The JLL Capital Markets Debt Advisory team was led by Senior Managing Director Tim Wright, Director Olga Walsh and Analyst Jack Wood.

Jack Wood

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. 

The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. 

The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

 

For more news, videos and research resources, please visit JLL’s newsroom.

 

 

CONTACT: 

 

Alli Stent

PR, Hotels & Hospitality, 

Capital Markets

Chicago | JLL
M +1 330 329 6750

Commercial property owners shifting to operations, notes RECI

John Oharenko

 Chicago, IL – Chicago-based Real Estate Capital Institute (RECI) reports that as the prospect of a slower yet reasonably healthy economy emerges.  And the Fed announced that rate drops are likely for this year.  Commercial property owners have shifted more attention to operations for much of this year. 

 The Real Estate Capital Institute's® Director, John Oharenko, predicts, "It's always prudent to be cautious, as CRE investors attempt to understand the economic direction of 2024.  The overall fundamentals of the nation's commercial real estate economy are generally healthy, so the risks are prudent and manageable."

Since most investors took advantage of locking into lower interest rates, often below 4%, their focus remains on improving cash flow performance vs. capital markets.  Yet, transaction volume will selectively increase based on the following market conditions:

 

Economic Uncertainty:  Risk and reward spans every era of investing.  This year, investors will focus on the upcoming elections, inflation, international instability, unregulated immigration, energy prices, labor shortages, etc.  On a local and regional level, property owners face slackened demand and uneven rent growth, rising supplies (e.g., multifamily and industrial), increasing expenses (e.g., insurance and property taxes), and competitive obsolescence. 

 As for universal risks, for example, few investors believe that mortgages will reach last year's 8% high.  Many economists predict that the Fed will drop interest rates perhaps two to three times. 

 

 The Fed's two-percent annual inflation target seems to be within reach, as GDP growth simmered to about 2.5% in 2023.  However, international risks, including Moscow's invasion of Ukraine and the Middle East crisis, remain a wildcard – particularly for food and energy prices.

Local and regional risks for real estate investors pose some unique challenges.  Few owners expect property taxes or insurance costs to decrease.  Municipalities need funds as the federal government continues to cut spending. 

Depending on the region, climate change and other related weather incidents plague insurers.  Alternatively, rent growth should continue to aid certain sectors, namely multifamily, as affordable home ownership remains further out of reach for many Americans.

 

Asset Repricing:  Ample funds remain on the sidelines for properly priced realty projects.  As investors adjust to the four-percent ten-year treasury benchmark, forming the denominator for "safe" investing, the profit strategy focus shifts to an acceptable return on equity at this level. 

 

 In the case of CRE, steady cash flow, combined with rent growth and inflation protection, adds 200 to 500 basis points or more in risk-adjusted yield premiums.  Meaningful pricing discounts must occur to hit such yield targets compared to the peak pricing levels of early 2022. 

 

For instance, 10% -15 % for apartment and industrial properties, 15% -25 % for retail assets, and above 25% for office properties that suffer from declining demand in many areas of the country.

 

Motivated Parties:  Distraught investors tired of suffering unacceptable profit margins over longer timeframes comprise the bulk of motivated sellers.  Now, they're looking to unload such investments.  Projects typically held beyond two to five years or more beyond the projected holding period fall into this category, as market conditions were substantially different when these investments originated.  

 

Just as importantly, lenders carrying debt on challenged properties are running out of patience, not only from the profitability standpoint but also due to pressure from nervous bank regulators demanding to unload such loans or requiring higher loan loss reserves. 

In particular, local and regional banks carrying higher priced short-term floating rate debt that burdens project economic performance fall into this category.

 

The Real Estate Capital Institute® is a volunteer-based research organization that tracks realty rates data for debt and equity yields.

 

CONTACT: 

 

John Oharenko, Executive Director

director@reci.com / www.reci.com

 

^The   Real Estate Capital Institute^®

Chicago, Illinois USA 60622