VALUE-ADD REPOSITION OF OBSOLETE FLEX INDUSTRIAL

[Don Pearson]

Investment Info:

Industrial commercial investment investment in Carlsbad.

Purchase price: $3,250,000
Sale price: $4,600,000

Identified, built, and marketed “Creative” flex-office improvements to attract progressive flex-office/industrial users from the Carlsbad and surrounding submarkets. Building and industrial suites were previously “black-listed” and deemed “too tired” and functionally obsolete by the brokerage and tenant community.

Through thoughtful and strategic sourcing, we were able to complete high-style “creative” flex- office design for nearly ½ the cost of competitive landlords.

What made you interested in investing in this type of deal?

-Coastal location.
-Acquired below replacement cost.
-Saw an opportunity to profitably reposition an old, tired asset.

How did you find this deal and how did you negotiate it?

Broker relationships

How did you finance this deal?

Combination CMBS debt and private equity

How did you add value to the deal?

See description above and pics below

What was the outcome?

-Significantly improved the building, neighborhood, and tenant profile.
-Created a backlog of demand for industrial/flex space where none existed prior.
-Sold as a part of a larger portfolio sale, at a significant profit and return to investors.