Case Study

In addition to its close connections within the local brokerage community, The Management Company also maintains close relationships with local property owners invested in the multi-tenant industrial market.  In the case of 2000 – 2008 South Yale Street, a local Orange County owner/developer desired to exchange one of its fully depreciated, unleveraged assets to acquire a larger business park.  With this off-market acquisition opportunity,  the Management Company quickly placed the asset into escrow and acquired the project under favorable terms by providing the exchange seller with flexibility on the closing date. The Yale Street asset was purchased for $7.7 million in 2018 in a partnership with high net worth individuals, and is held without leverage while producing a current dividend in excess of 6.0%.  Using a projected disposition at end of 2021 after a holding period of 42 months, with capital invested to reposition the property of approximately $200,000 (2.6% of basis) and a capitalized disposition rate of 4.50%, the property would be valued at $10.98 million.  Although unrealized at this time, the projected total cash proceeds to ownership from dividends and sale proceeds would be $11.84 million, resulting in an unlevered 13.2% gross IRR and a 1.51 multiple on invested equity.