Real estate investment firms secure rare value-add multi-tenant industrial warehouse asset in supply-constrained Southern California San Gabriel Valley submarket
RanchHarbor, a real estate investment firm based in Newport Beach, Calif., and Manhattan West, a fully integrated real estate investment and management firm based in Los Angeles, announce their joint venture (JV) partnership in the acquisition of a five-acre multi-tenant industrial warehouse property in San Dimas, Calif. The value-add asset includes four individual buildings encompassing 91,000 total rentable square feet across 44 individual suites. The JV purchased the property 98% occupied, substantially below replacement cost and at an attractive basis through an off-market transaction from a private seller. Terms of the deal are not disclosed.
“The San Dimas investment represents a unique opportunity to purchase a multi-tenant industrial asset in a desirable and highly supply-constrained San Gabriel Valley submarket well below replacement cost,” said John Meek, managing principal at RanchHarbor. “With little to no new construction of small-bay industrial product in the submarket, this specific type of multi-tenant product is cost-prohibitive to build in many parts of the Los Angeles Basin due to the lack of available developable land, rapidly increasing land values and high construction costs. RanchHarbor is excited to have secured the asset with Manhattan West and we look forward to executing on another well-thought-out business plan with their team.”
The San Dimas property’s four concrete tilt-up structures feature 14-foot to 18-foot clear height and 44 ground-level doors. Unit sizes range from 1,232 square feet to 6,250 square feet. The property was originally built in 1979 and renovated in 2005 and has a 10‐year historical average occupancy of 95%. The JV’s business plan is to perform deferred maintenance and capital improvements to the property including “white boxing” to improve its marketability.
The asset is located in Greater Los Angeles in East San Gabriel Valley at 221-299 Allen Avenue and 906-924 Cataract Avenue. Positioned along the south side of the 210 freeway at the San Dimas Avenue exit, the property offers freeway identity and efficient connectivity to major transportation thoroughfares. It is less than a mile to the 57/210 freeway interchange and is accessible to the I-10, I-605 and I-15 freeways.
According to Costar, the East San Gabriel Valley industrial submarket’s vacancy is less than 1%, as of Q1 2022, and availabilities are more limited than in many other industrial locations in L.A. County. The direct availability rate is 1.5% compared to 2.6% at the metro level.
“San Dimas and the San Gabriel Valley are experiencing decreasing supply of small-bay industrial product due to up-zoning of industrial land and older industrial buildings being redeveloped for larger distribution assets,” said Adam Norvell, managing director of real estate at Manhattan West. “The area’s lack of new construction and long‐term redevelopment trends combined with strong demand for small‐bay space provides a favorable occupancy outlook for the San Dimas investment. Manhattan West is pleased to partner with RanchHarbor’s knowledgeable team again after the success of our previous L.A County value-add investment.”
The San Dimas investment is RanchHarbor and Manhattan West’s second JV partnership. The two firms recently completed the renovation and lease up of a 18,000-square-foot value-add industrial property in Signal Hill, Calif. The property is currently being marketed for sale.
The San Dimas transaction was facilitated by Lee & Associates with the JV represented by Jack Haley and the seller represented by Todd Launchbaugh and Justin Leewood.
This investment marks RanchHarbor’s ninth acquisition since the firm’s launch in 2020, and the first investment in RanchHarbor Fund I, a $25 million fund targeting value-add real estate investments. With more than $140 million in assets currently under management, RanchHarbor continues to pursue value-add general partner (GP) and limited partner (LP) real estate investment opportunities in select U.S. markets with targeted equity commitments between $3 million and $10 million. RanchHarbor recently expanded its reach to the eastern U.S. with the acquisition of RV Storage Depot, a 55-acre recreational vehicle and boat storage facility in Altamonte Springs, Fla.
Since 2019, Manhattan West has invested in four separate industrial assets, totaling over 145,000 square feet in Southern California. In addition, the firm has acquired over 150 multifamily units in Los Angeles and is in the process of entitling over 200 units for ground-up development. The firm is actively seeking value-add and opportunistic industrial and multifamily investment opportunities in major western U.S. markets, with a focus on Los Angeles.
RanchHarbor is an integrated real estate investment firm based in Newport Beach, Calif., focused on investing in sub-institutional value-add opportunities. RanchHarbor offers joint venture equity and general partner co-invest equity, targeting commercial and multifamily real estate investments between $2 million and $15 million in select U.S. markets. The firm also provides sophisticated asset management, capital advisory and receivership services to institutional and private investors, asset owners and operators. Since its founding in 2020, RanchHarbor has closed on nine investments exceeding $100 million in total AUM across five states. For more information, visit ranchharbor.com. Follow the company on LinkedIn.
ABOUT MANHATTAN WEST REAL ESTATE
The Manhattan West Real Estate Group is a community-focused real estate team uniquely positioned as an owner, operator and manager of multifamily and industrial properties and has sought to add value to the communities it operates in and positively impact the tenants and residents of its buildings. Since inception, the group has focused on targeting value-add and opportunistic assets.